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Are incentives the great motivator we think they are?

I spent the Easter weekend down at the Jersey shore in Manasquan with my in-laws. We drive up from DC on Friday then we drive back down Sunday evening. Usually after about the first half hour on the way home I’m the only awake in the car and I’ll throw on a book on tape/mps3. Anyways I decided on the way back last night that I would pick up Daniel H. Pink’s book “Drive: The Surprising Truth About What Motivates Us.” I mentioned in my blog post about ”To Sell Is Human: The Surprising Truth About Moving Others,” that it changed the way I thought about a lot of things and “Drive” is the same way. It’s a really incredible book and it just makes you rethink a lot of things.

In my case, almost everything he said seemed to be obvious but I just never thought of it that way because my whole life I’ve been trained to think and frame things in what he calls Motivation 2.0. This is essentially carrots and sticks. You go to business school and they talk about management and control functions, incentivization techniques, and aligning goals, objectives, and performance structures so you can get people to achieve the types of things that you want them to. He sort of takes that and turns it on its head.

He goes back and talks about some studies that were done in the 40s, 50s, and 60s and have been worked on continuously then where science is used to back up that people are more complex than just being motivated by incentives. Essentially, for a long time up until very recent history we’ve sort of thought about people like you would your dog. For example, if you want your dog to roll over and do tricks you teach them that they get a treat afterwards and if they do something bad they get punished so they stop doing that. Not surprisingly it turns out, people are a little more complicated than that.

So one of the great studies he talks about is one that was conducted by a gentlemen that was doing some studies with monkeys. He had a simple locking mechanism and he put it in their cages to get them acclimated and before he got to the test he was going to be run (he was going to incentivize them to open the locks) something surprising happened. It turns out that once he put the mechanisms in their cages, they started solving them without any incentive. It started to make him think and over the next 30-40 years up until today the same gentleman has been working to follow up on that with studies with people.

It turns out that sometimes incentivizing people to do things, providing cash rewards for things actually lowers their propensity to do those things. People, by virtue of linking monetary value to a task, turns it into work instead of fun or something that has its own intrinsic value. He talks about people being extrinsically motivated i.e. cash rewards and that’s a very hard model to sustain. He likens it almost to cigarettes or drugs, where people do it and it then triggers receptors in their brains. Eventually it takes more and more to trigger those receptors and to get that same feeling.

With the intrinsic motivation, people want to solve the problem because they want to solve a problem and that that doesn’t go away and it doesn’t change. So he talks about being very careful about how you incentivize people because once you head down the extrinsic path, you’re going to have to reward more and more frequently and with things of greater and greater value in order to sustain the type of effort that you want. The effort that you probably could have had, if it’s a particular type of task, simply by providing a good work environment.

He talks about how important autonomy is in many of today’s tasks. That by providing people with an environment where they’re able to think about their own approach and they’re given latitude in how to solve problems, they’ll often perform at a much higher level than if you incentive them. One of the things that incentivizing people does is it pulls other options off the table. So instead of them thinking big picture and solving it in a unique way, they begin to narrow down their focus to simply achieve that goal. He shows this by pointing out the short view of executives and publicly traded companies. You know so much time and effort is spent to meet quarterly numbers and you see people very rarely surpass those numbers. This is because they are incentivized and their performance bonuses are to meet the numbers. It’s just a really really interesting book, at least to the point that I’m at and when I finish I’ll follow up with another post. I’m curious to know what other people think about this research on incentives. We have a performance and incentive program at our organization and it makes me want to revisit that in light of some of the things that I’ve read about and try to make our work structure a little more progressive and align more to the science that’s out there on this topic.

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Profile Photo Henry Brown

Would guess it would depend on one’s definition of an incentive… Have designed programs that one of the incentives was an “improved” environment to solve problems. (Staff members were rewarded by a finite number of additional telework days)

IMO another major shortcoming of most incentive programs is one size fits all… An introvert could be much more appreciative of a “reward” with little public recognition and others would bask in the glory of public recognition of their accomplishments.

In both cases, depending where they were at on Maslow’s “hierarchy of needs” a small cash reward could have minimal impact

Profile Photo Bill Brantley

@Henry – Exactly! This is why I personally don’t like the forced fun events such as a holiday party where all employees are forced into a room to socialize. Some employees love that which is fine but there are other employees who prefer a quieter gathering or just some early time off so they can celebrate on their own. Smart managers find out what motivates the individual employee and tries to meet that need.

Profile Photo Daniel Crystal

Great post. I’m actually in business school now, and one of the recurring themes is that we’ve become so good at process and efficency, that innovation (like those monkeys figuring out the locks on their own) is going to be the key differentiator between successful and unsuccessful ventures. With shrinking budgets all but certain over the next couple of years, the government needs to start thinking that way. Unfortunately, we excel and executing processes, not necessarily asking ourselves how we could do things differently and/or better.

Profile Photo Dale M. Posthumus

It is indeed about defining “incentives”. It is not only money, but many other things — one size does not fit all. Money does work, when the program is done right. A focus on short-term goals may yield short-term success, but may well threaten long-term success. Too many approaches to incentives and motivation are focused incorrectly and tend to be a single program that does not consider the range of people in an organization.

Profile Photo Marian Henderson

It’s also about knowing your people. I had one employee who wanted to be kept busy all the time. I was able to delegate to her and push things down to her because I knew that she had a drive to succeed at any particular task that I assigned. Her incentive was actually the fear of being bored!

Another employee that I have likes to tinker with things in Excel. His incentive is to finish his work timely so that he’ll have more time to “play” and problem solve.

Profile Photo Jane

Very good post. I have been saying for a long time, ‘one size does not fit all employees’. Give the employees the tools and time they need and you will be surprised at how much they can accomplish.

Profile Photo Joshua Millsapps

Completely agree with Marian that everybody is different and taking the time to know what makes people tick is part of being able to effectively incentivize people.