I want to talk a little today about labor and work.
When we think about how work, the naive intuition we have is that people 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 way. This is why we give bonuses to bankers and pay all kinds of ways. And we really have this incredibly simplistic view of why people work, what the labor market looks like.
At the same time, if you about it, there’s all kinds of strange behaviors in the world around us. Think about something like and mountain climbing. If you read books of people climb mountains, difficult mountains, do you think that those books are full of moments joy and happiness? No, they are full of misery. fact, it’s all about frostbite and having difficulty walking, and difficulty breathing — cold, challenging circumstances. And people were just trying to be happy, the moment they would to the top, they would say, “This was a terrible mistake. I’ll never it again.”
(Laughter)
“Instead, let me sit on a 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. It suggests that care about the fight, about the challenge. It suggests that there’s all kinds other things that motivate us to work or behave all kinds of ways.
And for me personally, I started about this after a student came 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: He said that for more two weeks, he was working on a PowerPoint presentation. He 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 at night every day. And the day before it was due, he his PowerPoint presentation to his boss, and his boss wrote him back and said, “Nice presentation, but merger is canceled.” And the guy was deeply depressed. Now at the when he was working, he was actually quite happy. night he was enjoying his work, he was staying late, he was this PowerPoint presentation. But knowing that nobody would ever watch it made him depressed.
So I started thinking about how do we with this idea of the fruits of our labor. to start with, we created a little experiment in which we gave Legos, and we asked them to build with Legos. And for some people, we gave Legos and we said, “Hey, would you like to build this Bionicle three dollars? We’ll pay you three dollars for it.” people said yes, and they built with these Legos. And when they finished, took it, we put it under the table, and we said, “Would you like to another one, this time for $2.70?” If they said yes, we gave another one, and when they finished, we 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 called the meaningful condition. People built one Bionicle after another. After they finished every of them, we put them under the table. And we told that at the end of the experiment, we will take all these Bionicles, we will disassemble them, we put them back in the boxes, and we will it for the next participant.
There was another condition. This other was inspired by David, my student. And this other condition we the Sisyphic condition. And if you remember the story about Sisyphus, Sisyphus was by the gods to push the same rock up a hill, and when almost got to the end, the rock would roll over, and would have to start again. And you can think this 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, you look at prison movies, sometimes the way that the torture the prisoners is to get them to dig a hole, and when the prisoner finished, they ask him to fill the hole back up and then 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 another one for $2.70?” if they said yes, we gave them a new one, as they were building it, we took apart the one that they finished. And when they finished that, we said, “Would like to build another one, this time for 30 cents less?” And they said yes, we gave them the one that they built and we broke. So this was endless cycle of them building, and us destroying in front their eyes.
Now what happens when you compare these two conditions? The thing that happened was that people built many more — eleven in the meaningful condition, versus seven in the Sisyphus condition. by the way, we should point out that this was big meaning. People were not curing cancer or building bridges. were building 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 of this experiment. In this other version of the experiment, we didn’t people in this situation, we just described to them situation, much as I am describing to you now, we asked them to predict what the result would be. What happened? People predicted the right but not the right magnitude. People who were just given the description the experiment said that in the meaningful condition, people would probably one more Bionicle. So people understand that meaning is important, they just don’t the magnitude of the importance, the extent to which it’s important.
There was one other piece of data we looked at. you think about it, there are some people who Legos, and some people who 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 people who love Legos less would build less Legos because enjoyment that they derive from it is lower. And that’s actually what we found in the meaningful condition. was a very nice correlation between the love of Legos and amount of Legos people built.
What happened in the condition? In that condition, the correlation was zero — there was no relationship between the love of Legos, how much people built, which suggests to me that with 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 went to to 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 that put in a different building, and they asked them innovate, and create the next big product for this company. And the week I showed up, the CEO of this big software company went to that group, 200 engineers, and canceled project. And I 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 felt like they had just through that experiment. And I asked them, I said, “How of you now show up to work later than used to?” And everybody raised their hand. I said, “How of you now go home earlier than you used to?” Everybody their hand. I asked them, “How many of you add not-so-kosher things to your expense reports?” And they didn’t raise their hands, but they took me out to and showed me what they could do with expense reports. And then I them, I said, “What could the CEO have done to make you not as depressed?” they came up with all kinds of ideas.
They the CEO could have asked them to present to the whole company about their journey over last two years and what they decided to do. He have asked them to think about which aspect of their could fit with other parts of the organization. He have asked them to build some next-generation prototypes, and see how they would work. the thing is that any one of those would require some effort motivation. And I think the CEO basically did not understand importance of meaning. If the CEO, just like our participants, the essence of meaning is unimportant, then he [wouldn’t] care. he would say, “At the moment I directed you in this way, and now that I’m you in this way, everything will be okay.” But you understood how important meaning is, then you would 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 random letters, and we asked people to find pairs of letters that were identical next to other. That was the task. People did the first sheet, then asked if they wanted to do another for a little less money, the next sheet a little bit less, and so on and so forth. And we three conditions. In the first condition, people wrote their name on the sheet, found the pairs of letters, gave it to the experimenter, experimenter would look at it, scan it from top bottom, say “Uh huh,” and put it on the pile next to them. the second condition, people did not write their name it. The experimenter looked at it, took the sheet paper, did not look at it, did not scan it, simply put it on the pile of pages. So take a piece, you just put it on the side. In the third condition, the experimenter got sheet of paper, and put it directly into a shredder.
