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