Apparently, there is a misalignment with what business practices and science has found.
Rewards and incentives are supposed to improve the quality of work of an employee, but it removes creativity and innovation. This means that the punishment/reward system only makes sense for simple, mindless tasks. A good company cannot run on mindless tasks.
In business, it is common practice to have a system build on punishment and rewards. Incentives are supposed to “sharpen thinking and accelerate creativity, but it does just the opposite” (Pink). In most complex tasks, incentives either don’t work or creates the opposite of the desired effect. It is in the company’s interests for employees to be innovative and creative when it comes to problem solving, but when given an incentive to get a task done faster, it actually restrains the innovative thought process.
“Rewards by their very nature narrow the focus, concentrate the mind” (Pink). This stifles the productivity of employees, making it harder for them to think outside the box when they are focused on the reward.
Karl Duncker‘s study, The Candle Problem, found that when given a complicated problem that requires a creative and innovative solution, people who were offered an incentive to solve the problem did so more slowly than people who were simply given the problem.
The big problems in business don’t only have one solution, and those solutions are certainly not discovered through simple thinking. When we are in a hurry, there is less careful thought going into our problem solving. When given tasks that require cognitive functions, people given bonuses, incentives, etc. work slower and less effectively.
Essentially, rewards help positive results when employees are doing mindless tasks. Rewards will hinder overall performance when employees are given tasks that require problem solving and thought.
- Autonomy – the urge to direct our own lives
- Mastery – the desire to get better and better at something that matters
- Purpose – the yearning to do what we do in the service of something larger than ourselves
Pink calls these the building blocks of a new business model. He states that “self direction works better,” and advocates for companies to pay an employee fairly and adequately, then let that employee go do his or her work. Pink tells us of a company that doesn’t require their employees to be in the office at certain times–or at all. The company assigns an employee a task, and only cares that the task gets done. “Across the board” productivity went up and the results were positive. Obviously, that company is doing something right. And it makes sense to the employees, and is reaching them on another level, aside from simply a “carrot and stick” perspective. Read more about interesting and effective ways some companies engage workers and produce great results here at Pink’s website.
Again, if you have time, please watch it at http://www.ted.com/talks/dan_pink_on_motivation.html