Mo' Money. Mo' Problems.

Just finishing off Daniel Pink’s great book: “A Whole New Mind: Why Right Brainers Will Rule The World“, when this very interesting video/ commentary popped up via my best of youtube podcast. In essence, Pink (the commentator), discusses recent research coming out of MIT, that throughs into question our entire idea of compensation, reward & motivation.

In short? There’s a tipping point where, after-which, higher reward has a negative impact on performance. Seem’s Biggie was right: mo’ money is mo’ problems.

The research, in summary, suggests the following.

For basic, manual- based, rudimentary activities, more reward does equate to better performance. In order for this to be the case, there must be a clear if- then activity- reward correlation, eg. if I produce more widgets, I will make more money.

OK. Thus far, makes sense.

Where the research gets controversial, but no less valid, is its assertion that once any type of cognitive skill is required, as we would see in any knowledge- based work, greater reward leads to a decrease in performance. Yes, that’s decrease.

Pink, based on the MIT research, suggests that enough financial reward needs to be offered to skilled (knowledge) workers to: “… get it [the issue of money] off the table.” In other words, pay skilled workers enough so as to satisfy their basic Maslowian needs (eg. food, water, shelter), but once satisfied, remove it as a key motivator.

Instead, according to Pink, three factors must exist to get optimal performance from knowledge workers:

1, autonomy– most employees, in the knowledge realm, want to innovate. Extrinsically motivating them to do so, eg. via monetary reward, de– motivates them.

“You probably want to do something interesting. Let me just get out of your way.“~ Pink

Instead, simply provide them the opportunity (to do something innovative), and then, get out of the way. Pink references Australian based Atlassian, as an example of just how to do this, by providing paid- formal & structured time to freely innovate. Google too has been noted for similar activities. More and more organisations are loosening confines, such as access to social media sites while at work, choosing instead to be output- oriented in KPIs, and collaborative with its employees, vendors and partners. They are right to do so.

2, mastery– humans are driven to explore and innovate, they want to master tasks, with no direct reward as the motivator. Why do I play the guitar, blog, read (constantly it seems)? There is no (direct) monetary reward. Further Pink argues these activities actually take our time away from activities that do have a direct monetary reward. After-all, how can I produce a widget if I am practicing my C Major Cord?

3, purpose– which is closely related to mastery, suggests that if we are not receiving monetary reward for many activities that knowledge workers partake in, eg. blogs, twitter, Wikipedia, then why do we do them? The research explains it is for a sense of purpose. We engage in these activities for a higher level of spiritual reward. It is here, that motivation, and associated engagement and work ethic, is at its most successful. There is no extrinsic motivators that must be maintained to continue the behavior.

Consider for a moment the following. The customer experience is better than employee experience. This is a mistake. Equal focus and support must be provided to both. They are intrinsically linked. But, it’s easier to get a new BlackBerry holster via eBay, then via an internal organisational procurement system. It’s easier to transfer funds via internet banking then submit an internal expense claim. It’s easier to work from home, with regards to the necessary access to the internet, then at the office. All and in all, it’s easier to be a customer than an employee. Is it little wonder there is so little employee loyalty? Loyalty is based on trust. Organisations don’t trust their staff.

Organisations that understand and accept the changing dynamics of the workforce will get more out of their staff, and do so in a more collaborative and ethical format. And the MIT research, and Pink’s work, are a great first step in how.