We live in “instrumental” times.
This is no more apparent than in the title question. I’m sure the teachers among you are asked this question a lot. I understand the question; I have asked it myself. Students don’t want to waste their time on material that isn’t going to “count”. Seth Godin’s blog from Friday, February 2 got me thinking about this question. He wonders what it would be like if people were simply curious instead, wanting to learn for the value of it instead of always trying to minimize one’s effort (http://sethgodin.typepad.com/seths_blog/2018/02/what-motivates-you.html).
I don’t blame students for asking this question--we’re to blame. We made them this way, pushing their natural curiosity into the background. We created the educational system they grew up in, that focuses on grades and achievement test scores. When students graduate from college and go to work they ask the same question: “Will this count? If I do this, will I be rewarded for it and if I don’t do it will I be punished for it?” We engage in activities because there is a payoff: Good grades; high test scores; getting in a good college; and getting a good job, good rating, big raise, or big promotion. Or, we engage in activities to avoid a bad payoff: The wrath of our parents; the wrath of our boss; a dead-end job; passed over for promotion, or becoming mired in middle management. Most of us don’t do things at work because we are curious or because they are fun, enjoyable, challenging, or meaningful for some larger purpose.
Fear and incentives--this is the essence of motivation in organizations. This is the legacy of agency theory, one of the “mother theories” behind many of our traditional compensation and performance management (PM) practices. If we want employees to perform, we need to incent, threaten, and "menace" them. This is Seth’s point: "We are taught to fear the boss, fear the review and our performance ranking and we only do the work if we get paid for it.” And because we are smart, we adapt. We become instrumental thinkers and behavers. We ask what’s on the test, we manipulate the incentive system, and we learn to compete with our colleagues for top ratings and rewards.
It will be an uphill battle for curiosity, working against these principles that are so deeply embedded in our thinking. We are programmed to think instrumentally. Most of us spent countless hours in school learning classical economic and psychological principles. We have a built-in bias favoring instrumental (extrinsic) rewards. Research shows people overestimate how much other people care about extrinsic features of a job, such as pay, and underestimate how much people are motivated by intrinsic job features (e.g., challenge, purpose). A study by Nancy Katz and Michael Beer showed executives share the same bias. Interestingly, executives in this study said they themselves weren’t motivated by the money and they didn’t believe incentives were very effective. They adopt them primarily because other companies use them. So…we rely on incentives because we believe people want them and because other companies use them, despite not thinking they are effective. Those of you familiar with the Abilene Paradox might feel, when it comes to instrumental thinking and incentives, that it’s a hot day in Texas and we are all headed to Abilene despite wanting to be on the shaded porch sipping sweet tea.
Hiring people who are instrumentally oriented may not be good for our employees or our companies. Research by Donald McCabe and Linda Trevino shows that students who are more instrumentally motivated (in school to get the degree), the ones who are asking if this will be on the test, are more likely to cheat in school than intrinsically motivated students. The ends justify the means. What’s worse is 85% of students in their studies were in college for instrumental reasons. The biggest cheaters of all? Business school graduates. This is sobering considering these students will one day be running our companies. And what happens when students achieve their instrumental goals? Research by Christopher Niemiec and his colleagues at the University of Rochester found that for students with more extrinsic career aspirations (e.g. making a lot of money), achieving them did not make them happier. In fact, compared with students who had other more intrinsic career aspirations (e.g. purpose-related) students with extrinsic goals had higher levels of anxiety, depression and other negative indicators.
We also send clear signals to employees about what’s important, and it’s not curiosity. When we pay a new hire a big signing bonus or we pay an employee a big retention bonus, we are “buying” them. We are teaching them that money and extrinsic factors are the important levers and we are diminishing the value of other elements of our employment offer (meaningful and challenging work, making a difference for customers, working with great teammates, etc.). We are teaching employees that motivation is more about handcuffs than curiosity. I am reminded of the wonderful quote attributed to Antoine de Saint-Exupéry:
“If you want to build a ship, don't drum up people together to collect wood and don't assign them tasks and work, but rather teach them to long for the endless immensity of the sea.”
