One of my favorite TED talks comes from a man named Daniel Pink. What Daniel talks about in the above video is the puzzle of motivation; basically, why financial incentives for employees (extrinsic incentives) will have a negative effect on success. As a matter of fact, employees are more successful given no financial incentive to complete a task.
Think about this: You all most remember Encarta, which was developed my Google. Google hired top notch employees to make this online encyclopedia. Now think of Wikipedia, a free online encyclopedia created by everyday people who have intrinsic motivation to continue to add to Wikipedia. Which encyclopedia is more successful today in 2012? This is because people with intrinsic motivation enjoy what they are doing more than people who have extrinsic motivation. Everyone who contributes to Wikipedia does so because they enjoy it, none of them are paid.
What science has taught us is that the more financial incentive someone is given to complete a task, the more narrow minded they become. A person who has a high financial incentive will stick to the same idea, even if it is wrong, to try to complete the task as fast as possible. A person who has no financial incentive is proven to be able to complete the task faster, because they try different techniques and are more open minded to complete the task.
So what does money do to business? It still makes us happy, but it is not necessarily a motivator for work. It can cause things such as willful blindness, and actually make us less successful than someone who is intrinsically motivated. Overall, we must find what make us intrinsically motivated in order to be successful in the business world, because as science shows, money is no longer cutting it.
Cheers,
Dustin Caissie
Great post Dustin! I found Pink's talk very interesting and it does put into question the practice of financial incentives as a motivational tool. The candle problem certainly illustrates how financial incentive can narrow down one's processing.
ReplyDeleteThe one area of his talk that I felt was lacking was the real world application of this new business operating system.
"Paying people adequately and fairly. Getting the issue of money off the table."
Compensation is a big issue for businesses, and saying that they simply need to pay employees adequately and fairly is oversimplifying the problem. If a business can get to a point where all of their employees feel appropriately compensated, I believe that this operating system would be worthwhile.
The model he speaks of is definitely interesting. Although I believe it is only a short-term answer. If employees do not have some sort of structure in the long-term productivity may decrease. Although I extremely agree with the incentives part because if employees are asked to perform a task and will be rewarded after, I believe that the pressure fro completing the task and to get that incentive will hurt the quality of the work performed.
ReplyDeleteI had similar doubts to Justin however, once I thought about it, Daniel Pink is far more of an expert than us and i do not believe he would make a statement like that without researching whether it was in fact financially feasible for most knowledge based organizations. And that is the key factor to consider: we are talking about knowledge based organizations here. And in those organizations innovation is paramount. His theory is as much, if not more about facilitating innovation in the workplace as just about getting tasks done quickly. Innovation can be figuring out new methods of completing a task (i.e. faster) but in many of these organizations it is also making improvements on existing products and inventing entirely new ones. So in these organizations I believe, based on what Pink says, companies do have the financial ability to pay their workers enough to not worry about bonuses. Because bonuses have become common in knowledge organizations the companies would likely be spending similar amounts either way. Companies like Google and Atlassian are already implementing strategies along these lines.
ReplyDeleteWow! I did not know that, i would agree with that mis-rewards may not lead poor performance. Nowadays, mis-rewards are one of the most common problems in organizations and especially in organization's management layer. Some CEOs may reward anyways no matter how they performance. Lots of CEO have very high bonus every year. The average incomes of CEOs are 41 time compare to regular workers. It is an unfair phenomenon. It is harmful for organizations. Mis-awards may leads misunderstanding for the CEOs, even some of they did not do anything, or performance. They would keep the way they are, and never think about improve. However, rewards should give people really needs and they would improve performance, according the video mechanical work can be improved by bonus, thus, why do not we give the reward to first-line workers? It can directly improve performance and productivity. CEO's performance should not directly related performance, their job is mechanical work. The reword just let them make decision base on focus-bonus side. Finish one task; get a bonus that is what they think, no matter the decision good or bed.
ReplyDeletejiawen fu
The incentive program is a sensitive subject to judge whether it is good or bad because it involves ethical issues.
ReplyDeleteThink what the purpose of incentive program is. It is not simply giving a certain amount of money to people. Companies apply incentive programs to stimulate their workers and acheive their goal such as improving productivity. For example, manufacturing and service companies ought to use incentive programs to increase their productivity.
In my point of view, tipping is similar to giving incentives. I think most of us have experience in tipping. I want to ask you why you give some tips to employees. It is because of the way to repay them for all their effort and kindness.
Also, think about if a company gives incentives to employees who use public transporation for their daily rides to work. They will get recognition from the society as an environmentally friendly company. It is a winwin situation because both the company and employees benefit.
Incentive program could be a key element to improving various abilities such as productivity, society reputation, etc., which are most companies' targets.
- Ki Cho, Jung -
“As long as the task involved only mechanical skill, bonuses worked as they would be expected: the higher the pay, the better the performance.” This was a quote presented by Daniel Pink and when you think about it most people in today’s society think that this statement would be true, where bonuses would give employees motivation. However Daniel Pink informed us that higher incentives led to worse performance and said that rewards narrow peoples focus. It seems like rewards could create dehumanization where people are hoarding their knowledge from other employees because they want to get the bonuses them self. This could create knowledge as being a competition and think knowledge is power and they wouldn’t share their skills they have gained with each other. Most business today succeed when employees collaborate their ideas and share their skills and experiences with one another which can be known as rehumanisation. A solution for this issue could be for business to introduce deferred rewards which are given to employees who are about to retire therefore the young employees are motivated to stick around but at the same time this would not affect their creativity and would keep them open minded. Business want employees to interact therefore these rewards that are offered encourage employees to work individually. Once employees get one reward they are expected to get a reward every time it’s offered which could destroy their work ethic, creativity and productivity.
ReplyDeleteI also agree with Dustin where employees stay motivated because they are interested in their specialized position however what happens if you don’t get that job you were looking for? How are you supposed to stay motivated? Maybe employees stay motivated because they like the atmosphere of the company or they get along good with their co-workers.
It’s hard to wrap your brain around the fact that money is not a motivator however I do also agree with Ki Cho Jung where tipping is a huge motivator in this industry. These tips are given from customers and not the business itself so maybe they are not classified as rewards.
Ashlyn Somers