I want to a little bit today about labor and work.
When we think about how people work, the intuition we have is that people are like rats a maze — that all people care about is money, the moment we give them money, we can direct them work one way, we can direct them to work way. This is why we give bonuses to bankers pay in all kinds of ways. And we really this incredibly simplistic view of why people work, and what labor market looks like.
At the same time, if think about it, there’s all kinds of strange behaviors in the around us. Think about something like mountaineering and mountain climbing. If you read books of people climb mountains, difficult 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 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, would say, “This was a terrible mistake. I’ll never do again.”
(Laughter)
“Instead, let me sit on a beach somewhere drinking mojitos.” But instead, people go down, and they recover, they go up again. And if you think mountain climbing as an example, it suggests all kinds of things. It that we care about reaching the end, a peak. suggests that we care about the fight, about the challenge. It suggests that there’s all kinds of things that motivate us to work or behave in kinds of ways.
And for me personally, I started thinking about this after student came to visit me. This was one of students from a few years earlier, and he came one day back campus. And he told me the following story: He that for more than two weeks, he was working on 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 stayed late night every day. And the day before it was due, sent his PowerPoint presentation to his boss, and his wrote him back and said, “Nice presentation, but the is canceled.” And the guy was deeply depressed. Now the moment when he was working, he was actually quite happy. Every night was enjoying his work, he was staying late, he perfecting this PowerPoint presentation. But knowing that nobody would ever it made him quite depressed.
So I started thinking about how do experiment with this idea of the fruits of our labor. And to start with, we created little experiment in which we gave people Legos, and we asked them to build with Legos. And some people, we gave them Legos and we said, “Hey, you like to build this Bionicle for three dollars? We’ll pay you dollars for it.” And people said yes, and they built with Legos. And when they finished, we took it, we put under the table, and we said, “Would you like build another one, this time for $2.70?” If they yes, we gave them another one, and when they finished, asked them, “Do you want to build another one?” $2.40, $2.10, and so on, until at some point said, “No more. It’s not worth it for me.” This was what we called the condition. People built one Bionicle after another. After they every one of them, we put them under the table. And we told them that at end of the experiment, we will take all these Bionicles, we will them, we will put them back in the boxes, and we will use it for the participant.
There was another condition. This other condition was by David, my student. And this other condition we called the condition. And if you remember the story about Sisyphus, Sisyphus was by the gods to push the same rock up a hill, when he almost got to the end, the rock roll over, and he would have to start again. And you can think about as the essence of doing futile work. You can imagine if he pushed the rock on different hills, at least he would some sense 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 prisoner is finished, they ask him to fill the hole back up and dig again. There’s something about this cyclical version of something over and over and over that seems to be demotivating.
So in the second condition of this experiment, that’s what we did. We asked people, “Would you like to build one Bionicle for dollars?” And if they said yes, they built it. Then we asked them, “Do want 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, we said, “Would you like 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 an endless cycle of building, and us destroying in front of their eyes.
Now what when you compare these two conditions? The first thing that was that people built many more 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 Bionicles for a few cents. And not only that, everybody knew the Bionicles would be destroyed quite soon. So there not a real opportunity for big meaning. But even small meaning made a difference.
Now we had another version this experiment. In this other version of the experiment, didn’t put people in this situation, we just described to them the situation, as I am describing to you now, and we them to predict what the result would be. What happened? predicted the right direction but not the right magnitude. People were just given the description of the experiment said that in the meaningful condition, people would build one more Bionicle. So people understand that meaning is important, just don’t understand the magnitude of the importance, the extent 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 people who don’t. And you would speculate that the people who Legos 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 less because 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 Legos and the of Legos people built.
What happened in the Sisyphic condition? In that condition, the correlation zero — 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. We basically eliminated it.
Soon after I running this experiment, I went to talk to a big software company in Seattle. I can’t tell who they were, but they were a big company Seattle. This was a group within the software company was put in a different building, and they asked them to innovate, create the next big product for this company. And week before I showed up, the CEO of this big software went to that group, 200 engineers, and canceled the project. And I stood there front of 200 of the most depressed people I’ve talked to. And I described to them some of Lego experiments, and they said they felt like they had just been through experiment. And I asked them, I said, “How many of you show 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 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. 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 asked them to present to the whole company about their over the last two years and what they decided to do. could have asked them to think about which aspect of technology could fit with other parts of the organization. He could have asked to build some next-generation prototypes, and see how they work. But the thing is that any one of those would require some effort and motivation. And 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 he would say, “At the moment directed you in this way, and now that I’m directing you in this way, everything will okay.” But if you understood how important meaning is, you would figure out that it’s actually important to some time, energy and effort in getting people to care about what they’re doing.