This isn’t the way it works in organizations. We pay people to collect wood and to build the ship and we monitor their performance and fire them if they screw up. And when you pay people to collect wood and build ships, they seem to forget all about the endless immensity of the sea. Research shows the instrumental thinking created by our PM and reward systems “crowds out” the natural intrinsic motivation we have for doing the work. When there is a payoff involved, we work for the payoff instead of for the enjoyment and the fulfillment of a job well done. Curiosity doesn’t stand a chance.
What should concern all of us is our practices appear to be actually changing our employees. Psychologist Kathleen Vohs has studied the effect of money on people’s behavior for the better part of 10 years. Much of her research involves priming…exposing experimental subjects to stimuli related to a specific subject (in this case money) but usually at the unconscious level. Her research finds money-primed individuals don’t ask for help and they tend to be less cooperative and helpful to others. They prefer to work alone, play alone, and they put more physical distance between themselves and others. In short, money-primed individuals focus more on themselves. Economist Steven Burks and his colleagues did a brilliant study with bicycle messengers that sheds additional light on this problem. They found bicycle messengers at firms that have adopted P4P systems are less cooperative in the laboratory, on the job and off the job. Most strikingly, this wasn’t simply a selection effect, with more individualistic, “egoists” being attracted to firms with P4P systems. Working under P4P schemes actually caused an increase in more self-serving, egoistic behavior among otherwise cooperative people, and it did so very quickly. Michael Lewis (“The Big Short”, “Moneyball”) reinforced this point in discussing the financial crisis of 2009:
“Incentives are at the bottom of it all. Part of this is a moral problem that grows out of the change in structure of Wall Street. When there were partnerships and people’s money was on the line … they were encouraged to behave in ways that were to the long-term benefit of the organizations they belonged to. Long-term behavior is just much different from short-term behavior—it encourages a different morality. And for several decades on Wall Street, the short-term sensibility has been encouraged and compensated very highly. The incentive system has changed and changed the values of the people who work there.”
It is frightening to think the way we manage and reward employees may be changing how they think and what they value but other research shows just how easily this can happen. Economists Uri Gneezy and Aldo Rustichini conducted a study with an Israeli daycare center. Parents were showing up late to pick up their children so the daycare center implemented a $3 fine to reduce late pick-ups. The result was an increase in the number of late pickups. The fine appeared to change the frame for parents. Before the fine, parents showed up on time because daycare workers have families of their own to get home to (a prosocial frame). The fine replaced this frame with a market frame where the cost of “extra time” was $3 (a fairly modest price) and parents decided how much extra time they want to buy. Late pickups didn’t improve even after they abolished the fine. Mental models are stubborn.
It’s bad enough that we may be changing the motives and the thinking of our employees but we may also be creating a “doom loop” reinforcing the need for these traditional PM and reward systems. Management scholar Jean-Francois Manzoni believes the use of short-term financial incentives makes pay more important to people, which in turn makes their use more necessary, creating a self-fulfilling cycle of increased reliance of them. This is exactly what Sanford Devoe and his colleagues found in their research. The more money people earn (especially based on their own efforts and labor), the more important money became to them. An organization that “lives by the sword” may “die by the sword” as they must continue to “up the ante” as money becomes more important to their workforce. Others like Jeffrey Pfeffer and Robert Sutton, vocal critics of these systems go even further, arguing economic principles and theories themselves can be self-fulfilling, shaping management practices and actually creating the behavior they predict.
Have we reached a tipping point? Is it too late to turn back? Maybe. Kathleen Voh’s research shows money has selfish and individualistic effects even with young children who have only a very crude understanding of money. Our organizations may be destined to have workforces full of mercenaries and bounty hunters. At the same time, there is plenty of evidence that people start out fundamentally selfless, with a natural inclination to help and cooperate. There may still be hope for curiosity but we need to start teaching our students, our employees and our future leaders different lessons. There is a compelling case to be made that we should replace our old practices and old mental models based on instrumental thinking with more effective practices based on new thinking. These new models tap more powerful motives like purpose, meaning, progress and belonging. There are plenty of writers and researchers advancing these ideas.
