Pay Enough or Don't Pay at All

http://behind-the-enemy-lines.blogspot.com/2011/05/pay-enough-or-dont-pay-at-all.html

by Panos • 15 years ago

129 20 15 years ago

behind-the-enemy-lines.blogspot.com

I'm surprised this doesn't mention blood donation as pay-for-blood schemes have been shown to reduce donations. This is the primary reason I'm aware of this effect.

vishaldpatel• 15 years ago

Something to keep in mind: Not paying works best when everyone thinks that everyone else is a volunteer.

corin_2• 15 years ago

Another side to think about is how people want others to see them. I happily donate blood (in the UK, where there aren't options to get paid for doing this), but if they started paying a small amount, I would feel that, by going in, people would see me and think "he's so desperate for money that he's donating blood to earn some".

Same thing, say, volunteering in a charity shop (which I haven't done for a few years, not for reasons related to this). If I were to be offered pay, it would be too little for me to care about getting, and again I would, sadly, care that people would see me as the person whose job is in a charity shop, rather than the person who is volunteering his time for a good cause.

It's a pretty petty way to think, and I don't always let the "but people will think..." win my internal argument. but it's usually there, and fairly often does sway my decision. (For the record, I don't care that people see me in a positive light, I'd be just as happy donating blood in such a way that no-one ever noticed me doing it, the bit I care about is when I feel I might be seen in a way that I don't like. Still pretty egotistical, but not quite as bad as wanting to show off, I think/hope.)

smallblacksun• 15 years ago

Lawyers are the same way. They either charge normal rates or work pro-bono. They almost never work for a reduced rate.

code_duck• 15 years ago

Making any product available for a reduced rate reduces it's perceived value in the market... particularly something personally branded like law services or art.

ajkessler• 15 years ago

Every firm I've worked for charges a variety of rates; they are absolutely negotiable. Charging less than your stated rate, particularly when you outline why you're charging that amount (as a favor, for a limited number of hours, for this case, etc.), isn't going to reduce your perceived value.

Panos• 15 years ago

Spot on. It is actually one of the explanations in the Gneezy and Rustichini paper: "consider the practice of paying back a small amount for recycling a soft drink bottle, which is common in many European countries. Anecdotal evidence suggests that people are less willing to recycle when this small compensation is offered, than they are in places where no money is offered, and failure to recycle is simply considered bad behavior. It is unlikely that the amount offered is considered insulting. A different explanation in this case might be that people are afraid of looking ‘‘cheap’’ for making the effort of recycling to collect the small amount."

corin_2• 15 years ago

Interestingly, in my travels I can only recall coming across that system once, it was at a hotel in Germany and I was quite young, somethiong like 12-15 years old.

Now days I recycle at home purely for the environment, but I don't think I cared much back then - whereas, with a vending machine that paid out when you returned a glass bottle, young me was very pleased to be able to do that, to help pay for the next bottle.

gyom• 15 years ago

I learned that lesson at Halloween a long time ago. My mother helped my friend and I sew our costumes (she basically did all the work).

When my friend offered to give her some money for her help, she just replied that he wouldn't have enough money to pay her.

At that moment, I achieved enlightenment.

Yxven2• 15 years ago

I have been working on a subscription based website that would pay 70% of its revenue to its contributors. I'm sure the payout will be insignificant for minor contributions. Is being subscription based savable? (I don't think banner ads will pay enough to be worthwhile)

jbri• 15 years ago

Suggestion: Allow contributors to automatically donate their earnings to a charity. Much easier for minor contributors than collecting their individual payout and donating it themselves, probably more efficient for the charity as well (since you can pool it from everyone into a single donation), and brings back some of the "doing it for a good cause instead of for money" thing.

Yxven2• 15 years ago

I think that's a good idea. Thank you.

ikono• 15 years ago

In one of my favorite TED Talks, Barry Schwartz talks about this among other things.

In it he tells a story about a study in Switzerland where a community was asked whether or not they would agree to a nuclear waste facility in their area. Amazingly 50% agreed, they then repeated the procedure but offered 6 weeks salary as well. This time only 25% agreed. He claims that as soon as the incentive is introduced people throw out their perceived responsibilities and instead focus on what is best for them. So instead of asking themselves whether or not they should, they ask themselves "is this a good deal for me".

shrikant• 15 years ago

Maybe they tell themselves, "If they have to offer money for something they're doing, maybe it isn't such a great thing thing after all."?

Especially if you're asking the same people, of which 50% agreed initially.

cdesmar• 15 years ago

You are skipping an important step: prizes.

Free->prizes->paid.

Also things like free food, better internet, lab space are all great motivators. The message there is I can't afford to pay you what you're worth but I'll do what I can.

WinPhone7 has a great community in London and I know a lot of people who are starting to express interest because MS is giving out xboxes and free phones and buying beer.

$7/hr could have bought a lot of xboxes.

lionhearted• 15 years ago

Starbucks cards are a way to hack this.

If you've got a limited budget and someone is putting in 5 hours of time for you and you give them $20, they might be unhappy as mentioned in the article.

$20 Starbucks card? Sweet. Keeps it a social norm thing, even though it's almost a cash equivalent.

JoachimSchipper• 15 years ago

From http://www.mashmarketing.co.uk/blog/2010/02/12/friday-inspir..., via an old HN post(?):

"Get creative with compensation–use the iPhone Payment Plan. Imagine you’re a highly-trained software engineer. A crazy guy with a “startup” (i.e. me) approaches you about doing some work. Scenario #1: Dude, I’ll pay you $2,000 for 150 hours of work…3-4 months from now. Scenario #2: Dude, promise to build this and I’ll give you an iPhone right now [and] pay your phone bill. [...] We tried both approaches [...] and [...] Scenario #2 [...] actually worked out a lot better. There’s something about the psychology of receiving a cool gadget that doesn’t quite equal out to the cash equivalent. Also, paying up for the iPhone upfront fosters trust, which in turn boosts productivity."

chopsueyar• 15 years ago

Plus, not having to directly deal with Verizon or AT&T is an added benefit.

diiq• 15 years ago

It's probably important to remember that money is not the only way to pay people --- I work at a job with low pay, but completely flexible hours, and for me, that benefit is worth twice the salary.

premchai21• 15 years ago

Obligatory story from the Old New Thing: http://blogs.msdn.com/b/oldnewthing/archive/2006/12/01/11847...

Pay Enough or Don't Pay at All

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