Performance-based Reward: How You Get Paid Shapes How You Value Money

Can how you get paid decide how much you value money? Our study examines the effect of reward systems on subjective valuation of the reward. Specifically, we suggest that even when people receive a same reward from a same task, how they receive it can bias their valuation of the reward. Results from two experiments and one field study indicate that performance-based systems lead to greater valuation of money than do task-based systems. Furthermore, the effect of performance-based systems on the value of the reward is mediated by the increased saliency of a reward- seeking goal; performance-based systems activate a reward-seeking goal, which in turn increases subjective value of the reward.