Impact of activating the concept money: A fine is a price

Let me start with the summary of the experiment by Vohs, Mead and Goode (2006) to illustrate the impact of activating the concept money.

Day care centers operate between 7:30am and 4:00pm. When a parent doesn't arrive on time to collect a kid, one of the teachers has to wait until the pick up.

Day care center decided to impose a fine on parents that arrived late. As a result, a steady increase in the number of parents coming late was observed - almost double after a month (sic!). When the fine was removed, number of parents coming late remained at the same high level.

Why was there an increase in the behavior being punished?

The introduction of the fine changed the perception of people regarding the environment in which they operate. Before introducing the fine parents may have interpreted the action of the teacher in the first period as a generous, non-market activity. They thought "I should not take advantage of it".

With the fine, a new perception has been introduced: "I can buy this service". There was no guilt or shame for parents to be late.

It needs to be underlined that even after the fine was removed, the mindset, perception didn't change. Social relationships are not easy to reestablish. As Vohs, Mead and Goode (2006) argue "once a commodity, always a commodity". As a result, long term negative effect was observed. 

The psychological consequences of money

Vohs, Mead and Goode (2009) argue that "money makes people feel self-sufficient and behave accordingly" 

In their paper the they describe 9 experiments to showcase the impact of activating the concept money.

For the experiment the used screen savers with sentences including words such as salary (vs. neutral words), or screen savers showing money (vs. fish or no screensaver).

They observed that reminders of money led to reduced requests for help and reduced helpfulness towards others. Participants reminded of money preferred to play alone, work alone, and be more distant. Activating the idea of abundance of money made people work significantly longer before asking for help (relatively to restricted amount of money). 

When the experimenter asked for help, participants reminded of money volunteered to help for 25 minutes on average, vs. 42.5 in the control group. Participants reminded of money spent ½ as much time helping a confused associate. They also donated less money to the student fund.

Activating the concept of money

Merely activating the concept of money changes personal and interpersonal behavior.

"After people are reminded of money, they show improved memory of exchange-related information, prefer exchange-based relationships, and follow equity rules".

Managerial implications

Money has been said to change people’s motivation (mainly for the better) and their behavior toward others (mainly for the worse). The results of experiments suggest that money brings about a self-sufficient orientation in which people prefer to work alone and don't ask for help.

So, dear Managers if you want your teams to work better together, stop bringing up the concept of money every time in your motivational speeches. 

Source: Vohs, Kathleen D., Nicole L. Mead, and Miranda R. Goode. "Merely activating the concept of money changes personal and interpersonal behavior." Current Directions in Psychological Science 17.3 (2008): 208-212.Vohs, Kathleen D., Nicole L. Mead, and Miranda R. Goode. "The psychological consequences of money." science 314.5802 (2006): 1154-1156.