I want talk a little bit today about labor and work.
When we about how people work, the naive intuition we have is that people are like rats in a — that all people care about is money, and the moment we give money, we can direct them to work one way, we direct them to work another way. This is why we give bonuses bankers and pay in all kinds of ways. And we really have this simplistic view of why people work, and what the labor market looks like.
At the same time, if think about it, there’s all kinds of strange behaviors in world around us. Think about something like mountaineering and mountain climbing. If read books of people who climb mountains, difficult mountains, do you think that those books full of moments of joy and happiness? No, they are of misery. In fact, it’s all about frostbite and difficulty walking, and 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 terrible mistake. I’ll never do it again.”
(Laughter)
“Instead, let me on a beach somewhere drinking mojitos.” But instead, people go down, and they recover, they go up again. And if you think about mountain as an example, it suggests all kinds of things. It suggests that we about reaching the end, a peak. It suggests that we about the fight, about the challenge. It suggests that there’s all kinds of other things that motivate us 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 a few earlier, and he came one day back to campus. he told me the following story: He said that more than two weeks, he was working on a PowerPoint presentation. He was working in a big bank, this was in preparation for a merger and acquisition. And was working very hard on this presentation — graphs, tables, information. He stayed late at night day. And the day before it was due, he sent his PowerPoint presentation to boss, and his boss wrote him back and said, “Nice presentation, but merger 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 was this PowerPoint presentation. But knowing that nobody would ever it made him quite depressed.
So I started thinking how do we experiment with this idea of the fruits of our labor. to start with, we created a little experiment in which gave people Legos, and we asked them to build Legos. And for some people, we gave them Legos and said, “Hey, would you like to build this Bionicle three dollars? We’ll pay you three dollars for it.” And people said yes, they built with these Legos. And when they finished, we took it, put it under the table, and we said, “Would like to build another one, this time for $2.70?” If they yes, we gave them another one, and when they finished, we asked them, “Do you want to build 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 called the meaningful condition. People built one Bionicle after another. After they finished every one of them, we put under the table. And we told them that at 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 it for next participant.
There was another condition. This other condition was inspired by David, my student. this other condition we called the Sisyphic condition. And if remember the story about Sisyphus, Sisyphus was punished by the gods to push the rock up a hill, and when he almost got to end, the rock would roll over, and he would have to start again. you can think about this as the essence of doing work. You can imagine that if he pushed the rock on hills, at least he would have some sense of progress. Also, if you look at movies, sometimes the way that the guards torture the prisoners is to get them to dig a hole, when the prisoner is finished, they ask him to fill the hole back up then dig again. There’s something about this cyclical version of doing something over over and over that seems to be particularly demotivating.
So in second condition of this experiment, that’s exactly what we did. We asked people, “Would you like to one Bionicle for three dollars?” And if they said yes, built it. Then we asked them, “Do you want to another one for $2.70?” And if they said yes, we gave them new one, and as they were building it, we took apart the one that just finished. And when they finished that, we said, “Would you like to build another one, this for 30 cents less?” And if they said yes, gave them the one that they built and we broke. So was an endless cycle of them building, and us destroying front of their eyes.
Now what happens when you compare these conditions? The first thing that happened was that people many more Bionicles — eleven in the meaningful condition, seven 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. People were building Bionicles a few cents. And not only that, everybody knew that the Bionicles would destroyed quite soon. So there was not a real opportunity for big meaning. even the small meaning made a difference.
Now we had another version of this experiment. In this other of the experiment, we didn’t put people in this situation, we just described to the situation, much as I am describing to you now, we asked them to predict what the result would be. What happened? predicted the right direction but not the right magnitude. who were just given the description of the experiment said that the meaningful condition, people would probably build one more Bionicle. So understand that meaning is important, they just don’t understand the of the importance, the extent to which it’s important.
There one other piece of data we looked at. If think about 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 Legos, even for less money, because after all, they more internal joy from it. And the people who love Legos would build less Legos because the enjoyment that they derive it is lower. And that’s actually what we found in meaningful condition. There was a very nice correlation between the love of Legos and the amount of people built.
What happened in the Sisyphic condition? In that condition, the correlation was zero — was no relationship between the love of Legos, and how people built, which suggests to me that with this manipulation of breaking things in front people’s eyes, we basically crushed any joy that they could get out of this activity. We eliminated it.
Soon after I finished running this experiment, I went to talk a big software company in Seattle. I can’t tell you who were, but they were a big company in Seattle. This was group within the software company that was put in different building, and they asked them to innovate, and create next big product for this company. And the week before I showed up, the CEO of this software company went to that group, 200 engineers, and canceled the project. And stood there in front of 200 of the most depressed I’ve ever talked 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 of 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 used 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 their hands, but took me out to dinner and showed me what they could do with expense reports. And then asked them, I said, “What could the CEO have done to make you as depressed?” And they came up with all kinds of ideas.
They the CEO could have asked them to present to whole company about their journey over the last two years and they decided to do. He could have asked them to think about which of their technology could fit with other parts of the organization. He could have asked to build some next-generation prototypes, and see how they would work. But the thing is any one of those would require some effort and motivation. And I think CEO basically did not understand the importance of meaning. If the CEO, just 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 you in this way, everything will be okay.” But if you understood important meaning is, then you would figure out that it’s actually important to spend some time, and effort in getting people to care more about they’re doing.
