I want to talk a little bit today about labor work.
When we think about how people work, the naive we have is that people are like rats in a maze — that all people care about money, and the moment we give them money, we can direct them to work way, we can direct them to work another way. This is why give bonuses to bankers and pay in all kinds of ways. And we really have this incredibly simplistic of why people work, and what the labor market looks like.
At same time, if you think about it, there’s all of strange behaviors in the world around us. Think about 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 frostbite and having difficulty walking, difficulty breathing — cold, challenging circumstances. And if people were just trying be happy, the moment they would get to the top, they would say, “This was a terrible mistake. I’ll do it again.”
(Laughter)
“Instead, let me sit on beach somewhere drinking mojitos.” But instead, people go down, and after they recover, they up again. And if you think about mountain climbing as an example, suggests all kinds of things. It suggests that we about reaching the end, a peak. It suggests that care about the 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. This was one of my students from few years earlier, and he came one day back to campus. And he told me the following story: said that for more than two weeks, he was working on a PowerPoint presentation. was working in a big bank, and this was in preparation for a merger and acquisition. he was working very hard on this presentation — graphs, tables, information. He stayed late at night day. And the day before it was due, he his PowerPoint presentation to his boss, and his boss wrote back and said, “Nice presentation, but the merger is canceled.” And the was deeply depressed. Now at the moment when he working, he was actually quite happy. Every night he was his work, he was staying late, he was perfecting this PowerPoint presentation. But that nobody would ever watch it made him quite depressed.
So started thinking about how do we experiment with this idea the fruits of our labor. And to start with, created a little experiment in which we gave people Legos, and we asked them to build with Legos. for some people, we gave them Legos and we said, “Hey, you like to build this Bionicle for three dollars? We’ll pay you three dollars it.” And people said yes, and they built with these Legos. And they 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, and when they finished, asked them, “Do you want to build another one?” for $2.40, $2.10, and so on, at some point people said, “No more. It’s not worth it me.” This was what we called the meaningful condition. People built Bionicle after another. After they finished every one of them, we put them under table. And we told them that at the end of the experiment, we will take all these Bionicles, will disassemble them, we will put 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 condition we called Sisyphic condition. And if you remember the story about Sisyphus, Sisyphus was punished by the gods to push same rock up a hill, and when he almost got to the end, the rock would over, and he would have to start again. And you can think about as the essence of doing futile work. You can that if he pushed the rock on different hills, least he would have some sense of progress. Also, if you at prison movies, sometimes the way that the guards torture the prisoners is to get to dig a hole, and when the prisoner is finished, they ask him to fill the 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 the second condition of this experiment, that’s exactly what 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 $2.70?” And if they said yes, we gave them a new one, and as they building it, we took apart the one that they just finished. 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 the one that they built and we broke. So this was an endless cycle of building, and us destroying in front of their eyes.
Now happens when you compare these two conditions? The first thing that happened was that built many more Bionicles — eleven in the meaningful condition, versus seven in Sisyphus condition. And by the way, we should point that this was not big meaning. People were not curing cancer or building bridges. People were building for a few cents. And not only that, everybody that the Bionicles would be destroyed quite soon. So was not a real opportunity for big meaning. But the small meaning made a difference.
Now we had version of this experiment. In this other version of experiment, we didn’t put people in this situation, we just described them the situation, much as I am describing to now, and we asked them to predict what the would be. What happened? People predicted the right direction but not right magnitude. People who were just given the description of the said that in the meaningful condition, people would probably build one more Bionicle. So 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 looked at. If you think it, there are some people who love Legos, and some people who don’t. And you speculate that the people who love Legos would build more Legos, even less money, because after all, they get more internal joy from it. And people who love Legos less would build less Legos the enjoyment that they derive from it is lower. that’s actually what we found in the meaningful condition. was a very nice correlation between the love of and the amount of Legos people built.
What happened in the Sisyphic condition? that condition, the correlation was zero — there was no relationship between the love Legos, and how much people built, which suggests to me that with this manipulation of things in front of people’s eyes, we basically crushed any joy that they could get of this activity. We basically eliminated it.
Soon after I finished running this experiment, I went to talk a big software company in Seattle. I can’t tell you they were, but they were a big company in Seattle. This was a group within the software company was put in a different building, and they asked them to innovate, and create the big product for this company. And the week before I up, the CEO of this big software company went that group, 200 engineers, and canceled the project. And I stood there in front of 200 the most depressed people I’ve ever talked to. And I described to them of these Lego experiments, and they said they felt like they just been through that experiment. And I asked them, I said, “How many you now show up to work later than you to?” And everybody raised their hand. I 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 your expense reports?” And they didn’t raise their hands, but they took me to dinner and showed me what they could do with expense reports. And then I asked them, said, “What could the CEO have done to make you not as depressed?” And they came up with kinds of ideas.
They said the CEO could have asked them to to the whole company about their journey over the last two years and what they to do. He could have asked them to think about which aspect of their technology fit with other parts of the organization. He could have asked them to build some next-generation prototypes, and how they would work. But the thing 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 the essence of meaning is unimportant, he [wouldn’t] care. And he would say, “At the I directed you in this way, and now that I’m directing you in this way, everything 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 people to more about what they’re doing.
