‘Time is money’ goes the adage. But do you think of time as having a monetary value? According to Sanford DeVoe and Jeffrey Pfeffer at Stanford University in America, your answer could well depend on whether you are paid by the hour.
If someone sees their time as having a financial worth, then it follows that any time they don’t spend earning money is essentially lost revenue. DeVoe and Pfeffer found that of over 10,000 employees, those who were paid by the hour were significantly more likely to say that, given the choice, they would choose to work more hours for more money, rather than fewer hours for less money.
This held true even after controlling for a raft of factors like current weekly income and number of hours worked.
In a second study, 62 employees on an annual salary reported how much of their working life they had spent being paid hourly. As expected, those who’d spent more of their lives paid hourly were more likely to display a financial view of time, saying they’d rather work more hours for more money.
Some of these 62 employees were also asked to translate their annual salary into an hourly rate. Doing this led employees who’d spent little, or none, of their life on an hourly salary, to view time as if they had previously worked on an hourly rate – again, being more likely to say they’d rather work longer hours for more money, than fewer hours for less.
The findings have implications for how we are paid and for the modern drive towards flexible working arrangements. You might think that the option of an hourly rate and flexible hours would free you up to spend more time on what really matters to you in life. But these results suggest such an arrangement would lead you to view time as money, making it hard to resist working longer hours.
DeVoe, S. & Pfeffer, J. (2007). When time is money: The effect of hourly payment on the evaluation of time. Organisational Behaviour and Human Decision Processes, 104, 1-13.