I to talk a little bit today about labor and work.
When think about how people work, the naive intuition we have is that are like rats in a maze — that all people care about is money, and the moment we them money, we can direct them to work one way, we can them to work another way. This is why we give bonuses bankers and pay in all kinds of ways. And we have this incredibly simplistic view of why people work, and the labor market looks like.
At the same time, if you about it, there’s all kinds of strange behaviors in world around us. Think about something like mountaineering and climbing. If you read books of people who climb mountains, mountains, do you think that those books are full of moments of joy and happiness? No, are full of misery. In fact, it’s all about frostbite and difficulty walking, and difficulty breathing — cold, challenging circumstances. And people were just trying to be happy, the moment would get to the top, they would say, “This a terrible mistake. I’ll never do it again.”
(Laughter)
“Instead, let me sit on beach somewhere 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 that we care about reaching end, a peak. It suggests that we care about the fight, about the challenge. It suggests 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 from a few years earlier, and he came one back to campus. And he told me the following story: He said that for than two weeks, he was working on a PowerPoint presentation. He was working a big bank, and this was in preparation for a and acquisition. And he was working very hard on this — graphs, tables, information. He stayed late at night every day. And the before it was due, he 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. night he was enjoying his work, he was staying late, was 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, we created little experiment in which we gave people Legos, and we asked them build with Legos. And for some people, we gave them Legos and we said, “Hey, would 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 when they finished, we 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 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 for me.” This was what we called the meaningful condition. People built Bionicle after another. After they finished every one of them, we them 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 it for the next participant.
There was another condition. This other was inspired by David, my student. And this other condition we called the condition. And if you remember the story about Sisyphus, Sisyphus was punished by the gods to the same rock up a hill, and when he almost 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 imagine that if he pushed rock on different hills, at least he would have some of progress. Also, if you look at prison movies, sometimes way that the guards torture the prisoners is to them to dig a hole, and when the prisoner finished, they ask him to fill the hole back up and then dig again. There’s something about this version of doing something over and over and over that seems be particularly demotivating.
So in the second condition of this experiment, that’s exactly what we did. We people, “Would you like to build one Bionicle for three dollars?” And if they yes, they built it. Then we asked them, “Do you want to another one for $2.70?” And if they said yes, gave them a new one, and as they were it, we took apart the one that they just finished. when they finished that, we said, “Would you like to another one, this time for 30 cents less?” And they said yes, we gave them the one that they built we broke. So this was an endless cycle of them building, and destroying in front of their eyes.
Now what happens when you compare these conditions? The first 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 not big meaning. People were not curing cancer or building bridges. were building Bionicles for a few cents. And not only that, everybody that the Bionicles would be destroyed quite soon. So there was a real opportunity for big meaning. But even the small meaning made a difference.
Now we had version 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, and we asked them to what the result would be. What happened? People predicted right direction but not the right magnitude. People who were given the description of 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 understand magnitude of the importance, the extent to which it’s important.
There was one piece of data we looked at. If you think about it, are some people who love Legos, and some people who don’t. And you would speculate that the who love Legos would build more Legos, even for less money, because after all, they more internal joy from it. And the people who love Legos less would build less Legos the enjoyment that they derive from it is lower. And that’s actually we found in the meaningful condition. There was a very nice correlation between the love Legos and the amount of Legos people built.
What happened in the Sisyphic condition? In that condition, correlation was zero — there was no relationship between the love Legos, and how much people built, which suggests to that with this manipulation of breaking things in front of people’s eyes, 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 to a big software company in Seattle. I can’t tell you who they were, but they were a company in Seattle. This was a group within the software that 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 company went to group, 200 engineers, and canceled the project. And I there in front of 200 of the most depressed I’ve ever talked to. And I described to them some of Lego experiments, and they said they felt like they had been through that experiment. And I asked them, I said, “How many of you now show up work later than you used to?” And everybody raised hand. I said, “How many of you now go earlier than you used to?” Everybody raised their hand. asked them, “How many of you now add not-so-kosher things to 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 I asked them, I said, “What could the CEO have done to you not as depressed?” And they came up with all kinds of ideas.
They said the CEO have asked them to present to the whole company their journey over the last two years and what decided to do. He could have asked them to about which aspect of their technology could fit with other parts of organization. He could have asked them to build some next-generation prototypes, see how they would work. But the thing is that any one those would require some effort and motivation. And I think the CEO did not understand the importance of meaning. If the CEO, just like participants, thought the essence of meaning is unimportant, then he [wouldn’t] care. he would say, “At the moment I directed you in this way, now that I’m directing you in this way, everything will okay.” But if you understood how important meaning is, then you figure out that it’s actually important to spend some time, energy and effort in people to care 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 pairs of letters were identical next to each other. That was the task. 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 so forth. And we had conditions. In the first condition, people wrote their name the sheet, found all the pairs of letters, gave it the experimenter, the experimenter would look at it, scan from top to bottom, say “Uh huh,” and put it 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 it, did not scan it, and simply put it on the pile of pages. you take a piece, you just put it on side. In the third condition, the experimenter got the sheet of paper, put it directly into a shredder.
