Rational or Irrational?

There was study I came across online once (that I sadly can't locate now), that had an interesting result. And while I can't provide a link to it, I can explain the gist of it:

Essentially, the study tracked people's willingness to do work in various situations. They started by figuring out how many of their subjects would be willing to volunteer for a few hours (at a soup kitchen or something), with no form of compensation. Pure community service. They then offered to compensate these workers with a small amount of money (say, $2 total).

Perhaps surprisingly, fewer people wanted to work under these conditions. More people were willing to work for free than for $2. Now, the question is: is this rational?

From a purely economic standpoint, the answer is clearly no. The more that you are offered for your work, the more you should want to do it (at least, to a certain extent - if you're making $1000/hour, you'll probably be fine working only a handful of hours/week). So in that regard, this is highly irrational behavior.

I disagree though. I think this is perfectly rational behavior, and it's exactly how I would've reacted too. I think that psychologically, there is a difference between volunteer work and paid work.

When I agree to volunteer to do something, I'm doing so with no expectation of compensation. I have agreed to 'give away' my hours of labor for whatever personal satisfaction I get from volunteering. But as soon as you go to put a price on it, my mindset changes. You're now hiring me, and I don't work for $2/hour.

And the thing is, it's kind of insulting. I know the money is a kind of 'reward' or a 'token of thanks', but you're still putting a value on it. And in this case, the value is too low.

I'm sure you can get into the social/psychological aspect of this much more, but I find the results interesting, because it sheds light on the idea of using gifts to show your gratitude. And in particular, it shows that if you go about it the wrong way, you can breed resentment.

Case in point: UCLA's Office of Residential Life. At the end of the year, all members get a small gift as a 'token of gratitude' for all the hard work they've put in (and it's a LOT of work). But the problem is, this item is usually something fairly worthless - a padfolio, a ceramic 'bank' that looks like a Lego, a poor-quality tool kit, etc.

And what that says to the employees is, "we value your hard work and your many contributions at a level equal to the value of this [item]". And with something so worthless, it breeds a feeling of unappreciation - the exact OPPOSITE of the intent.

Anyways, I think it's interesting, and has an important real-world consequence that people should be aware of. What do you think though... is this a rational way of looking at things?