Wednesday, June 15, 2011

Incentives matter, but what kind?

Monetary incentives work for simple, mechanical tasks, but not so well for cognitively loaded tasks.

Once monetary compensation is high enough that people can turn their attention to the work, additional compensation (or emphasis on compensation) can actually have negative consequences. What really elicits good performance: autonomy, mastery and purpose.


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3 comments:

sykes.1 said...

"Autonomy, mastery and purpose" are the motivations of academics. I doubt very much that they motivate the population at large. By the way, after 37 years of service on faculties, I came to believe that the chief motivation of academics was "fame," which of course is delusional. The average academic paper in high impact journals goes unread, and more importantly it deserves to be unread.

8:25 AM
silkop said...

"Autonomy, mastery and purpose" (not to mention "team work", "fun workplace atmosphere", "working for greater good") is what employers love to give their employees in place of higher monetary compensation. It is true, when you have accumulated enough wealth to never ever have to worry about earning money again, then you can either turn to recreational drugs or indeed safely pursue the bs of "autonomy, mastery and purpose". Until that point, if you succumb to these motivational factors, you can be sure that someone else (smarter) will take advantage of your naivety. You're most likely going to realize and regret it later in life. Or maybe "wonder" about what went wrong and complain about how evil and corrupt the social system "has become", if you manage to stay dumb until old age.

10:50 AM
Mark said...

The video was worth listing too. The speaker seems to say this is a new discovery though, which I find a little surprising.

e.g. This is from an Alfie Kohn article from 1993:
Rewards work, don't they? The answer, surprisingly, is mostly no. While rewards are effective at producing temporary compliance, they are strikingly ineffective at producing lasting changes in attitudes or behavior. The news gets worse. About two dozen studies from the field of social psychology conclusively show that people who expect to receive a reward do not perform as well as those who expect nothing. This result, which holds for all sorts of rewards, people and tasks, is most dramatic when creativity is involved.
http://www.alfiekohn.org/managing/fbrftb.htm

Or even say Hertzberg's Motivation Factors vs Hygiene Factors theory from 1959. Or half a dozen others. The idea that larger monetary rewards don't always increase motivation is pretty old.

I've personally experienced this, after finishing my PhD where I had been paid $0 and starting a job where they paid $$$. Even though my salary was at the top of the market, it was less than my mental estimate of the value of my work, and so was demotivating. I was much more motivated with a salary of $0, because that was clearly unrelated to the value of my work, and so factors like pride and reputation and the love of the thing itself dominated. I tried to estimate the number where money alone would equal intrinsic motivation (i.e. my mental estimate of the value of my work) and I think it's in the millions of dollars per year range.
I especially thought that the bonus scheme we had was daft, because the range between average work and excellent work was only a small fraction of salary. A manifesto for social loafing if ever there was one. For a bonus scheme to be meaningful it would need to have a range of several hundred percent of salary. Better to abolish it alltogether.

I actually came to like the job as soon as I forgot about the salary, because it was genuinely interesting with lots of autonomy and purpose :). The money just got in the way.

2:36 AM

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