Read the Chinese Version (中国版本): http://techzhuch.wordpress.com/2013/06/17/激励悖论/
Yet, what is puzzling about incentives is the fact that in most cases they have the opposite effect, they demotivate us and make incentivized tasks ones that are completed more slowly or with less accuracy than non-incentivized tasks.
Swathmore Psychology professor Kenneth Sharpe gives one of the best examples of this:
“In the early 1990s, Switzerland was getting ready to have a national referendum about where it would site nuclear waste dumps. Citizens had strong views on the issue and were well informed. Bruno Frey and Felix Oberholzer-Gee, two social scientists, went door-to-door, asking people whether they would be willing to have a waste dump in their community. An astonishing 50% of respondents said yes — this despite the fact that people generally thought such a dump was potentially dangerous and would lower the value of their property. The dumps had to go somewhere, and like it or not, people had obligations as citizens.
Frey and Oberholzer-Gee then asked a slightly different question. People were asked whether, if they were given an annual payment equivalent to 6-weeks worth of an average Swiss salary, they would be willing to have the dumps in their communities. So these people, who already had one reason to say yes — their obligations as citizens — were now given a second reason — financial incentives. Yet in response to this question, only 25% of respondents agreed. Adding the financial incentive cut acceptance in half.”
In other cases we see day care centers that are facing trouble with parents showing up late to pick up their kids, so the day care did what any reasonable business would do and added in a $25 late fee. Ironically even more parents began to show up late to pick up their kids.
These paradoxical results are simply due to how we as humans make decisions. When looking to the child care situation or the waste dumping we are making moral decisions, examining our responsibility to ourselves, to our children, to our community and to the other people involved in this scenario, we are making a judgment call of it I’s the ‘right’ thing to do; the moment money or such a related reward is involved we start to evaluate not is it the ‘right’ thing to do but rather “Is that worth it to me?” we have a new system of measurement that goes beyond the scale of moral responsibility and lands in the ever changing value of money. Is $25 worth another hour at the office? Is 6-weeks of my wage worth trash in my backyard? These are the questions that the brain begins to frame when trying to decide if an incentive is worth it.
In the world of business we often want to motivate our employees, find ways to increase their performance standards, and a common method of this has always been through providing bonus incentives. So how can we translate our understanding of the incentive paradox to business?
Simple, we take their decisions from being financial ones to moral ones – we want to ensure our employees always feel that working to the best of their ability is the morally responsible thing to do.
This ultimately comes down to company culture, let people love the place they work, make it a tight knit community; provide them with perks prior to performance, perks they want to keep. The tone is simple, don’t tell people what to do, let them police themselves, but with the understanding that work needs to get done. In many of the top companies around the world the mantra is very much to provide tons of perks for employees and express to them, do what you please so long as the work gets done.
Maybe you have an employee that likes to listen to music while he works, or someone who needs to get up from their desk for a quick walk around the office every now and then just to clear their brain, allowing them to do this and providing a valuable work environment for them moves this past an equation. You aren’t doing these things in return for work, you are doing these things for them directly; and in turn they will feel a responsibility to do their work to directly better the community they’ve become a part of.
Some of the most productive employees I’ve ever had would work a five-day week, and one day a week hardly ever seemed to be working on their assigned tasks, some of them even worked on other personal projects during this time; but when deadlines rolled around high quality work was always on my desk as they knew they were solely responsible for the tasks at hand. It wasn’t a tradeoff, it was a point of pride and morality.
Looking for more info about the motivation paradox? Check out Dan Pink’s TEDtalk on motivation: http://www.ted.com/talks/dan_pink_on_motivation.html