I want to a little bit today about labor and work.
When we think about people work, the naive intuition we have is that people are like in a maze — that all people care about is money, and the we give them money, we can direct them to work one way, we can direct them work another way. This is why we give bonuses to bankers and pay all kinds of ways. And we really have this incredibly simplistic view why people work, and what the labor market looks like.
At same time, if you think about it, there’s all of strange behaviors in the world around us. Think about something like mountaineering mountain climbing. If you read books of people who climb mountains, difficult mountains, you think that those books are full of moments joy and happiness? No, they are full of misery. fact, it’s all about frostbite and having difficulty walking, difficulty breathing — cold, challenging circumstances. And if people were trying to be happy, the moment they would get to top, they would say, “This was a terrible mistake. I’ll never do it again.”
(Laughter)
“Instead, me sit on a beach somewhere drinking mojitos.” But instead, go down, and after they recover, they go up again. if you think about mountain climbing as an example, it all kinds of things. It suggests that we care about the end, a peak. It suggests that we care about fight, about the challenge. It suggests that there’s all of other things that motivate us to work or behave in kinds of ways.
And for me personally, I started thinking about after a student came to visit me. This was one of my students from a years earlier, and he came one day back to campus. And he me the following story: He said that for more than two weeks, he was working on PowerPoint presentation. He was working in a big bank, and this was in for a merger and acquisition. And he was working hard on this presentation — graphs, tables, information. He late at night every day. And the day before it was due, he sent PowerPoint presentation to his boss, and his boss wrote him back said, “Nice presentation, but the merger is canceled.” And guy was deeply depressed. Now at the moment when he working, he was actually quite happy. Every night he was his work, he was staying late, he was perfecting this PowerPoint presentation. But knowing that nobody would ever it made him quite depressed.
So I started thinking about how do we experiment with idea of the fruits of our labor. And to with, we created a little experiment in which we people Legos, and we asked them to build with Legos. And for some people, gave them Legos and we said, “Hey, would you like build this Bionicle for three dollars? We’ll pay you three for it.” And people said yes, and they built with Legos. And when they finished, we took it, we it under the table, and we said, “Would you to build another one, this time for $2.70?” If they said yes, we gave them another one, when they finished, we asked them, “Do you want build another one?” for $2.40, $2.10, and so on, until some point people said, “No more. It’s not worth it for me.” This was we called the meaningful condition. People built one Bionicle after another. After they finished every one them, we put them under the table. And we them that at the end of the experiment, we will take all Bionicles, we will disassemble them, we will put them back in the boxes, we will use it for the next participant.
There was another condition. This other condition was inspired David, my student. And this other condition we called the Sisyphic condition. if you remember the story about Sisyphus, Sisyphus was by the gods to push the same rock up a hill, when he almost got to the end, the rock would roll over, and he would have to again. And you can think about this as the essence of futile work. You can imagine that if he pushed rock on different hills, at least he would have some sense of progress. Also, if you look at movies, sometimes the way that the guards torture the is to get them to dig a hole, and the prisoner is finished, they ask him to fill the hole back up and dig again. There’s something about this cyclical version of doing something over and over and over seems to be particularly demotivating.
So in the second condition of this experiment, that’s what we did. We asked people, “Would you like build one Bionicle for three dollars?” And if they said yes, built it. Then we asked them, “Do you want build another one for $2.70?” And if they said yes, we gave them a new one, and as were building it, we took apart the one that they finished. And when they finished that, we said, “Would you like to another one, this time for 30 cents less?” And they said yes, we gave them the one that they and we broke. So this was an endless cycle of them building, and us destroying in of their eyes.
Now what happens when you compare these two conditions? first thing that happened was that people built many more — eleven in the meaningful condition, versus seven in Sisyphus condition. And by the way, we should point out that this was big meaning. People were not curing cancer or building bridges. People building Bionicles for a few cents. And not only that, everybody that the Bionicles would be destroyed quite soon. So there was not a real opportunity for big meaning. even the small meaning made a difference.
Now we had another of this experiment. In this other version of the experiment, we didn’t put in this situation, we just described to them the situation, much as I describing to you now, and we asked them to predict what the result would be. happened? People predicted the right direction but not the right magnitude. who were just given the description of the experiment said that in the meaningful condition, people probably build one more Bionicle. So people understand that is important, they just don’t understand the magnitude of the importance, the extent to it’s important.
