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