Tag Archive for 'motivations'

Higher pay leads to worse performance

Should we encourage people to be creative?

Most people would say ‘yes’.

Should we reward people for being creative?

Again, most people would say ‘yes’.

The trouble is that financial incentives don’t work for creative tasks. When we are being rewarded for doing better, we tend to get trapped in our existing ways of thinking and pursue solutions within our perception of the ‘rules’. But creativity is so often about breaking the rules – about thinking outside the box.

In the video clip below, Dan Pink cites researchers from the Fed Reserve finding that while tasks involving only mechanical skill would yield better performance with higher rewards, but where “even rudimentary cognitive skill” was involved, higher rewards led to people doing worse. Low and medium rewards yielded the same level of performance but high rewards led to worse performance.

Higher pay makes you work harder. But doesn’t make you better.

Higher pay leads to worse performance if you have to think.

It might have something to do with functional fixedness. Stemming from gestalt psychology researchers, this looks at how trapped we are at thinking of something as having a single function. Like being able to use a box as a platform rather than just as a box. Functional fixedness, it seems, is exacerbated by extrinsic rewards.

Maybe it’s a good thing that Australia’s Prime Minister has decided to not give himself a pay rise.

High performance comes from work where we enjoy autonomy, where we can experience a sense of mastery, and where we can feel a sense of purpose.

Geniuses tend to be motivated by intrinsic motivators – the sense of mastery rather than the accumulation of money. After all, if you’re focused on the reward, it’s hard to be focused on doing the task in front of you as well as you can.

It’s like the story of the man who was so busy chopping down a tree that he never thought to take a moment to sharpen his axe. And that guy certainly wouldn’t have time to put down his axe and head to the store to pickup a chain saw.

And that’s like the girl with the Rubik’s cube – who struggled whether to give up her completed side that was stopping her from solving the puzzle.

When we’re so busy doing, it’s really hard to do well.

How well does your current work line up?

Are you giving yourself enough time to be the genius that you could be?

What drives you?

A few minutes ago, I was asked to attend an induction ceremony. As I perused the agenda for the early morning meeting (my unborn own child would be considerate enough to wait until after 8:45am on a Saturday morning to be born!!!) outlined eight outcomes… of which at most one were relevant to me. For me, that’s the sort of meeting that I try fervently to avoid, so I phoned the person who called the meeting to confirm whether I needed to attend… and the response that I got astounded me: “it’s procedure”.

“it’s procedure”!!!!!

Maybe wasting your time is “procedure” for some, but I like to not be one of those people… but it got me thinking about motivations. I realised – as I was speaking with the MBA-educated meeting convener – that she was motivated by fulfilling the criteria (going through the motions or just doing stuff), rather than actually achieving outcomes.

It really got me annoyed for a few minutes… until I got curious.

I noticed that some people sincerely believe that life is accomplished by going through the motions… it’s more than the difference between being efficient and being effective – I’m really talking about alignment. I’m talking about the importance of getting your actions and outcomes aligned with your overall direction or vision, and consistent with your values.

So where are you at? What are your values? How aligned are you? How aligned is your organisation?

There are now more than a hundred billionaires in China – and the youngest was born in the 1980s! And you can bet that they are lean, focused and disciplined to get profit… and profit is where you are better aligned to deliver value than your competitors. Fundamentally, that’s why capitalism can work so well… it rewards and challenges us to create ever-greater value.

In a world of hypercompetition, free design (as it is once you get to scale) and a boundary-less world alignment is everything… to deliver alignment you have to design it, necessitating self-awareness and the determination to understand your underlying values.

Because if you don’t, you can be sure that someone else will.

Daniel Smith




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