The next experiment was slightly different. took a sheet of paper with random letters, and asked people to find pairs of letters that were identical to each other. That was the task. People did the first sheet, then asked if they wanted to do another for a little less money, the sheet for a little bit less, and so on so forth. And we had three conditions. In the condition, people wrote their name on the sheet, found all pairs of letters, gave it to the experimenter, the experimenter look at it, scan it from top to bottom, “Uh huh,” and put it on the pile next to them. In the condition, people did not write their name on it. The experimenter looked 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. In the third condition, experimenter got the sheet of paper, and put it into a shredder.
(Laughter)
What happened in those three conditions?
In plot I’m showing you at what pay rate people stopped. So low mean that people worked harder. They worked for much longer. In acknowledged condition, people worked all the way down to 15 cents. 15 cents per page, they basically stopped these efforts. In shredder condition, it was twice as much — 30 per sheet.
And this is basically the result we had before. shred people’s efforts, output — you get them not be as happy with what they’re doing. But I should out, by the way, that in the shredder condition, people could have cheated. They have done not so good work, because they realized people were just shredding it. So maybe the first 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, the shredder condition, people could have submitted more work gotten more money, and put less effort into it. But what about ignored condition? Would the ignored condition be more like the acknowledged or like the shredder, or somewhere in the middle? It turns out it almost like the shredder.
Now there’s good news and news here. The bad news is that ignoring the of people is almost as bad as shredding their in front of their eyes. Ignoring gets you a whole way out there. The good news that by simply looking at something that somebody has done, scanning and saying “Uh huh,” that seems to be quite sufficient to dramatically improve people’s motivations. So the good is that adding motivation doesn’t seem to be so difficult. The bad news is that eliminating seems to be incredibly easy, and if we don’t think about it carefully, we might overdo it. this is all in terms of negative motivation, or eliminating negative motivation.
The next part I want to you is something about positive motivation. So there is 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 about you, but time I assemble one of those, it takes me much longer, it’s more effortful, it’s much more confusing, I put things 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. So when started cake mixes in the ’40s, they would take this powder and they put it in a box, and they would ask housewives to pour it in, stir some water in it, mix it, it in the oven, and — voila — you cake. But it turns out they were very unpopular. People did not them, and they thought about all kinds of reasons for that. Maybe taste was not good? No, the taste was great. What they figured out was that was not enough effort involved. It was so easy that nobody could cake to their guests and say, “Here is my cake.” No, it 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 the eggs and the milk out of powder.
(Laughter)
Now you had to break the eggs and add them, you had to measure the milk add it, mixing it. Now it was your cake. Now everything 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 degree.
So how do we look at this question experimentally? asked people to build some origami. We gave them instructions on how to create origami, and we them a sheet of paper. And these were all novices, and they built that was really quite ugly — nothing like a frog or a crane. But then told them, “Look, this origami really belongs to us. You for us, but I’ll tell you what, we’ll sell it to you. How much you want to pay for it?” And we measured much they were willing to pay for it. And we had two types of people: We had people who built it, and the people who did not build it, and just at it as external observers. And what we found was that the builders thought that these were beautiful of origami —
(Laughter)
and they were willing to pay five more for them than the people who just evaluated them externally. Now could say — if you were a builder, do you think [you’d say], “Oh, love this origami, but I know that nobody else would it?” Or “I love this origami, and everybody else will love it well?” Which one of those two is correct? Turns out the not only loved the origami more, they thought that everybody would see world in their view. They thought everybody else would it more as well.
In the next version, we tried to do the effect. We tried to make it more difficult. So for some people, we the same task. For some people, we made it harder by hiding the instructions. At 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 thing — loved it more, evaluators loved it less. When you at the hard instructions, the effect was larger. Why? now the builders loved it even more.
(Laughter)
They put this 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 asked you, “How much you sell your kids for?” Your memories and associations and so on. Most people would for a lot, a lot of money.
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On days.
(Laughter)
But imagine this was slightly different. Imagine you did not have your kids. And one day you 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 about to leave, the parents said, “Hey, by the way, just before you leave, you’re interested, they’re for sale.”
(Laughter)
How much would you pay them now? Most people say not that much. And is because our kids are so valuable, not just because who they are, but because of us, because they are so connected to us, and of the time and connection. By the way, if you think IKEA instructions are not good, what about instructions that come with kids, those are really tough.
(Laughter)
By the way, these are my kids, which, course, are wonderful and so 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 say one last comment. you think about Adam Smith 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 does all 12 steps, 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 the reason for the Industrial and efficiency. Karl Marx, on the other hand, said the alienation of labor is incredibly important in how people think about the connection to what they doing. And if you do all 12 steps, you care about the pin. if you do one step every time, maybe you don’t care as much.
I think that the Industrial Revolution, Adam Smith was more correct than Karl Marx. But the reality is we’ve switched, and now we’re in the knowledge economy. You can yourself, what happens in a knowledge economy? Is efficiency still more important meaning? I think the answer is no. I think that as we move situations in which people have to decide on their own about how much effort, attention, caring, how connected feel to it, are they thinking about labor on way to work, and in the shower and so on, all a sudden Marx has more things to say to us. So when we think labor, we usually think about motivation and payment as the same thing, but the reality that we should probably add all kinds of things 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, and how do we do in our workplace, and for the employees — I we could get people to be both more productive happier.
Thank you very much.