Nov 6 2013
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Money for Nothing

Peter Ubel, MD, is a physician and behavioral scientist. He is the Madge and Dennis T. McLawhorn University Professor of Business, Public Policy and Medicine at Duke University, an alumnus of the Robert Wood Johnson Foundation (RWJF) Generalist Physician Faculty Scholar program, and recipient of an RWJF Investigator Award in Health Policy Research.

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During a break between classes, I offered some MBA students the chance to make a little extra money. Some would have a job of sitting in the classroom for five minutes doing nothing, absolutely nothing – no reading, no listening to music; just staring straight ahead. For this effortless job, they would receive $2.50.

Others would have the job of sitting in the same room for those same five minutes, but rather than staring into space they would be asked to solve word puzzles, forming four-word sentences out of five-word combinations. For example, the words “eagle apple majestic soars” could be turned into the sentence: the majestic eagle soars.

The question for the students was: how much would they need to be paid to unscramble sentences for them to prefer that job over the easier one. As it turns out, the answer to that question depends on whether, when people make the choice, they are focused on effort or enjoyment.

When people think about how much effort a prospective job requires, they may overlook how much enjoyment they will get out of doing the work.

I conducted this and several related studies with my colleague, David Comerford, a behavioral economist at Stirling University in Scotland. In this particular study, we discovered that when we asked MBA students which job they would enjoy more, 45 percent picked the sentence unscrambling job, while less than 15 percent chose the easier job of staring off into space. Indeed, when we measured people’s happiness performing the two jobs, we discovered that the ones unscrambling the sentences were enjoying themselves more than the others. By this logic, since the sentence unscrambling job is more fun, all else equal, students should choose it over the easier job.

And yet, when we asked students how much we would have to pay for them to choose the sentence unscrambling job over the easier one, the majority said they would need to be paid more than $2.50. Think about that: the job is clearly a better way of spending those five minutes of time, but they still wanted more money to do it. What’s going on here?

When focused on wages, the students used a simple rule of thumb – that more effort deserves more pay. This rule of thumb can lead people astray.

The problem with this rule of thumb, of course, is that our job decisions are not just about effort and wages. We think of many other things when deciding what job to work at, such as how much we would enjoy the job, how much social value the work entails, whether the job gives us opportunities for advancement, etc. When we get stuck thinking too simplistically, that more work deserves more pay, we might end up in the wrong job. In the case of the students, using this rule of thumb caused some of them to spend five minutes bored while their colleagues, those willing to unscramble sentences for $2.50 or less, enjoyed themselves more.

When people have the good fortune to choose between more than one job, it’s seductively simple to compare how much each job pays. After all, wages are very easy to judge. A job that pays $50,000, all else equal, is better than one that pays $45,000, for instance. However, all things are rarely equal. And by focusing too much on wages, people might pay too little attention to other aspects of the job, such as how much they will enjoy the work.

Our study takes this lesson a step further. In this example, our MBA students already recognized that the sentence unscrambling job was more enjoyable than the other one. The problem was when we asked them to focus on wages they seemed to forget about enjoyment, and focused too much on effort.

People need to be careful not to focus too narrowly on the belief that greater effort must necessarily be rewarded with higher wages. Sometimes it’s the work that matters!

Tags: Generalist Physician Faculty Scholars, Human Capital, Investigator Awards in Health Policy Research, Job satisfaction, Research, Voices from the Field