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