There was one other piece of data we at. If you think about it, there are some who love Legos, and some people who don’t. And you speculate that the people who love Legos would build more Legos, even for less money, after all, they get more internal joy from it. And people who love Legos less would build less Legos because the enjoyment that they from it is lower. And that’s actually what we found in the meaningful condition. There was a nice correlation between the love of Legos and the amount Legos people built.
What happened in the Sisyphic condition? In that condition, the correlation was — there was no relationship between the love of Legos, and much people built, which suggests to me that with manipulation of breaking things in front of people’s eyes, we basically crushed any joy that they get out of this activity. We basically eliminated it.
Soon after I finished running this experiment, I to talk to a big software company in Seattle. I can’t tell you who were, but they were a big company in Seattle. This was a within the software company that was put in a different building, they asked them to innovate, and create the next big product this company. And the week before I showed up, the CEO of this big software went to that group, 200 engineers, and canceled the project. I stood there in front of 200 of the depressed people I’ve ever talked to. And I described to some of these Lego experiments, and they said they like they had just been through that experiment. And asked them, I said, “How many of you now show up to work later than used to?” And everybody raised their hand. I said, “How many of you now go home earlier than you to?” Everybody raised their hand. I asked them, “How many of you now add not-so-kosher things to expense reports?” And they didn’t raise their hands, but they me out to dinner and showed me what they do with expense reports. And then I asked them, said, “What could the CEO have done to make not as depressed?” And they came up with all kinds of ideas.
They the CEO could have asked them to present to the whole about their journey over the last two years and what decided to do. He could have asked them to about which aspect of their technology could fit with other parts of the organization. He could have them to build some next-generation prototypes, and see how they would work. But the thing is that one of those would require some effort and motivation. I think the CEO basically did not understand the of meaning. If the CEO, just like our participants, thought the essence of meaning is unimportant, then [wouldn’t] care. And he would say, “At the moment I directed you in way, and now that I’m directing you in this way, everything will okay.” But if you understood how important meaning is, you would figure out that it’s actually important to some time, energy and effort in getting people to care more about what they’re doing.
The experiment was slightly different. We took a sheet of paper with letters, and we asked people to find pairs of letters that identical next to each other. That was the task. People did the first sheet, then asked if they wanted to do another for a little money, the next sheet for a little bit less, and so and so forth. And we had three conditions. In the first condition, people their name on the sheet, found all the pairs of letters, it to the experimenter, the experimenter would look at it, scan it from top bottom, say “Uh huh,” and put it on the pile next to them. In the second condition, did not write their name on it. The experimenter looked it, took the sheet of paper, did not look it, did not scan it, and simply put it the pile of pages. So you take a piece, just put it on the side. In the third condition, experimenter got the sheet of paper, and put it into a shredder.
(Laughter)
What happened in those three conditions?
In this plot I’m showing you what pay rate people stopped. So low numbers mean that people worked harder. They worked for longer. In the acknowledged condition, people worked all the down to 15 cents. At 15 cents per page, basically stopped these efforts. In the shredder condition, it was twice as much — 30 per sheet.
And this is basically the result we before. You shred people’s efforts, output — you get not to be as happy with what they’re doing. But I should point out, by way, that in the shredder condition, people could have cheated. They have done not so good work, because they realized people just shredding it. So maybe the first sheet you’d do work, but then you see nobody is really testing it, so you would do more more and more. So in fact, in the shredder condition, could have submitted more work and gotten more money, and less effort into it. But what about the ignored condition? the ignored condition be more like the acknowledged or more like shredder, or somewhere in the middle? It turns out was almost like the shredder.
Now there’s good news bad news here. The bad news is that ignoring the of people is almost as bad as shredding their in front of their eyes. Ignoring gets you a whole way out there. The news is that by simply looking at something that has done, scanning it and saying “Uh huh,” that to be quite sufficient to dramatically improve people’s motivations. So good news is that adding motivation doesn’t seem to so difficult. The bad news is that eliminating motivations seems to incredibly easy, and if we don’t think about it carefully, might overdo it. So this is all in terms of motivation, or eliminating negative motivation.
The next part I want to show you is something positive motivation. So there is a store in the U.S. called IKEA. And is a store with kind of okay furniture that takes a time to assemble.
(Laughter)
I don’t know about you, but every I assemble one of those, it takes me much longer, it’s much more effortful, it’s much confusing, I put things in the wrong way — I can’t say I enjoy those pieces. can’t say I enjoy the process. But when I finish it, seem to like those IKEA pieces of furniture more than like other ones.