If we start teaching new lessons, in the future, maybe students won’t ask what’s on the test and employees won’t ask if what they are will count. Employees will do the work because they want to do good work and because their efforts are in the service of something greater than themselves. They know their work matters and their efforts are appreciated. The “something greater than themselves” doesn’t need to be grand…it can be as simple as getting a product out the door because they know a customer is depending on it. In the future employees may work hard because they don’t want to let their teammates down. In the future maybe we will design incentive systems that reward all of us instead of some of us, that unite us instead of divide us, where if we succeed, we all benefit. I know what you’re thinking; these ideas sound very utopian (and things that sound utopian are too good to be true and can’t work). I don’t blame you; I would think the same thing. Few would consider me a utopian, and if I am I’m a “reluctant utopian”, coming by it honestly. Solutions that reflect these ideas are based on solid theories, principles, and research. I’m not asking you to consider these ideas because I want a utopian workplace. I’m asking you to consider them because they work.
“Will this be on the test?” Whenever I’m asked this question, I always direct them to author John Green’s quote about “The Test.” I tell them smart students and citizens have this tattooed on their arm:
"The test will measure whether you are an informed, engaged, and productive citizen of the world, and it will take place in schools and bars and hospitals and dorm rooms and in places of worship. You will be tested on first dates, in job interviews, while watching football, and while scrolling through your Twitter feed. The test will judge your ability to think about things other than celebrity marriages, whether you’ll be easily persuaded by empty political rhetoric, and whether you’ll be able to place your life and your community in a broader context. The test will last your entire life, and it will be comprised of the millions of decisions that, when taken together, will make your life yours. And everything, everything, will be on it."
This is one of my favorite theories to pick on. I deal with this topic more thoroughly in my book on Performance Management but there are good role models of people who are rejecting this theory and many of the practices discussed in this article. For and example, see an article by Stefan Stern in The Guardian about Sébastien Bras the renowned French chef (https://www.theguardian.com/commentisfree/2017/sep/22/workplace-chef-michelin-stars-sebastien-bras?CMP=share_btn_tw).
You can also read what I wrote about this case and it’s implications here (https://www.linkedin.com/pulse/lessons-from-chef-scourge-agency-theory-alan-colquitt-ph-d-/).
It is also true that Sébastien Bras rejected “the game” after attaining a great deal of success playing the game. It is much harder to win if you reject how the game is played at the outset. I still think he is a hero.
Students and Instrumental Thinking
I have taught MBA’s and they may be the most instrumental thinkers of all. McCabe and Trevino’s research is frightening since these students will be running our companies one day and new research shows MBA CEO’s are less effective than CEO’s with other backgrounds. MBA CEOs tend to be more self-serving and short-term oriented. Maybe instrumental thinking has something to do with this? I have nothing against MBA’s. I simply wonder about how we are training them to manage and motivate their workforces, using ideas and theories that were created and perfected in the 19th and early 20th centuries. The world is different now and people are different; they need new theories, principles, and mental models to guide them. I think we are doing them a disservice by preparing them to lead in a world that is changing rapidly and we may be setting them up to struggle and fail.
Extrinsic Motivation Crowds Out Intrinsic Motivation.
This is a hotly debated topic. There is decades of research on this question, much of it done in the lab, under a wide range of conditions. This research shows extrinsic rewards can negatively affect intrinsic motivation, especially under the following conditions:
The task to be done is complex and interesting to begin with and especially when it requires creativity and innovation.
Incentives are explicit and material (versus implicit or symbolic—like verbal praise).
Rewards are expected (versus unexpected).
Rewards are seen as controlling or intrusive, with extensive monitoring.
