Essential for all managers. Deep surprising study of motivation at work. Extrinsic vs intrinsic. Work vs play. When money is used as an external reward for some activity, the subjects lose intrinsic interest for the activity.
When money is used as an external reward for some activity, the subjects lose intrinsic interest for the activity.
Rewards can deliver a short-term boost - just as a jolt of caffeine can keep you cranking for a few more hours. But the effect wears off - and, worse, can reduce a person’s longer-term motivation to continue the project.
Human beings have an inherent tendency to seek out novelty and challenges, to extend and exercise their capacities, to explore, and to learn. But this third drive was more fragile than the other two; it needed the right environment to survive.
One who is interested in developing and enhancing intrinsic motivation in children, employees, students, etc., should not concentrate on external-control systems such as monetary rewards.
For too long, there’s been a mismatch between what science knows and what business does.
The Motivation 2.0 operating system has endured for a very long time. Indeed, it is so deeply embedded in our lives that most of us scarcely recognize that it exists. For as long as any of us can remember, we’ve configured our organizations and constructed our lives around its bedrock assumption: The way to improve performance, increase productivity, and encourage excellence is to reward the good and punish the bad.
People in the open-source movement haven’t taken vows of poverty. For many, participation in these projects can burnish their reputations and sharpen their skills, which can enhance their earning power.
Lakhani and Wolf uncovered a range of motives, but they found that enjoyment-based intrinsic motivation, namely how creative a person feels when working on the project, is the strongest and most pervasive driver.
The fun of mastering the challenge of a given software problem and the desire to give a gift to the programmer community.
In April 2008, Vermont became the first U.S. state to allow a new type of business called the “low-profit limited liability corporation.” Dubbed an L3C, this entity is a corporation - but not as we typically think of it. L3C operate like a for-profit business generating at least modest profits, but its primary aim is to offer significant social benefits. Three other U.S. states have followed Vermont’s lead.
Muhammad Yunus has begun creating what he calls “social businesses.” These are companies that raise capital, develop products, and sell them in an open market but do so in the service of a larger social mission - or as he puts it, “with the profit-maximization principle replaced by the social-benefit principle.”
“For benefit” organizations, B corporations, and low-profit limited-liability corporations all recast the goals of the traditional business enterprise.
Economics isn’t the study of money. It is the study of behavior. In the course of a day, each of us was constantly figuring the cost and benefits of our actions and then deciding how to act. Economists studied what people did, rather than what we said.
Bruno Frey, an economist at the University of Zurich.
An algorithmic task is one in which you follow a set of established instructions down a single pathway to one conclusion. That is, there’s an algorithm for solving it. A heuristic task is the opposite. Precisely because no algorithm exists for it, you have to experiment with possibilities and devise a novel solution.
Routine work can be outsourced or automated; artistic, empathic, nonroutine work generally cannot.
People are much more likely to report having “optimal experiences” on the job than during leisure.
Vocation Vacations. This is a business in which people pay their hard-earned money to work at another job. They use their vacation time to test-drive being a chef, running a bike shop, or operating an animal shelter.
America alone now has more than 18 million of what the U.S. Census Bureau calls “non-employer businesses” - businesses without any paid employees.
In the United States, 33.7 million people telecommute at least one day a month, and 14.7 million do so every day.
He tells prospective employees: “If you need me to motivate you, I probably don’t want to hire you.”
People have to earn a living. Salary, contract payments, some benefits, a few perks are what I call “baseline rewards.” If someone’s baseline rewards aren’t adequate or equitable, her focus will be on the unfairness of her situation and the anxiety of her circumstance. You’ll get neither the predictability of extrinsic motivation nor the weirdness of intrinsic motivation. You’ll get very little motivation at all. But once we’re past that threshold, carrots and sticks can achieve precisely the opposite of their intended aims. Mechanisms designed to increase motivation can dampen it. Tactics aimed at boosting creativity can reduce it. Programs to promote good deeds can make them disappear. Meanwhile, instead of restraining negative behavior, rewards and punishments can often set it loose - and give rise to cheating, addiction, and dangerously myopic thinking.
A key motivational principle: “Work consists of whatever a body is OBLIGED to do. Play consists of whatever a body is not obliged to do.”
There are wealthy gentlemen in England who drive four-horse passenger-coaches twenty or thirty miles on a daily line, in the summer, because the privilege costs them considerable money; but if they were offered wages for the service, that would turn it into work and then they would resign.
Only contingent rewards - if you do this, then you’ll get that - had the negative effect. Why? “If-then” rewards require people to forfeit some of their autonomy.
Rewards, by their very nature, narrow our focus. That’s helpful when there’s a clear path to a solution. They help us stare ahead and race faster.
The less evidence of extrinsic motivation during art school, the more success in professional art both several years after graduation and nearly twenty years later.
