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