Employee Engagement in the Context of "Pay-What-You-Want" Service Settings: The Case of Free Walking Tours

Eirini Xanthopoulou

Student thesis: Master thesis


Pay-What-You-Want (PWYW) pricing systems allow customers to decide how much a product or service is worth and determine the price they want to pay, above or equal to zero. Nowadays, PWYW applications have become particularly popular in service settings but academic studies have solely focused on examining the implications of adopting such pricing systems for managers and customers, overlooking the employee perspective in the encounter. This study investigates the case of free walking tours and contributes to the existing literature by providing an understanding of how and why the application of PWYW pricing systems in service settings affects the engagement of frontline employees. The results of ethnographic research and online surveys indicate that employee engagement in PWYW contexts is dependent on socio-cultural factors such as labour market characteristics and social norms. In that sense, a certain job might bring engagement in one culture but disengagement in another. Moreover, the study demonstrates a correlation between customer payments and employee engagement. Higher levels of payments (or the potential of such) lead to increased employee service productivity, job satisfaction and work engagement. On the other hand, employee morale is hurt in case of low or zero payments which, when combined with lack of perceived fairness of the PWYW system, lead to increased job insecurity, higher turnover intentions and decreased engagement.

EducationsMSocSc in Service Management, (Graduate Programme) Final Thesis
Publication date2020
Number of pages91