Painters and sculptors who were intrinsically motivated, those for whom the joy of discovery and the challenge of creation were their own rewards, were able to weather the tough times - and the lack of remuneration and recognition - that inevitably accompany artistic careers.
Those artists who pursued their painting and sculpture more for the pleasure of the activity itself than for extrinsic rewards have produced art that has been socially recognized as superior. It is those who are least motivated to pursue extrinsic rewards who eventually receive them.
Goals that people set for themselves and that are devoted to attaining mastery are usually healthy. But goals imposed by others - sales targets, quarterly returns, standardized test scores, and so on - can sometimes have dangerous side effects. Like all extrinsic motivators, goals narrow our focus. That’s one reason they can be effective; they concentrate the mind. But as we’ve seen, a narrowed focus exacts a cost. For complex or conceptual tasks, offering a reward can blinker the wide-ranging thinking necessary to come up with an innovative solution. Likewise, when an extrinsic goal is paramount - particularly a short-term, measurable one whose achievement delivers a big payoff - its presence can restrict our view of the broader dimensions of our behavior.
The problem with making an extrinsic reward the only destination that matters is that some people will choose the quickest route there, even if it means taking the low road.
By offering a reward, a principal signals to the agent that the task is undesirable.
In environments where extrinsic rewards are most salient, many people work only to the point that triggers the reward - and no further.
CARROTS AND STICKS: The Seven Deadly Flaws
1. They can extinguish intrinsic motivation.
2. They can diminish performance.
3. They can crush creativity.
4. They can crowd out good behavior.
5. They can encourage cheating, shortcuts, and unethical behavior.
6. They can become addictive.
7. They can foster short-term thinking.
Ensure that the baseline rewards - wages, salaries, benefits, and so on - are adequate and fair. Without a healthy baseline, motivation of any sort is difficult and often impossible.
Rewards do not undermine people’s intrinsic motivation for dull tasks because there is little or no intrinsic motivation to be undermined.
For some people, much of what they do all day consists of these routine, not terribly captivating, tasks. In these situations, it’s best to try to unleash the positive side of the Sawyer Effect by attempting to turn work into play - to increase the task’s variety, to make it more like a game, or to use it to help master other skills.
When the artists considered their commissions “enabling” - that is, the commission enabled the artist to do something interesting or exciting - the creativity ranking of what they produced shot back up. The same was true for commissions the artists felt provided them with useful information and feedback about their ability.
Your best approach is to have already established the conditions of a genuinely motivating environment. The baseline rewards must be sufficient. That is, the team’s basic compensation must be adequate and fair - particularly compared with people doing similar work for similar organizations. Your nonprofit must be a congenial place to work. And the people on your team must have autonomy, they must have ample opportunity to pursue mastery, and their daily duties must relate to a larger purpose. If these elements are in place, the best strategy is to provide a sense of urgency and significance - and then get out of the talent’s way.
Any extrinsic reward should be unexpected and offered only after the task is complete. Holding out a prize at the beginning of a project - and offering it as a contingency - will inevitably focus people’s attention on obtaining the reward rather than on attacking the problem.
Deci and Ryan have fashioned what they call self-determination theory.
We have three innate psychological needs - competence, autonomy, and relatedness. When those needs are satisfied, we’re motivated, productive, and happy. When they’re thwarted, our motivation, productivity, and happiness plummet.
When people use rewards to motivate, that’s when they’re most demotivating. Instead, Deci and Ryan say we should focus our efforts on creating environments for our innate psychological needs to flourish.
Hundreds of research papers point to the same conclusion. Human beings have an innate inner drive to be autonomous, self-determined, and connected to one another. And when that drive is liberated, people achieve more and live richer lives.
The Type B person may also have a considerable amount of drive, but its character is such that it seems to steady him, give confidence and security to him, rather than to goad, irritate, and infuriate, as with the Type A man.
Taking an interest in work is as natural as play or rest, that creativity and ingenuity were widely distributed in the population, and that under the proper conditions, people will accept, and even seek, responsibility.
Intrinsically motivated people usually achieve more than their reward-seeking counterparts. Alas, that’s not always true in the short term. An intense focus on extrinsic rewards can indeed deliver fast results. The trouble is, this approach is difficult to sustain. And it doesn’t assist in mastery - which is the source of achievement over the long haul. The most successful people, the evidence shows, often aren’t directly pursuing conventional notions of success. They’re working hard and persisting through difficulties because of their internal desire to control their lives, learn about their world, and accomplish something that endures.
People oriented toward autonomy and intrinsic motivation have higher self-esteem, better interpersonal relationships, and greater general well-being than those who are extrinsically motivated. By contrast, people whose core aspirations are Type X validations such as money, fame, or beauty tend to have poorer psychological health.
