While much research has examined the effect of income on happiness, we suggest that how people spend their money may be at least as important as how much money they earn. Specifically, we hypothesized that spending money on other people may have a more positive impact on happiness than spending money on oneself. Providing converging evidence for this hypothesis, we found that spending more of one’s income on others predicted greater happiness both cross-sectionally (in a nationally representative survey study) and longitudinally (in a field study of windfall spending). Finally, participants who were randomly assigned to spend money on others experienced greater happiness than those assigned to spend money on themselves.
Spending Money on Others Promotes Happiness
by Elizabeth W. Dunn, Lara B. Aknin, Michael I. Norton
http://greatergood.berkeley.edu/images/application_uploads/norton-spendingmoney.pdf
Prosocial Bonuses Increase Employee Satisfaction and Team Performance
by Lalin Anik, Lara B. Aknin, Michael I. Norton, Elizabeth W. Dunn, Jordi Quoidbach
http://www.hbs.edu/faculty/Publication%20Files/13-095_4a7a4e90-eebf-4552-98df-57b11ed48c9e.pdf
In two field studies, we explore the impact of providing employees and teammates with prosocial bonuses, a novel type of bonus spent on others rather than on oneself. In Experiment 1, we show that prosocial bonuses in the form of donations to charity lead to happier and more satisfied employees at an Australian bank. In Experiment 2, we show that prosocial bonuses in the form of expenditures on teammates lead to better performance in both pharmaceutical sales teams in Belgium and sports teams in Canada. These results suggest that a minor adjustment to employee bonuses – shifting the focus from the self to others – can produce measurable benefits for employees and organizations.