PARIS – As the end of the year approaches, it is difficult to escape the gift-giving madness.
Santa has the family covered, of course, but the office is a different matter. Here, a postman replaces the old man with the red coat. The person who sent the present is rarely from Lapland – most often he is supplier or a client. This practice is strictly supervised in order to avoid corruption.
In most companies, the rule is that the recipient of the gift has to send it back if it is worth more than 50 or 100 euros. Here at Les Echos, for instance, we have rules on gifts – yes, some journalists do get presents, often from generous communication services. The ethical charter of our newspaper stipulates: “Journalists must turn down any gifts that could be considered inappropriate, excessive or liable to jeopardize their objectivity.”
Excellent principle. Except that economists have shown that even small gifts aren’t as harmless as they might seem. Ulrike Malmendier from UCLA and Klaus Schmidt from Munich University carried out an enlightening experiment. They assigned different roles to the students, and told them that financial compensation would be contingent on their decisions. Someone played the buyer, someone else played the expert responsible for the buyer’s purchasing decisions and two others played salesmen, one of whom was granted the possibility to give a small present to the expert.
The experiment was repeated many times, and the result was quite surprising. If the two salesmen had a product of equal quality but no gifts, their products would have the same chance of being chosen by the buyer. However, when a salesman gave the buyer a present, his chances of being chosen doubled.
“The gift seems to create a special bond between the giver and the receiver,” say Malmendier and Schmidt, confirming previous studies from sociologists and anthropologists –who observed this phenomenon in many other situations, like for instance the Chinook Indian tribe and their famous potlatch (a gift-giving festival).
Even more surprising: bigger gifts have less impact than the smaller ones. With a gift three times bigger, “the decision-maker will only favor the salesman 50% of the time, instead of 68% beforehand.” It is as if the person receiving the gift was rebelling against a perceived corruption attempt. This is a perfect embodiment of the French proverb: “Small gifts maintain the friendship but big ones spoil it.”
Other studies showed that the person receiving the gift found it hard to evaluate how he or she is affected by the gesture. A U.S. survey found that only 39% of medical interns admitted that their prescriptions were influenced by the pharmaceutical companies that gave them gifts, but 84% said their colleagues’ prescriptions were affected.
Best incentive: a bonus or a gift?
Employers can also give useful gifts. Three researchers: Sebastian Kube from the Max Planck institute, Michel André Maréchal and Clemens Puppe from Karlsruhe University, observed three groups of students who were paid to catalogue books in a university library. This was temporary job – meaning it was easy to judge the employees’ efficiency. The first group was paid the salary that was advertised. The second group was told after a few hours’ work that they would be granted a 20% bonus. The last group was given a thermos bottle presented in wrapping paper, equivalent to the 20% bonus. The second group did a slightly better job than the first one – the employees said the bonus made them work harder. On the other hand, the third group worked… 25% faster. The thermos ended up being the most profitable choice despite the fact that 90% of the students, when questioned afterwards, said they would prefer getting a bonus instead of a gift.
Obviously, it doesn’t mean every employer would profit more from the distribution of thermos bottles to their employees. A professional career stretching over months or years is far more complex that a student’s part-time job.
However, there is a conclusion that can be drawn from these studies: presents in the workplace have a behavioral impact overruling their original economic purpose. The symbolic, human, social aspect of the gesture plays an important part. One thing to take from this is that kindness in the workplace has its benefits, something that can be reassuring during economic uncertainty. Another thing is that we should be as wary of the smaller gifts than as the bigger ones.
Les Echos' Society of Journalists, be advised: we might need to add a few modifications to our charter, although I want to be clear: last year’s magnum bottle of champagne from that communication agency had no effect whatsoever on my attitude toward them.