Type I behavior depends on three nutrients: autonomy, mastery, and purpose. Type I behavior is self-directed. It is devoted to becoming better and better at something that matters. And it connects that quest for excellence to a larger purpose.
In a Results-Only Work Environment (ROWE) workplace, people don’t have schedules. They show up when they want. They don’t have to be in the office at a certain time - or any time, for that matter. They just have to get their work done. How they do it, when they do it, and where they do it is up to them.
People still had specific goals they had to reach - for example, completing a project by a certain time or ringing up a particular number of sales. And if they needed help, the manager was there to assist. But he decided against tying those goals to compensation. “That creates a culture that says it’s all about the money and not enough about the work.” Money, he believes, is only “a threshold motivator.”
The idea of management (that is, management of people rather than management of, say, supply chains) is built on certain assumptions about the basic natures of those being managed. It presumes that to take action or move forward, we need a prod - that absent a reward or punishment, we’d remain happily and inertly in place. It also presumes that once people do get moving, they need direction - that without a firm and reliable guide, they’d wander. But is that really our fundamental nature? Or, to use yet another computer metaphor, is that our “default setting”? When we enter the world, are we wired to be passive and inert? Or are we wired to be active and engaged?
Perhaps management is one of the forces that’s switching our default setting and producing that state.
Resist the temptation to control people - and instead do everything we can to reawaken their deep-seated sense of autonomy.
Autonomy, as they see it, is different from independence. It’s not the rugged, go-it-alone, rely-on-nobody individualism of the American cowboy. It means acting with choice - which means we can be both autonomous and happily interdependent with others. And while the idea of independence has national and political reverberations, autonomy appears to be a human concept rather than a western one.
A sense of autonomy has a powerful effect on individual performance and attitude. According to a cluster of recent behavioral science studies, autonomous motivation promotes greater conceptual understanding, better grades, enhanced persistence at school and in sporting activities, higher productivity, less burnout, and greater levels of psychological well-being.
Researchers at Cornell University studied 320 small businesses, half of which granted workers autonomy, the other half relying on top-down direction. The businesses that offered autonomy grew at four times the rate of the control-oriented firms and had one-third the turnover.
“As an entrepreneur, I’m blessed with 100% autonomy over task, time, technique and team. Here’s the thing: If I maintain that autonomy, I fail. I fail to ship. I fail to excel. I fail to focus. I inevitably end up either with no product or a product the market rejects. The art of the art is picking your limits. That’s the autonomy I most cherish. The freedom to pick my boundaries.” - SETH GODIN
New hires at Zappos go through a week of training. Then, at the end of those seven days, Hsieh makes them an offer. If they feel Zappos isn’t for them and want to leave, he’ll pay them $2,000 - no hard feelings. Hsieh is hacking the Motivation 2.0 operating system like a brilliant and benevolent teenage computer whiz. He’s using an “if-then” reward not to motivate people to perform better, but to weed out those who aren’t fit for a Motivation 3.0-style workplace.
Homeshoring: Instead of requiring customer service reps to report to a single large call center, they’re routing the calls to the employees’ homes. This cuts commuting time for staff, removes them from physical monitoring, and provides far greater autonomy over how they do their jobs. (JetBlue)
After a job candidate has worked a thirty-day trial period on a team, the prospective teammates vote on whether to hire that person full-time. At W. L. Gore & Associates, the makers of the GORE-TEX fabric and another example of Motivation 3.0 in action, anybody who wants to rise in the ranks and lead a team must assemble people willing to work with him.
People working in self-organized teams are more satisfied than those working in inherited teams.
People want to be accountable - and that making sure they have control over their task, their time, their technique, and their team is a pathway to that destination.
Human history has always moved in the direction of greater freedom. And there’s a reason for that - because it’s in our nature to push for it.
Mastery: the desire to get better and better at something that matters.
“Throughout my athletics career, the overall goal was always to be a better athlete than I was at that moment - whether next week, next month or next year. The improvement was the goal. The medal was simply the ultimate reward for achieving that goal.” SEBASTIAN COE Middle-distance runner and two-time Olympic gold medal winner
In flow, the relationship between what a person had to do and what he could do was perfect. The challenge wasn’t too easy. Nor was it too difficult. It was a notch or two beyond his current abilities, which stretched the body and mind in a way that made the effort itself the most delicious reward. That balance produced a degree of focus and satisfaction.
Instead of meeting with their charges for once-a-year performance reviews, managers sat down with employees one-on-one six times a year, often for as long as ninety minutes, to discuss their level of engagement and path toward mastery.
