Cash Bonus or More Vacation Time: Which Do You Choose

When it comes to rewarding workers financially, cash isn’t always king.

Companies frequently give employees monetary bonuses, but a new study suggests that paid vacation time is a perk employers should also consider.

The study’s authors say that while they didn’t explicitly look into whether employees prefer time off, the study found that receiving extra vacation time rather than bonus money makes workers feel less like a mere cog in a wheel and more like people who are recognised and valued as individuals with a life beyond work.

It makes them feel more human, in the researchers’ terms.

And that feeling benefits employers as well as employees, says Sanford DeVoe, a professor at the Anderson School of Management at the University of California, Los Angeles, and one of the study’s authors.

Feeling more human is strongly correlated with higher job satisfaction, greater engagement with work, better relationships with colleagues and less inclination to leave a job, he says.

Feeling seen

In one experiment, the researchers asked about 1,500 participants to recall times when they received a monetary bonus or paid time off—all had received both—and how that made them feel.

Participants responded to the question on a 7-point scale, from feeling more like a robot on the low end of the scale to feeling more human on the high end. Monetary bonuses were given an average score of 5.04, compared with 5.4 for paid vacation time.

“While that difference may sound modest numerically, it represents a meaningful psychological shift,” says DeVoe. “It’s the difference between feeling neutral and feeling genuinely seen as a person.”

The authors then sought to better understand why paid vacation time made employees feel more human. In another experiment, about 500 participants were asked to imagine starting a new job where they might be awarded a bonus. Some were told the bonus would be an extra week of vacation, others were told it would be an extra week of pay.

Participants were then asked about their expectations for being able to keep their work and home lives separate in the new job. Those who could hope for a bonus of extra time off expected more separation between their work and personal lives than those whose potential bonus would be extra pay.

They also reported feeling more human on the 7-point scale. This suggested to the researchers that time off makes people feel more human because it creates a clearer psychological distance from work than a monetary bonus.

No interruptions, please

In a third experiment, the researchers further tested the idea that clear boundaries between work and personal lives were driving their results.

Two hundred participants were told to imagine being on a vacation and receiving two texts, including one from their mother. Half were told the second text was from a friend and half were told the second text was from their boss.

The authors then measured how human participants felt after each scenario. The average score for those receiving a text from a friend was 5.4 on the 7-point scale, compared with 4.16 for those receiving a text from the boss.

The difference in the scores “demonstrates that even minimal work intrusions can undo the psychological benefits of time off,” says DeVoe. “It shows that it’s not just time away that matters—it’s whether work actually lets go.”

All of this is important for employers looking to get the most out of their workers, he says. “For managers concerned with sustainable productivity, giving people uninterrupted time away from work can be a powerful lever.”

What’s more important than being a good employee right now? Looking like a good employee in the eyes of AI productivity trackers that more managers are using to evaluate their teams.

Employee-monitoring systems are especially popular at tech companies and are also used by other white-collar firms that want to probe how people spend company time. The scary thing: You might not even know you’re being watched because many states don’t require disclosure.

Metrics can include performance data that is undoubtedly relevant, such as sales results. But it also can employ dubious proxies like keyboard strokes and how often your computer screen goes into sleep mode.

We generally accepted, or at least understood, heightened surveillance during the work-from-home era. Back then it seemed reasonable for bosses to keep tabs on employees they couldn’t see.

Yet the oversight has only escalated, and tensions are rising, too.

A group of former Meta Platforms employees alleges in a lawsuit that the company used a “constellation of internal artificial-intelligence systems” when it began laying off about 10% of its workforce in May. Meta says humans make termination calls.

However that case shakes out, a couple of things are clear. Companies eager to gauge which employees are locked in now have sophisticated AI monitoring systems at their disposal. And they believe they have leverage in a tepid labor market.

So while we may chafe at having our worth reduced to numbers on the boss’s productivity dashboard, we have to play the game as it’s being played. Here are some tips, based on conversations with people who make employee monitoring systems—and others who game the systems.

Be meticulous about your calendar

Calendar integration is one way that productivity trackers have gotten more advanced and, ostensibly, fairer.

Let’s say you make an old-fashioned phone call or attend an in-person meeting. Your Outlook or Slack status may switch to “away,” making you appear as inactive as if you were taking an extended coffee break.

Employee monitors like one made by a company called Insightful cross-check your online status with your calendar to see whether there is a valid reason for your apparent inactivity. If that call or meeting is on your schedule, then the system will recognize that you are busy offline. If nothing is on the books, it could look like you’re slacking off.

Hit the activity sweet spot, around 80%

Let’s not go any further without addressing the underlying question: How much downtime is permissible during the workday? After all, people have been scared to let managers see anything non-work-related on their screens since personal computers first arrived in offices.

No one knows this better than Roger Wagner, who is widely credited with creating the first “boss button” in the early 1980s. He designed a keyboard shortcut to instantly display a spreadsheet if the boss walked by your cubicle while you were playing a computer game. Boss buttons have been features of countless diversions since. (I confess to using one built into a March Madness streaming app.)

Wagner, the founder of computer-education company 1010 Technologies, says his original design was a joke—more of a commentary on overbearing managers than a cover for lazy employees. Good bosses understand workers need mental breaks throughout the day, he says.

This matches what I heard from Insightful Chief Executive Ivan Petrovic. He says customers that use his company’s workforce-management platform don’t expect employees to stay on task 100% of the time.

“On average companies are aiming for 60% to 80% of your time being utilized for work during the day,” he says.

Go ahead and exhale. It’s probably OK to watch an occasional YouTube video at your desk.

And if you’re going to artificially inflate your activity level, be careful. Hitting 90% could look suspicious.

Get physical

So don’t leave your mouse jiggler on all day. Choose the right one if you must resort to shenanigans.

There are lots of software applications that mimic the movements of a computer mouse, so you can appear to be working while away from your desk. There are also devices that plug into computer ports and do the same thing.

Corporate cybersecurity systems increasingly block these apps and devices, and productivity trackers claim to be able to detect them. But some workers swear by mouse docks, like one made by Tech8 USA, that keep cursors moving. The company originally made mouse-moving software but now focuses on physical jigglers.

“People are drawn to mechanical solutions because they’re so simple and don’t require software,” says Tech8 Marketing Director Sam Matthews. “As monitoring technology becomes more sophisticated, that distinction has become even more relevant.”

Use AI, but not too much

Another popular metric for employee-monitoring systems is AI usage. Companies want to know who is embracing new tools, and it can be tempting to think more is better.

“There’s a performative aspect where employees overblow their usage of AI so that they appear relevant in the organization,” says Andrea Derler, principal researcher at Visier, which helps companies track and analyze employee work habits.

In a recent Visier survey of 1,000 U.S. workers, 48% admitted to exaggerating their AI usage.

This is already an outdated strategy. Using AI for everything used to score points for experimentation. Now it can seem wasteful because many companies are watching AI token spending more carefully.

Look, productivity theater has always been part of work. Most of us aren’t trying to cheat the system, but expectations are changing so quickly that we need to be savvy about what the latest employee trackers are looking for.

Sometimes it takes a little gamesmanship to get full credit for our contributions.

Cash Bonus or More Vacation Time: Which Do You Choose—and Why?

New research suggests that bonuses make employees feel more like a mere cog in a wheel.