Earn What You Want: Understanding the Behavioral and Motivational Effects of Self-Set Pay Before Versus After Task Completion

Self-set pay is not hypothetical: it already exists across firms, though design guidance is scarce. In two pre-registered, mixed-methods experiments (N = 449), participants completed a real-effort task and set their own pay before or after working. Despite full discretion, no one exploited it: one in seven requested less, and requests were uncorrelated with output. Self-set pay raised self-reported effort relative to fixed pay and activated a reciprocal obligation: after-task deciders justified requests by completed work, before-task deciders by prospective value-claiming. Exploratory analyses found women requested more than men, reversing the usual gender gap. Implications for compensation design are discussed.