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The wrong incentives and workplace motivation

(Note: I have an extra copy of Your Turn by Seth Godin. If you want it, just email me at jeremeylduvall – gmail.com with your address, and I’ll send it your way!)

In Primed to Perform, authors Neel Doshi and Lindsay McGregor cover motivation in the workplace. What kinds of incentives and situations promote the right kind of motivations? Here are three ways that indirect motivators (emotional pressure, economic pressure, and inertia) can negatively impact performance.

The distraction effect explains how our focus on the stakes of a situation can ruin our performance. This applies to creative, problem-solving tasks.

This is illustrated through two tasks:

  1. Students have to press two keys as quickly as possible. Group A is told if they do well they’ll earn up to $300. Group B is told they would earn up to $30.
  2. Students have to solve a simple math problem. Same group setup with a max of $300 offered to one and a max of $30 offered to the other.

In task #1, Dan Ariely (the author of the study) found that the higher reward increased performance much as you might expect. Pressing keys on a computer is not a creative task.

In task #2, the higher paying group actually did worse than the lower paying group.

The cancellation effect says that your motivation to do the right thing can be cancelled out. Put short-term pressure on colleagues, and their willingness go the extra mile for customers could suffer.

When motivation is low, the wrong kinds of incentives can produce trade-off situations. The authors lay out three examples:

  1. Quality and quantity
  2. Individuality and teamwork
  3. Near-term and long-term results

The cobra effect says that your solution could actually make the problem worse. Every job, every metric creates an opportunity for maladaptive performance. When motivation is low, team members look for the shortest path to ease the pressure, even if that doesn’t serve the end goal.

The name comes from the 1800’s when India was still under the British government. The British set out to lower the number of cobras in the city by paying a bounty for dead cobras. Cobra farms also popped up outside of town breeding cobras they could then kill for bounty.

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