If you want to get someone to do something, what do you do? Classic management theory says that you offer them a reward, contingent on performance. If you achieve this level of performance, you will receive this reward. That’s how bonuses work, and commission. It’s supposed to motivate people to improve their performance.
But it doesn’t work.
Over at least 40 years, social scientists have been carrying out experiments that show that contingent rewards (“If you do that, then you will get this”) not only don’t work in quite a lot of circumstances, but can even slow down performance and make it worse.
The science of rewards
Social science shows that rewards focus the mind under certain circumstances. When the task is simple, and the solution is obvious, rewards really work. But if the solution is not clear, then rewards dull thinking. Other experiments have shown that for mechanical work, rewards work, but for cognitive work, they don’t. In fact, they can even have a negative effect on cognitive performance.
Dan Pink, a career analyst and formerly Al Gore’s speechwriter, has considered why this might be so in a TED talk on the science of motivation. He suggests that it’s to do with which side of the brain is engaged. If it’s the right brain, the creative side, then contingent rewards don’t work. But the next part of the issue is that in the 21st century, most white collar jobs require at least some creative thinking. The world of work has very much changed, and creativity is more valued, if not absolutely essential. And as a result, ‘carrots and sticks’ don’t work.
So it makes no sense to keep on using this type of motivator, but what should we do instead?
Intrinsic and extrinsic motivation
It turns out that intrinsic motivation is much more important for improving performance. Intrinsic motivation is what comes from inside us, rather than extrinsic rewards, such as bonuses. Research suggests that there are three intrinsic motivators that are really important:
- Autonomy: the urge to direct our own lives
- Mastery: the desire to get better at something
- Purpose: feeling that you’re doing something good and worthwhile
Autonomy almost directly conflicts with old-style management theory. Old-style management works very well when you need people to do exactly what you tell them. But people prefer to have more control over their own lives: autonomy. It’s a scary thought for many managers, but giving individuals autonomy can have some amazing results.
Atlassian, a software company in Australia, sets days aside for engineers to work on ‘anything they want’, as long as it’s not part of their normal job. They have 24 hours to deliver something new, and present it to their colleagues. As a result of these ‘overnight delivery’ days, employees have come up with some fantastic pieces of software that would never otherwise have been created. It works so well that the company has now adopted Google’s 20% time concept: the idea that engineers can spend 20% of their time working on something that’s not part of their normal job. It certainly works for Google: many of their most popular innovations were created in that 20% time, like gmail. Other companies have adopted ‘no schedule’ working, where employees can work exactly when and where they want, as long as they get the job done. Productivity goes up, turnover goes down. Autonomy really works, for companies as well as individuals.
As a further example, think of Wikipedia. If you’d asked an economist about two competing models of encyclopedia production, one where people got paid to do research, and one where they did it for fun, they would have said that the first was more productive. But now we have Wikipedia, demonstrating that individuals genuinely do things because they’re interesting, and valuable socially: both intrinsic motivators that have been ignored by business for decades.
Why does it matter?
In the 21st century, financial rewards are increasingly seen as less important by individuals. The world of work is fragmenting: individuals are choosing to work for themselves, with much