Ariely: Cash compensation settles past obligations while gifts build future relationships
Dan Ariely · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · Apr 1, 2019 · at 31:51
Behavioral economist Dan Ariely explains why non-monetary rewards foster stronger long-term employee goodwill than transactional cash bonuses.
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“If I pay you, What is the time horizon of payment? The time horizon usually you've done something for me and I'm paying you back. The books are closed, right? It's backward looking. It's not, I'm paying you and now you owe me. It's like you did something, I'm paying you back. It's a, it's short time and it's backward looking. A favor is very different, right? It's open ended and it's future looking.”
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