Motivation

A lot of interesting stuff is being said about motivation these days. We have moved beyond the old socialist "rewards-are-irrelevant" thinking as well as the equally old capitalist "rewards-are-all-there-is" thinking on motivation. You can't expect people to turn up for work and put in more than their fair share of effort without reward, but neither does the simple carrot-and-stick philosophy work for too long.

Before I spew my wisdom on this, a couple of modern viewpoints on motivation would be worth looking at:

Author Dan Pink thinks financial incentives of the traditional kind do more harm than good on tasks involving creativity and cognition. He believes people are better driven by intrinsic motivation - the need for autonomy, mastery, and purpose.




Dan Ariely, the High Prophet of behavioural economics and predictable irrationality has done some work that studies the effect of incentives, and has come up with some similar answers.



Ariely's experiment indicates that at very high potential payoffs, average performance actually goes down.

Big banker bonuses anyone?

It's hard to think of those million-dollar banker bonuses actually leading to loss-aversion stress, but perhaps with their million dollar trophy girlfriends and million dollar mortgages and Manhattan lifestyles, it's not too
hard to imagine once you try.

So, high potential payoffs in the short term can be a real stressor, especially with human loss aversion thrown in and this has a provably negative impact on performance.

Does that mean that the traditional system of incentives needs to be discarded? Perhaps not fully. The point of rewards is to be just big enough to be noticed, and big enough to remove the incentive to deliberately underperform. Too little and too much seem to be equally bad here. Sizing the available reward just right would help. Goldilocks rather than Goldman Sachs, perhaps?

Rewards in kind, like paid vacations, can be better than "cold hard" cash, so at least part of the success reward could be in kind. This also removes the temptation to spend the reward before it's actually earned which lands people in loss-aversion-stress territory. In addition to sizing rewards, provide them in kind.

Traditional reward mechanisms must be supplemented, perhaps even supplanted by intrinsic motivation at the higher levels - where obscene bonuses have been the norm so far.

And how does one encourage intrinsic motivation to develop? One way is to create an organizational culture that emphasizes intrinsic motivation. For want of a better framework, let's adopt Dan Pink's - the three pillars of intrinsic motivation being autonomy, mastery, and purpose.


It's much harder than it seems - having seen organizations fall into the trap of control, hyper-standardization, and narrow-slicing of tasks, all in the name of efficiency, often the worst enemy of effectiveness. A system that lets people attain intrinsic motivation even at the cost of apparent inefficiencies is going to  deliver better results in the long term.

Even at the cost of seeming inefficiency, it will pay to drive teams to be self-directed, loosely controlled, less than perfectly standardized, and populated by people who identify with what the organization believes, not just what it does. 

Rule-driven bureaucracies as mistake-avoidance mechanisms are an obvious no-no. Systems that emphasize severe negative consequences for mistakes end up doing two things - raising stress levels, which we have seen is bad, as well as focusing energy on the avoidance of mistakes rather than positive results. Mistakes are the price that needs to be paid for allowing people to be autonomous, and also to gain mastery.  The temptation to avoid mistakes at all costs is the worst enemy of mastery.

In practice, any attempt to foster a culture of autonomy, mastery and purpose and hence intrinsic motivation will usually result in a battle against short-sighted efficiency and standardization imperatives. That battle, from experience, is likely to be harsh and difficult to fight.

Having won that battle and having established a culture that fosters intrinsic motivation, populating the organization with people of the right kind isn't trivial either. Both hiring and developing the right people in the organization need thought and organizational attention. People who really like doing stuff, though rare, can be invaluable. It would be difficult to hire people like that for money alone, though the positive monetary impact of their presence to the bottom line is indeed huge. Getting them excited would mean guaranteeing them a free run with few limits, and providing them a substantially, but not insurmountably, challenging problem to solve. Doing what it takes to get and keep them requires a good degree of organizational flexibility.

All this is something for entrepreneurs to look out for, and use as a competitive advantage. It does seem that it's easier to do at the start of an organization's life, and becomes increasingly difficult as it grows, unless it becomes part of the organization's "DNA", and it is willing to tolerate seemingly inefficient practices with a deeper purpose.

That having been said, here a note of caution is called for.


The applicability of these toy experiments to reality must not be accepted too uncritically. The Pepsi Challenge must live as a perennial reminder that quick experiments often give dramatically wrong results where humans are involved.


Research in this domain continues, and must be watched closely.