(Laughter)
And there’s an old story about cake mixes. So when they started cake mixes the ’40s, they would take this powder and they would put it a box, and they would ask housewives to basically pour it in, stir some water it, mix it, put it in the oven, and — voila — you had cake. But it turns they were very unpopular. People did not want them, and they about all kinds of reasons for that. Maybe the taste not good? No, the taste was great. What they figured out that there was not enough effort involved. It was so easy that nobody serve cake to their guests and say, “Here is cake.” No, it was somebody else’s cake, as if you bought it in the store. It didn’t feel like your own. So what did they do? They took the eggs the milk out of the powder.
(Laughter)
Now you had to break the eggs and add them, had to measure the milk and add it, mixing it. Now it was your cake. Now was fine.
(Laughter)
(Applause)
Now, I think a little bit like the IKEA effect, by people to work harder, they actually got them to what they’re doing to a higher degree.
So how do we look at this question experimentally? We people to build some origami. We gave them instructions on how to create origami, and gave them a sheet of paper. And these were all novices, and they built something was really quite ugly — nothing like a frog or a crane. But we told them, “Look, this origami really belongs to us. You for us, but I’ll tell you what, we’ll sell to you. How much do you want to pay it?” And we measured how much they were willing to pay it. And we had two types of people: We the people who built it, and the people who did not build it, and just looked at as external observers. And what we found was that builders thought that these were beautiful pieces of origami —
(Laughter)
and were willing to pay five times more for them than the people just evaluated them externally. Now you could say — you were a builder, do you think [you’d say], “Oh, I love this origami, but I know nobody else would love it?” Or “I love this origami, and everybody else will love it well?” Which one of those two is correct? Turns out the builders not only the origami more, they thought that everybody would see the world their view. They thought everybody else would love it more as well.
In the next version, we tried do the IKEA effect. We tried to make it more difficult. So for people, we gave the same task. For some people, we made it harder by hiding the instructions. the top of the sheet, we had little diagrams of you fold origami. For some people, we just eliminated that. So now was tougher. What happened? Well in an objective way, the origami was uglier, it was more difficult. Now when we looked at the easy origami, we saw the same — builders loved it more, evaluators loved it less. you looked at the hard instructions, the effect was larger. Why? Because the builders loved it even more.
(Laughter)
They put all this extra effort it. And evaluators? They loved it even less. Because in reality, it was even uglier than first version.
(Laughter)
Of course, this tells you something about how we evaluate things.
Now think about kids. I asked you, “How much would you sell your kids for?” Your memories and associations so on. Most people would say for a lot, lot of money.
(Laughter)
On good days.
(Laughter)
But this was slightly different. Imagine if you did not have your kids. And one day you went to park and you met some kids. They were just your kids, and you played with them for a few hours, and you were about to leave, the parents said, “Hey, by the way, just before leave, if you’re interested, they’re for sale.”
(Laughter)
How much you pay for them now? Most people say not that much. this is because our kids are so valuable, not just because of they are, but because of us, because they are so to us, and because of the time and connection. By the way, you think IKEA instructions are not good, what about the instructions that come with kids, those are tough.
(Laughter)
By the way, these are my kids, which, of course, are wonderful and so on. comes to tell you one more thing, which is, much our builders, when they look at the creature of creation, we don’t see that other people don’t see things way.
Let me say one last comment. If you think about Smith versus Karl Marx, Adam Smith had a very important notion of efficiency. gave an example of a pin factory. He said have 12 different steps, and if one person does 12 steps, production is very low. But if you get one to do step one, and one person to do step two and step three and so on, production increase tremendously. And indeed, this is a great example, the reason for the Industrial Revolution and efficiency. Karl Marx, the other hand, said that the alienation of labor incredibly important in how people think about the connection to what they are doing. And if do all 12 steps, you care about the pin. But if you do step every time, maybe you don’t care as much.
I think that in Industrial Revolution, Adam Smith was more correct than Karl Marx. But reality is that we’ve switched, and now we’re in the knowledge economy. You ask yourself, what happens in a knowledge economy? Is efficiency still more than meaning? I think the answer is no. I think that we move to situations in which people have to on their own about how much effort, attention, caring, how connected they feel to it, are they thinking labor on the way to work, and in the shower and so on, all of a sudden Marx more things to say to us. So when we think about labor, usually think about motivation and payment as the same thing, but the reality is that should probably add all kinds of things to it — meaning, creation, challenges, ownership, identity, pride, etc.
The news is that if we added all of those components and thought about them — how we create our own meaning, pride, motivation, and how we do it in our workplace, and for the — I think we could get people to be both more productive happier.
Thank you very much.