The next experiment was slightly different. We a sheet of paper with random letters, and we asked people find pairs of letters that were identical next to other. That was the task. People did the first sheet, then we asked if they wanted do another for a little less money, the next sheet a little bit less, and so on and so forth. we had three conditions. In the first condition, people wrote their name on the sheet, found 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 on the pile next to them. In the second condition, people not write their name on it. The experimenter looked it, took the 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, you just put on the side. In the third condition, the experimenter got the sheet of paper, and put it into a shredder.
(Laughter)
What happened in those three conditions?
In this plot I’m showing you what pay rate people stopped. So low numbers mean that worked harder. They worked for much longer. In the acknowledged condition, people worked all the down to 15 cents. At 15 cents per page, they basically these efforts. In the shredder condition, it was twice much — 30 cents per sheet.
And this is the result we had before. You shred people’s efforts, — you get them not to be as happy with what they’re doing. But should point out, by the way, that in the condition, people could have cheated. They could have done so good work, because they realized people were just shredding it. So the first sheet you’d do good work, but then you 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 less effort it. But what about the ignored condition? Would the condition be more like the acknowledged or more like shredder, or somewhere 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 in front of their eyes. Ignoring gets you a whole way out there. The news is that by simply looking at something that somebody done, scanning it and saying “Uh huh,” that seems 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 to be incredibly easy, and if we don’t think about carefully, we might overdo it. So this is all in of negative motivation, or eliminating negative motivation.
The next part want to show you is something about positive motivation. there is a store in the U.S. called IKEA. IKEA is a store with kind of okay furniture that takes long time to assemble.
(Laughter)
I don’t know about you, but every time I assemble one of those, it me much longer, it’s much more effortful, it’s much 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 furniture than I like other ones.
(Laughter)
And there’s an old about cake mixes. So when they started cake mixes in the ’40s, they would take this and they would put it in a box, and they would ask housewives basically pour it in, stir some water in it, mix it, it in the oven, and — voila — you had cake. But it out they were very unpopular. People did not want them, and they thought about kinds of reasons for that. Maybe the taste was not good? No, the taste was great. What figured out was that there was not enough effort involved. was so 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 in the store. It didn’t really feel like your own. So what they do? They took the eggs and the milk out the powder.
(Laughter)
Now you had to break the and add them, you had to measure the milk and add it, mixing it. it was your cake. Now everything was fine.
(Laughter)
(Applause)
Now, think a little bit like the IKEA effect, by getting people to harder, they actually got them to love what they’re doing to a degree.
So how do we look at this question experimentally? We asked people to build origami. We gave them instructions on how to create origami, we gave them a sheet of paper. And these all novices, and they built something that was really ugly — nothing like a frog or a crane. then we told them, “Look, this origami really belongs to us. You worked for us, but I’ll 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 for it. And we had two of people: We had the people who built it, and people who did not build it, and just looked at as external observers. And what we found was that builders thought that these were beautiful pieces of origami —
(Laughter)
and were willing to pay five times more for them than people who just evaluated them externally. Now you could — if you were a builder, do you think [you’d say], “Oh, love this origami, but I know that nobody else would love it?” Or “I love 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 thought that everybody would the world in their view. They thought everybody else love it more as well.
In the next version, we tried to 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. 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? in an objective way, the origami now was uglier, was more difficult. Now when we looked at the easy origami, saw the same thing — builders 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 all 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 we evaluate things.
Now think about kids. Imagine I you, “How much would you sell your kids for?” Your memories and associations so on. Most people would say for a lot, a of money.
(Laughter)
On good days.
(Laughter)
But imagine this slightly different. Imagine if you did not have your kids. 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 to leave, the parents said, “Hey, by the way, before you leave, if you’re interested, they’re for sale.”
(Laughter)
How would you pay for them now? Most people say not that much. And this is our kids are so valuable, not just because of they are, but because of us, because they are so connected us, and because of the time and connection. By way, if you think IKEA instructions are not good, about the instructions that come with kids, those are tough.
(Laughter)
By the way, these are my kids, which, course, are wonderful and so on. Which comes to tell one more thing, which is, much like our builders, when they at the creature of their creation, we don’t see other people don’t see things our way.
Let me say one last comment. If you think about Adam versus Karl Marx, Adam Smith had a very important notion of efficiency. He gave an example of a factory. He said pins have 12 different steps, and if person does all 12 steps, production is very low. But if you get one person to do one, and one person to do step two and step three and so on, can increase tremendously. And indeed, this is a great example, the reason for the Industrial Revolution and efficiency. Karl Marx, on the other hand, said that the alienation labor is incredibly important in how people think about the to what they are doing. And if you do 12 steps, you care about the pin. But if you do one every time, maybe you don’t care as much.
I think that in Industrial Revolution, Adam 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 that as we move to situations in which people to decide on their own about how much effort, attention, caring, how they feel to it, are they thinking about labor on way to work, and in the shower and so on, all of a sudden has more things to say to us. So when we think about labor, we usually 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 we added of those components and thought about them — how do we our own meaning, pride, motivation, and how do we it in our workplace, and for the employees — think we could get people to be both more productive happier.
Thank you very much.