Jenova Chen, a young game designer who, in 2006, wrote his MFA thesis on Csikszentmihalyi’s theory. Chen believed that video games held the promise to deliver quintessential flow experiences. While most games require players to proceed through a fixed and predetermined series of skill levels, Chen’s allows them to advance and explore any way they desire. And unlike games in which failure ends the session, in Chen’s game failure merely pushes the player to a level better matched to her ability. Chen calls his game flOw.
Incremental theorists consider intelligence as something like strength. (Want to get stronger and more muscular? Start pumping iron.)
Entity theorists view it as something more like height. (Want to get taller? You’re out of luck.)
If you believe intelligence is a fixed quantity, then every educational and professional encounter becomes a measure of how much you have.
If you believe intelligence is something you can increase, then the same encounters become opportunities for growth.
In one view, intelligence is something you demonstrate; in the other, it’s something you develop.
The entity theory is a system that requires a diet of easy successes. In this schema, if you have to work hard, it means you’re not very good. People therefore choose easy targets that, when hit, affirm their existing abilities but do little to expand them.
Those who did the best typically spent the most time and effort on the mundane activities.
If people are conscious of what puts them in flow, they’ll have a clearer idea of what they should devote the time and dedication to master.
Effort is one of the things that gives meaning to life. Effort means you care about something, that something is important to you and you are willing to work for it.
Mastery is an asymptote.
Why reach for something you can never fully attain? But it’s also a source of allure. Why not reach for it? The joy is in the pursuit more than the realization. In the end, mastery attracts precisely because mastery eludes.
Pursue purpose - and use profit as the catalyst rather than the objective.
Imagine an organization, for example, that believes in affirmative action - one that wants to make the world a better place by creating a more diverse workforce. By reducing ethics to a checklist, suddenly affirmative action is just a bunch of requirements that the organization must meet to show that it isn’t discriminating. Now the organization isn’t focused on affirmatively pursuing diversity but rather on making sure that all the boxes are checked off to show that what it did is OK (and so it won’t get sued). Before, its workers had an intrinsic motivation to do the right thing, but now they have an extrinsic motivation to make sure that the company doesn’t get sued or fined.
They’re busy making money and attending to themselves and that means that there’s less room in their lives for love and attention and caring and empathy and the things that truly count,” Ryan added. And if the broad contours of these findings are true for individuals, why shouldn’t they also be true for organizations - which, of course, are collections of individuals?
A healthy society - and healthy business organizations - begins with purpose and considers profit a way to move toward that end or a happy by-product of its attainment.
A great man is one sentence.
At the end of each day, ask yourself whether you were better today than you were yesterday.
Did you learn your ten vocabulary words, make your eight sales calls, eat your five servings of fruits and vegetables, write your four pages?
Give ourselves our own performance reviews. Here’s how. Figure out your goals - mostly learning goals, but also a few performance goals - and then every month, call yourself to your office and give yourself an appraisal. How are you faring? Where are you falling short? What tools, information, or support might you need to do better?
Seek constant, critical feedback. If you don’t know how you’re doing, you won’t know what to improve. Focus ruthlessly on where you need help.
If someone is bored with his current assignment, see if he can train someone else in the skills he’s already mastered. Then see if he can take on some aspect of a more experienced team member’s work.
Get compensation right - and then get it out of sight. Effective organizations compensate people in amounts and in ways that allow individuals to mostly forget about compensation and instead focus on the work itself.
The most important aspect of any compensation package is fairness. And here, fairness comes in two varieties - internal and external. Internal fairness means paying people commensurate with their colleagues. External fairness means paying people in line with others doing similar work in similar organizations.
Paying great people a little more than the market demands, Akerlof and Yellen found, could attract better talent, reduce turnover, and boost productivity and morale.
The pay-more-than-average approach can offer an elegant way to bypass “if-then” rewards, eliminate concerns about unfairness, and help take the issue of money off the table.
Providing an employee a high level of base pay does more to boost performance and organizational commitment than an attractive bonus structure.
Imagine you’re a product manager and your pay is determined by these factors:
your sales for the next quarter
your sales in the current year
the company’s revenue and profit in the next two years
levels of satisfaction among your customers
ideas for new products
and evaluations of your coworkers.
If you’re smart, you’ll probably try to sell your product, serve your customers, help your teammates, and, well, do good work. When metrics are varied, they’re harder to finagle. In addition, the gain for reaching the metrics shouldn’t be too large. When the payoff for reaching targets is modest, rather than massive, it’s less likely to narrow people’s focus or encourage them to take the low road.
Collins suggests four basic practices for creating a culture where self-motivation can flourish:
1. Lead with questions, not answers
2. Engage in dialogue and debate, not coercion
3. Conduct autopsies, without blame
4. Build ‘red flag’ mechanisms
In other words, make it easy for employees and customers to speak up when they identify a problem. More Info: Collins’s website: jimcollins.com
People at all levels stop doing any activity that is a waste of their time, the customer’s time, or their company’s time.