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