The next experiment was slightly different. We a sheet of paper with random letters, and we people to find pairs of letters that were identical to each other. That was the task. People did the first sheet, then we asked they wanted to do another for a little less money, the next sheet for a little less, and so on and so forth. And we three conditions. In the first condition, people wrote their name 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 it on the pile next to them. In the condition, people did not write their name on it. The experimenter looked at it, took sheet of paper, did not look at it, did not it, and simply put it on the pile of pages. So you take a piece, just put it on the side. In the third condition, the got the sheet of paper, and put it directly into a shredder.
(Laughter)
What happened in three conditions?
In this plot I’m showing you at what pay rate 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 twice as much — 30 cents per sheet.
And this is the result we had before. You 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 have cheated. They could have done not so good work, because they people were just shredding it. So maybe the first sheet you’d good work, but then you see nobody is 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 effort into it. But what about the ignored condition? Would the ignored condition more like the acknowledged or more like the shredder, or in the middle? It turns out it was almost like the shredder.
Now there’s news and bad news here. The bad news is that ignoring performance of people is almost as bad as shredding their effort front of their eyes. Ignoring gets you a whole way there. The good news is that by simply looking something that somebody 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 so difficult. The bad news is that eliminating motivations to be incredibly easy, and if we don’t think about it carefully, might overdo it. So this is all in 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 a store with kind of okay furniture that takes a time to assemble.
(Laughter)
I don’t know about you, but every time I one of those, it takes me much longer, it’s much effortful, it’s much more confusing, I put things in the wrong — I 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 other ones.
(Laughter)
And there’s an story about cake mixes. So when they started cake mixes the ’40s, they would take this powder and they would put it a box, and they would ask housewives to basically it in, stir some water in it, mix it, put it in oven, and — voila — you had cake. But it out they were very unpopular. People did not want them, and they about all kinds of reasons for that. Maybe the taste 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 my cake.” No, it 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 the out of the powder.
(Laughter)
Now you had to the eggs and add them, you had to measure milk and add it, mixing it. Now it was your cake. Now was fine.
(Laughter)
(Applause)
Now, I think a little like the IKEA effect, by getting people to work harder, they actually got to love what they’re doing to a higher degree.
So do we look at this question experimentally? We asked to build some origami. We gave them instructions on how create origami, and we gave them a sheet of paper. And these were all novices, and they built something was really quite ugly — nothing like a frog or crane. But then we told them, “Look, this origami really belongs to us. You worked for us, I’ll tell you what, we’ll sell it to you. How much do you want to pay for it?” we measured how much they were willing to pay it. And we had two types of people: We had the people who built it, the people who did not build it, and just at it as external observers. And what we found that the builders thought that these were beautiful pieces origami —
(Laughter)
and they were willing to pay five 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?” “I love this origami, and everybody else will love it as well?” Which one of two is correct? Turns out the builders not only loved the origami more, they that everybody would see the world in their view. They everybody else would love it more as well.
In next version, we tried to do the IKEA effect. We tried to make it more difficult. for some people, we gave the same task. For people, we made it harder by hiding the instructions. At top of the sheet, we had little diagrams of how you fold origami. For people, we just eliminated that. So now this was tougher. What happened? Well in an objective way, origami now was uglier, it was more difficult. Now when we looked at easy origami, we saw the same thing — builders loved it more, evaluators loved less. When you looked at the hard instructions, the effect was larger. Why? Because now the builders it even more.
(Laughter)
They put all this extra effort into it. And evaluators? loved it even 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 and associations and so on. Most people would say for a lot, a lot of money.
(Laughter)
On days.
(Laughter)
But imagine 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 like your kids, and you played with them for a few hours, when you were about to leave, the parents said, “Hey, by way, just before you leave, if you’re interested, they’re sale.”
(Laughter)
How much would you pay for them now? Most say not that much. And this is because our are so valuable, not just because of who they are, but because of us, because they are so connected us, and because of the time and connection. By the way, if you think IKEA instructions are good, what about the instructions that come with kids, are really tough.
(Laughter)
By the way, these are kids, which, of course, are wonderful and so on. Which comes to tell one more thing, which is, much like our builders, when they look at creature of their creation, we don’t see that other people don’t see our way.
Let me say one last comment. If you think Adam Smith versus Karl Marx, Adam Smith had a very important notion of efficiency. He gave an of a pin factory. He said pins have 12 steps, and if one person does all 12 steps, production is very low. if you get one person to do step one, and person to do step two and step three and so on, production can increase tremendously. indeed, this is a great example, and the reason for Industrial Revolution and efficiency. Karl Marx, on the other hand, said that the alienation of labor is incredibly important how people think about the connection to what they are doing. And if you all 12 steps, you care about the pin. But if you do one step every time, you don’t care as much.
I think that in the Industrial Revolution, Adam Smith was more correct Karl Marx. But the reality is that we’ve switched, and we’re in the knowledge economy. You can ask yourself, what in a knowledge economy? Is efficiency still more important than meaning? I think answer is no. I think that as we move to in which people have to decide on their own about much effort, attention, caring, how connected they feel to it, are they thinking labor on the way to work, and in the shower and so on, all 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 get people to be both more productive and happier.
Thank you much.