(Laughter)
What happened in those three conditions?
In plot I’m showing you at what pay rate people stopped. So low numbers mean people worked harder. They worked for much longer. In the acknowledged condition, worked all the way down to 15 cents. At 15 per page, they basically stopped these efforts. In the condition, it was twice as much — 30 cents per sheet.
And this is basically result we had before. You shred people’s efforts, output — you them not to be as happy with what they’re doing. But I point out, by the way, that in the shredder condition, people could cheated. They could 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 nobody really testing it, so you would do more and more more. So in fact, in the shredder condition, people could have submitted work and gotten more money, and put less effort into it. But what about the ignored condition? the ignored condition be 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 good news and news here. The bad news is that ignoring the performance of people is almost bad as shredding their effort in front of their eyes. Ignoring gets you whole way out there. The good news is that simply looking at something that somebody has done, scanning it and saying “Uh huh,” seems to be quite sufficient to dramatically improve people’s motivations. So good news is that adding motivation doesn’t seem to so difficult. The bad news is that eliminating motivations seems be incredibly easy, and if we don’t think about it carefully, might overdo it. So this is all in terms negative motivation, or eliminating negative motivation.
The next part I to show you is something about positive motivation. So there is a store the U.S. called IKEA. And IKEA is 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 more effortful, it’s much more confusing, I put things the wrong way — I can’t say I enjoy pieces. I can’t say I enjoy the process. But when I finish it, I seem like those IKEA pieces of furniture more than I other ones.
(Laughter)
And there’s an old story about cake mixes. So when they started cake in the ’40s, they would take this powder and they would 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 — — you had cake. But it turns out they were unpopular. People did not want them, and they thought about all kinds reasons for that. Maybe the taste was not good? No, the taste was great. What they figured out that there was not enough effort involved. It was easy that nobody could serve cake to their guests say, “Here is my cake.” No, it was somebody else’s cake, as if you bought it the store. It didn’t really feel like your own. what did they do? They took the eggs and the milk out of the powder.
(Laughter)
Now you to break the eggs and add them, you had to the milk and add it, mixing it. Now it your cake. Now everything was fine.
(Laughter)
(Applause)
Now, I a little bit like the 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 at this question experimentally? We asked people to build some origami. gave them instructions on how to create origami, and 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 belongs to us. You worked for us, but I’ll tell what, we’ll sell it to you. How much do you want pay for it?” And we measured how much they were willing to pay for it. And we two types of people: We had the people who it, and the people who did not build it, and just looked it as external observers. And what we found was the builders thought that these were beautiful pieces of origami —
(Laughter)
and were willing to pay five times more for them than the people who just them externally. Now you could say — if you a builder, do you think [you’d say], “Oh, I love this origami, but I know that nobody would love it?” Or “I love this origami, and everybody will love it as well?” Which one of those two is correct? Turns out builders not only loved the origami more, they thought that everybody would the world in their view. They thought everybody else would love it more as well.
In next version, we tried to do the IKEA effect. 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. the top of the sheet, we had little diagrams of how you fold origami. some people, we just eliminated that. So now this was tougher. What happened? Well in objective way, the origami now was uglier, it was more difficult. Now when looked at the easy origami, we saw the same — builders loved it more, evaluators loved it less. When you looked the hard instructions, the effect was larger. Why? Because the builders loved it even more.
(Laughter)
They put this extra effort into it. And evaluators? They loved it even less. Because reality, it was even uglier than the first version.
(Laughter)
Of course, this tells you something about how evaluate things.
Now think about kids. Imagine I asked you, “How much would you sell your kids for?” Your and associations and so on. Most people would say for a lot, a of money.
(Laughter)
On good days.
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But imagine this was different. Imagine if you did not have your kids. And one day you to the park and you met some kids. They were like your kids, and you played with them for a hours, and when you were about to leave, the said, “Hey, by the way, just before you leave, if you’re interested, they’re for sale.”
(Laughter)
How would you pay for them now? Most people say not 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 to us, because of the time and connection. By the way, if think IKEA instructions are not good, what about the instructions that with kids, those are really tough.
(Laughter)
By the way, are my kids, which, of course, are wonderful and so on. Which comes to tell you one thing, which is, much 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. If think about Adam Smith versus Karl Marx, Adam Smith a very important notion of efficiency. He gave an example of pin factory. He said pins have 12 different steps, if one person does all 12 steps, production is very low. if you get one person to do step one, one person to do step two and step three and so on, production can tremendously. And indeed, this is a great example, and the reason for the Industrial and efficiency. Karl Marx, on the other hand, said that alienation of labor is incredibly important in how people think the connection to what they are doing. And if you do all 12 steps, you care the pin. But if you do one step every time, you don’t care as much.
I think that in the Industrial Revolution, Smith was more correct than Karl Marx. But the reality that we’ve switched, and now we’re in the knowledge economy. You can ask yourself, happens in a knowledge economy? Is efficiency still more important meaning? I think the answer is no. I think as we move to situations in which people have decide on their own about how much effort, attention, caring, how they feel to it, are they thinking about labor on the way work, and in the shower and so on, all of a sudden Marx has things to say to us. So when we think about labor, we 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 good news is that if added all of those components and thought about them — how we create our own meaning, pride, motivation, and how do do it in our workplace, and for the employees — I think we could people to be both more productive and happier.
Thank very much.