The question for you is to what extent do these conditions exist in your organization? For how many employees is their work interesting (or interesting enough)? How many employees are doing work that requires creativity or innovation? Do employees “feel” the presence of incentives (a bonus or merit increase) hanging over them? To what extent is a “payoff” or the risk of failure on their mind as they do their work and interact with their boss? Do employees feel like their performance is being monitored? When I reflect on my 32 years of experience working in organizations, I think we can say “yes” frequently enough to these questions that we should be worried about what we’re doing to employees with our pay for performance and incentive practices. And, the more successful we are in introducing and institutionalizing these practices, the more noticeable they will be to employees in their day-to-day consciousness.
When Economists are Surprised.
I love the Gneezy and Rustichini daycare study because they were surprised by these findings. I love it when economists are surprised, when traditional economic principles don’t hold up. Another of my favorite examples of this are experiments with dynamic tolling in Miami and Minneapolis. I wrote about these in my PM book. To reduce traffic, these cities raised the toll price on the commuter lanes as these lanes were getting congested. Raise the price, demand goes down…simple economics. That’s not what happened. Congestion actually increased. I love science.
Mental Models are Stubborn
Mental models operate deep in the background and they are hard for our HR professionals and leaders to see. It is hard to see the glasses you are wearing to see the world just like it is hard for the fish to think about the water it swims in. If you want to see evidence of this, tell your HR executives or business leaders that you think your company should get rid of pay-for-performance. Look in their eyes. You may as well have asked them why they walk upright. They can’t conceive of an alternative. How else would you do it?
REFERENCES AND THINGS TO READ
Below are references referred to and cited in the article and some other things to read.
Heath, C. (1999). On the social psychology of agency relationships: Lay theories of motivation overemphasize extrinsic incentives. Organizational Behavior and Human Decision Processes, 78, 25-62.
Beer, M., & Katz, N. (2003). Do incentives work? The perceptions of a world-wide sample of senior executives. Human Resource Planning, 26, 3, 30-44.
McCabe, D. L., & Trevino, L. K. (1995). Cheating among business students: A challenge for business leaders and educators. Journal of Management Education, 19, 205-218.
McCabe, D. L., & Trevino, L. K. (1996). What we know about cheating in college, Change, 28, 29-33.
Niemiec, C. P., Ryan, R. M., & Deci, E. L. (2008). The path taken: Consequences of attaining intrinsic and extrinsic aspirations in post-college life. Journal of Research in Personality, 43, 291-306.
There have been many studies looking at the impact of extrinsic rewards on intrinsic motivation. Most are laboratory experiments. There have been 8 meta-analysis studies reviewing research on this question:
Bowles, S., & Polanía-Reyes, S. (2012). Economic incentives and social preferences:
Cameron, J., & Pierce, W. D. (1994). Reinforcement, reward, and intrinsic motivation: A meta-analysis. Review of Educational Research, 64, 363-423.
Cameron, J., Banko, K. M., & Pierce, W. D. (2001). Pervasive negative effects of rewards on intrinsic motivation: The myth continues. The Behavior Analyst, 24, 1-44.
Deci, E. L., Ryan, R. M., & Koestner, R. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychological Bulletin, 125, 627-668.
Rummel, A., & Feinberg, R. (1988). Cognitive evaluation theory: A meta-analytic review of the literature. Social Behavior and Personality, 16, 147-164.
Tang, S. H., & Hall, V. C. (1995). The over-justification effect: A meta-analysis. Applied Cognitive Psychology, 9, 365-404.
Wiebel, A., Rost, K., & Osterloh, M. (2009). Pay for performance in the public sector—benefits and (hidden) costs. Journal of Public Administration Research and Theory, 20, 2, 387-412.
Wiersma, U. J. (1992). The effects of extrinsic rewards in intrinsic motivation: A meta-analysis. Journal of Occupational and Organizational Psychology, 65, 101-114.
For more details of the work of Kathleen Voh’s and her colleagues on money priming, see:
Vohs, K. D., Mead, N. L., & Goode, M. R. (2006). The psychological consequences of money. Science. 314, 1154-1156.