(Laughter)
What happened in those three conditions?
In this I’m showing you at what 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 these efforts. In the shredder condition, it was twice as much — 30 cents sheet.
And this is basically the result we had before. You shred people’s efforts, output — you them not 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 could have done not so work, because they realized people were just shredding it. So maybe the first sheet you’d do good work, then you see nobody is really testing it, so you do more and more and more. So in fact, the shredder condition, people could have submitted more work and gotten more money, put 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 bad news here. The bad news is that ignoring performance of people is almost as bad as shredding their effort in of their eyes. Ignoring gets you a whole way out there. good news is that by simply looking at something that somebody has done, it and saying “Uh huh,” that seems to be quite sufficient to dramatically improve people’s motivations. the good news is that adding motivation doesn’t seem to be so difficult. The bad news that eliminating motivations seems to be incredibly easy, and we don’t think about it carefully, we might overdo it. So this is all in terms of motivation, or eliminating negative motivation.
The next part I to show you is something about positive motivation. So there is a in the U.S. called IKEA. And IKEA is a store with kind okay furniture 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 those pieces. I can’t say I enjoy the process. But I finish it, I seem to like those IKEA pieces of furniture more I like other ones.
(Laughter)
And there’s an old about cake mixes. So when they started cake mixes the ’40s, they would take this powder and they would put it in box, and they would ask housewives to basically pour it in, stir some water in it, it, put 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 all kinds 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. 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 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 add them, you had to measure the milk and add it, it. Now it was your cake. Now everything was fine.
(Laughter)
(Applause)
Now, I think a little bit the IKEA effect, by getting people to work harder, actually got them to love what they’re doing to higher degree.
So how do we look at this question experimentally? We people to build some origami. We gave them instructions on how to create origami, and gave them a sheet of paper. And these were all novices, they built something that was really quite ugly — nothing like a frog a 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 to pay for it?” And we measured how much were willing to pay for it. And we had two types people: We had the people who built it, and the people who not build it, and just looked at it as external observers. And what we found was that builders thought that these were beautiful pieces of origami —
(Laughter)
and they were willing to pay five times more for than the people who just evaluated them externally. Now could say — if you were a builder, do think [you’d say], “Oh, I 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 the in their view. They thought everybody else would love more as well.
In the next version, we tried do the IKEA effect. We tried to make it more difficult. So for people, we gave the same task. For some people, we made it harder hiding the instructions. At the top of the sheet, we had little diagrams how you fold origami. For some people, we just that. So now this was tougher. What happened? Well in objective way, the origami now 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 the builders loved it even more.
(Laughter)
They put this extra effort into it. And evaluators? They loved it even less. Because in reality, it even uglier than the first version.
(Laughter)
Of course, this tells something about how we evaluate things.
Now think about kids. I asked you, “How much would you sell your kids for?” memories and associations and so on. Most people would for a lot, a lot of money.
(Laughter)
On days.
(Laughter)
But imagine this was slightly different. Imagine you did not have your kids. And one day went to the park and you met some kids. They were just like your kids, you played with them for a few hours, and when were 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 for them now? Most say not that much. And this is because our kids are valuable, not just because of who they are, but because of us, they are so connected to us, and because of the time and connection. the way, if you think IKEA instructions are not good, what about the instructions that with kids, those are really tough.
(Laughter)
By the way, these my kids, which, of course, are wonderful and so on. Which to tell you one more thing, which is, much like our builders, when they at the creature of their creation, we don’t see that other people don’t things 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. gave an example of a pin factory. He said pins have 12 different steps, and one person does all 12 steps, production is very low. But if 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 a great example, and the for the Industrial Revolution and efficiency. Karl Marx, on the other hand, that 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. But if do one step every time, maybe you don’t care much.
I think that in the Industrial Revolution, Adam 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, what happens a knowledge economy? Is efficiency still more important than meaning? I the 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 thinking about labor on the way to work, and in shower and so on, all of a sudden Marx has more to say to us. So when we think about labor, we usually think about motivation and payment the same thing, but the reality is that we should probably all kinds of things to it — meaning, creation, challenges, ownership, identity, pride, etc.
The good is that if we added all of those components and thought about — how do we create our own meaning, pride, motivation, and do we do it in our workplace, and for employees — I think we could get people to be both more productive and happier.
Thank very much.