“Carrots Dressed As Sticks”

Sometimes we think we know what motivates employees.   Sometimes we are right. Sometimes we are dead wrong.  For an interesting look on this fascinating subject, a recent edition of The Economist (January 16, 2010) has an article entitled:  “Carrots Dressed as Sticks.”

Tanjim Hossain of the University of Toronto and John List of the University of Chicago conducted a study that focused on the hypothesis that the value people attach to objects is affected by what they already have; people seem to hate losing something already in their possession more than gaining something equivalent.

The study was conducted in a Chinese electronics factory.  The managers in this factory were interested in exploring ways to make their bonus plans more effective.  Instead of focusing on the amounts of the bonuses, Hossain and List instead decided to concentrate on the wording of the letter informing workers of the details of the bonus plan.

One group of workers was told at the beginning of the week that they would receive a bonus of 80 yuan ($12) at the end of the week if they met a certain production target.  A second group was told they had “provisionally” been awarded the same bonus, but they would “lose” it if they did not reach their target.

The different ways of describing the bonus actually amount to the same thing.  However, the hypothesis of the study was that the second way of describing the bonus would work better.  The workers would think of the provisional bonus as “already theirs,” and work harder to prevent it from being taken away.  This is exactly what Hossain and List found.  The fear of loss was a better motivator than the prospect of gain.

The article reinforces something I have believed for a long time:  human motivation is a complex and often counter intuitive phenomenon.  It has many dimensions and nuances.  It resists simple, logical explanations.  There are authors and consultants out there who would have us believe that they have found the secret to human motivation.  They will tell us that “it’s money” or “it’s autonomy” or “it’s creativity” or it’s whatever.  My advice is this:  beware of those who claim to have “the answer.”  Every individual is different, every organization is different, and every work situation is different.  Rather than looking for the magic answer, organizations would be better served to understand their workforce better.  What motivates the people that work in your organization?

There won’t be one answer.  That’s the challenge—and the beauty—of human motivation.

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