Gasiorowska, A., Chaplin, L., Zaleskiewicz, T., Wygrab, S., & Vohs, K. (2015). Money cues increase agency and decrease prosociality among children: Early signs of market mode behavior. Psychological Science, 27, 331-344.
Vohs, K. D. (2015). Money priming can change people’s thoughts, feelings, motivations and behaviors: An update on 10 years of experiments. Journal of Experimental Psychology, 144, 73-85.
Burks, S., Carpenter, J., & Goette, L. (2006). Performance pay and the erosion of worker cooperation: Field experimental evidence. IZA Discussion Paper # 2013.
Bloomberg Business Week (2013). Michael Lewis on the next crisis. http://www.businessweek.com/articles/2013-09-12/michael-lewis-on-the-next-crisis
Gneezy, U. & Rustichini, A. (2000). A fine is a price. The Journal of Legal Studies, 29, 1-17.
Manzoni, J. F. (2008). On the folly of hoping for A, simply because you are trying to pay for A. Studies in Managerial and Financial Accounting, 18, 19-41.
Devoe, S. E., Pfeffer, J., & Lee, B. Y. (2013). Why does money make money more important? Survey and experimental evidence. Industrial Labor Relations Review, 66, 1078-1096.
Ferraro, F., Pfeffer, J., & Sutton, R. I. (2005). Economics language and assumptions: How theories can become self-fulfilling. Academy of Management Review, 30, 8-24.
For a “call to arms” to researchers to critically evaluate their theories (in this case in the wake of Enron and other corporate scandals), see:
Ghoshal, S. (2005). Bad management theories are destroying good management practices. Academy of Management Learning & Education, 4, 75-91
Here is a sample of people writing about these newer more “utopian” models and principles
Amabile, T., & Kramer, S. (2009). The progress principle: Using small wins to ignite joy, engagement and creativity at work. Boston: Harvard Business School Press.
Baumeister, R. F., & Leary, M. R. (1995). The need to belong: Desire for interpersonal attachments as a fundamental human motivation. Psychological Bulletin, 117, 497–529.
Dik, B. J., Byrne, Z. S, & Steger, M. F. (2013). Purpose and meaning in the workplace. New York: American Psychological Association.
Hurst, A. (2016). The purpose economy. Boise: Elevate Publishing.
Leider, R. J. (1997). The power of purpose: Creating meaning in your life and work. San Francisco: Berrett-Koehler.
Pink, D. H. (2009). Drive: The surprising truth about what motivates us. New York: Riverhead Books.
Rosso, B. D., Dekas, K. H., & Wrzesniewski, A. (2010). On the meaning of work: A theoretical integration and review. Research in Organizational Behavior, 30, 91-127.
Walton, G. M., Cohen, G. L., Cwir, D., & Spencer, S. J. (2012). Mere belonging: The power of social connections. Journal of Personality and Social Psychology, 102, 513-532.
For more information on the effectiveness of MBA CEOs, see the following:
Miller, D. & Xu, X. (2016). MBA CEOs, short-term management and performance. Journal of Business Ethics, 1-16.
Miller, D. & Xu, X. (2015). A fleeting glory: Self-serving behavior among celebrated MBA CEOs. Journal of Management Inquiry, 25, 286-300.
Mintzberg, H. (2017). MBAs as CEOs: Some troubling evidence. Blog Post, February. (http://www.mintzberg.org/blog/mbasasceos).
Schachter, H. (2017). Studies show CEOs with MBAs more likely to fail. The Globe and Mail, March 31, 2017 (https://www.theglobeandmail.com/report-on-business/careers/management/studies-show-ceos-with-mbas-more-likely-to-fail/article34504662/).
For more information about our natural instincts for helping versus selfishness, see:
Rand, D.G., Greene, J.D., & Nowak, M.A. (2012). Spontaneous giving and calculated greed. Nature 489, 427-430.
Rand, D.G. (2016). Cooperation, fast and slow: Meta-analytic evidence for a theory of social heuristics and self-interested deliberation. Psychological Science, 27, 1192-1206.