What would you rather have: Time or money? To Ashley Whillans, Assistant Professor, Negotiations, Organizations and Markets at the Harvard Business School, the answer says a lot about what will motivate you, as well as your long-range potential for happiness. It’s a simple question, she says, that should be added to every employee or customer engagement survey, because the answer is critical to understanding, in general, how to engage anyone in business or life.
Whillans, who has just completed her doctoral dissertation, “Exchanging Cents for Seconds: The Happiness Benefits of Choosing Time Over Money,” for a Doctorate in Social Psychology from the University of British Columbia, says her research focuses on “understanding how people invest their time and money to promote health, well-being and happiness.” The choice between time and money, she asserts, helps predict how people will spend money to maximize their own sense of well-being (or those around them) and is an overlooked area of research.
Whillans, who is currently co-authoring a study tentatively titled, “The Non-Financial Benefits of Incentive, Rewards & Recognition,” for the Incentive Research Foundation, explains the focus of her research and implications: “I am interested in how people spend time and money to maximize happiness and how they make decisions related to having more money and less free time, or more free time and less money.” As part of her dissertation, Whillans conducted 16 studies involving tens of thousands of people representing almost all demographic groups, she says. Her main takeaways are that “people who have a general orientation in their lives [of] focusing on time over money generally experience greater happiness, greater social connections and greater meaning in life.”
A Guide to Gauging Priorities
Why is understanding choices that involve time versus money relevant to businesses? “Knowing what your customers, employees and other business communities value can help determine the best ways to engage them,” Whillans explains. “Generally, half of people say they want more time and half say they want more money. As you would expect, older people generally say they want more time, and young people would rather have more money. Knowing whether people value time or money will help determine how they respond to your organization’s offers to them in terms of incentives, recognition, rewards, promotions or, for employees, scheduling changes, career advancement or more.”
This question of time versus money, she believes, applies as much to customers as it does to employees. “In terms of loyalty rewards, it is knowing what your customers value and how to communicate to them, to identify what kind of communication is most motivating to encourage customer engagement. Knowing what your customer values can make a big difference.”
The second part of Whillans' dissertation finds that, “People who use money to buy time by delegating tasks to others such as housekeeping or other services show greater happiness. Time savings are most effective for lower-income people, who in many cases are even more pressed for time and money.”
Whillans believes that saving time is a powerful motivator for most people that marketers can use to their advantage. As an example, she cites a medical practice seeking to encourage patients to use the online booking service. It wasn't until the practice began stressing the office time patients would save that usage of the service went up. “Reminding people that they can save time through a service can promote engagement,” she explains.
The choices people make between time and money are also predictive of motivators in the workplace, says Whillans. “The time and money question predicts when people will seek to get a promotion or change of job or schedule. Maybe they are facing time issues, or maybe they have more time and need money. Organizations can benefit by having frank conversations around these questions.” Recruiters can also benefit by understanding where candidates lie in the money versus time spectrum in terms of determining who will fit best with the required work schedule.
“The answer to the time-money question helps explain whether employees use or forgo vacation days," says Whillans. "We know burnout is a massive problem. How do we get employees to take their vacations? I haven’t done research related to burnout, but there is good evidence that it reduces productivity. Forcing mandatory breaks improves productivity.” The appearance of what Whillans calls "busyness" is a status symbol in our culture. "It’s important for organizations and managers to help encourage people to take time off or to otherwise enjoy time by offering rewards that involve vacations, time with the family, meals with clients or other rewards more conducive to health, happiness and wellness. Of course, people say they want cash as rewards because it has a clear monetary value to them. But it's not necessarily good for them or the organization, because in most cases it will be absorbed into the daily budget and quickly forgotten.”
People Often Make Less Than Optimal Choices
This leads Whillans to one of her more eye-opening conclusions: “Our research suggests that people do not always make optimal decisions about time and money. When, in our experiments, we asked people how they would spend $40, only 2% said they would spend it on something that saved time, even though our research found that most people felt more satisfied when they had more time.”
Many typical rewards programs would not pass muster with Whillans’ research conclusions. “Rewards should be strategic, based on scientific insight," she says. "We should limit or restrict choice because people will make suboptimal choices. If you want your program to have a lasting impact, you need to restrict choice. If you provide too much choice, and people make a bad choice, your effort won’t have the same impact.” Organizations, she explains, will see the best outcomes if they are strategic about limited choices based on fostering happiness, well-being and creating a communit, while at the time keeping a focus on supporting organizational values and goals.
“What really intrigues me about non-cash rewards," says Whillans, "is that they can become an important component of an organization’s efforts to retain customers, employees and other valuable people by becoming part of their well-being, health, happiness and community.”
She says engagement is becoming a hot topic in the academic world: “I do think that more of the soft issues related to happiness and how people feel has been neglected in organizational psychology, but no more. There is growing interest in questions such as: How can we promote customer and employee engagement, well-being? How can we create a workplace where people don't just do work but have social and meaningful experiences? The workplace can be about more than just making money. The role of social relationships, extracurricular activities, charitable activities, having a sense of purpose and meaning are increasingly being recognized as areas of study. The ability to measure this impact is a new frontier, and having more scientific guidance related to best practices is fundamental.”
Whillans believes that the focus of research needs to be on the effectiveness of implementation processes, noting that enough research exists to demonstrate the connection between engagement and organizational results.
Before starting her career in research, Whillans worked professionally as young actor, playing the role of the teenage character rival to Juno in the hit movie of the same name, among others, before working as a broadcast journalist, producer and staff writer covering arts, culture and investigative reporting. Today, and upon completion of her PhD, her focus is on teaching and research. “I am passionate about working on research that helps organizations implement practical solutions related to addressing the issues around time and money," she says, "in every context and organizational domain from government to business to our own personal lives.”
For more information, contact:
Negotiations, Organizations & Markets
Harvard Business School