I want to talk a little bit today about labor work.
When we think about how people work, the intuition we have is that people are like rats in a maze — that all care about is money, and the moment we give them money, we direct them to work one way, we can direct them work another way. This is why we give bonuses 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 the time, if you 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 who 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 — cold, challenging circumstances. And if people were just to be happy, the moment they would get to the top, they would say, “This was a mistake. I’ll never do it again.”
(Laughter)
“Instead, let me sit on a beach somewhere mojitos.” But instead, people go down, and after they recover, go up again. And if you think about mountain as an example, it suggests all kinds of things. It suggests we care about reaching the end, a peak. It that we care about the fight, about the challenge. 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. was one of my students from a few years earlier, he came one day back to campus. And he told me the following story: He said 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. And he working very hard on this presentation — graphs, tables, information. stayed late at night every day. And the day before it was due, he sent his PowerPoint presentation his boss, and his boss wrote him back and said, “Nice presentation, but merger is canceled.” And the guy was deeply depressed. Now at moment when he was working, he was actually quite happy. Every he was enjoying his work, he was staying late, he perfecting this PowerPoint presentation. But knowing that nobody would ever watch it made him quite depressed.
So started thinking about how do we experiment with this idea of fruits of our labor. And to start with, we a little experiment in which we gave people Legos, we asked them to build with Legos. And for some people, we them Legos and we said, “Hey, would you like to build this Bionicle for three dollars? We’ll you three dollars for it.” And people said yes, they built with these Legos. And when they finished, we took it, we put it under table, and we said, “Would you like to build another one, this time for $2.70?” If said yes, we gave them another one, and when finished, we asked them, “Do you want to build one?” for $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 meaningful condition. People built one Bionicle after another. After they every one of them, we put them under the table. And we them that at the end of the experiment, we take all these Bionicles, we will disassemble them, we will them back in the boxes, and we will use it for the participant.
There was another condition. This other condition was inspired David, my student. And this other condition we called the Sisyphic condition. if you remember the story about Sisyphus, Sisyphus was punished by 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 about this as the essence of doing futile work. can imagine that if he pushed the rock on different hills, least he would have some sense of progress. Also, if you look at prison movies, the way that the guards torture the prisoners is get them to dig a hole, and when the prisoner is finished, they 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 to be particularly demotivating.
So in the second condition of this experiment, that’s exactly we did. We asked people, “Would you like to build one for three dollars?” And if they said yes, they built it. Then we them, “Do you want to build another one for $2.70?” And if said yes, we gave them a new one, and they were building it, we took apart the one that they just finished. And when finished that, we said, “Would you like to build another one, this time for 30 cents less?” if they said yes, we gave them the one that they built 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 happened was that people built many more Bionicles — eleven in the meaningful condition, versus in the Sisyphus condition. And by the way, we should out that this was not big meaning. People were curing cancer or building bridges. People were building Bionicles a few cents. And not only that, everybody knew that the Bionicles be destroyed quite soon. So there was not a opportunity for big meaning. But even the small meaning a difference.
Now we had another version of this experiment. this other version of the experiment, we didn’t put people this situation, we just described to them the situation, much as I am describing to you now, we asked them to predict 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 the of the importance, the extent to which it’s important.
There was other piece of data we looked at. If you about it, there are some people who love Legos, and some people who don’t. And you would that the people who love Legos would build more Legos, even for less money, because after all, they get internal joy from it. And the people who love Legos less would build less Legos because the that they derive from 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 amount of Legos people built.
What happened in the Sisyphic condition? In condition, the correlation was zero — there was no between the love of Legos, and how much people built, suggests to me that with this manipulation of breaking in front of people’s eyes, we basically crushed any joy they could get out of this activity. We basically eliminated it.
Soon after I finished running experiment, I went to talk to a big software in Seattle. I can’t tell you who they were, but they were a big in Seattle. This was a group within the software company was put in a different building, and they asked to innovate, and create the next big product for company. And the week before I showed up, the of this big software company went to that group, 200 engineers, and the project. And I stood there in front of 200 the most depressed people I’ve ever talked to. And I described to them some of these experiments, and they said they felt like they had just been that experiment. And I asked them, I said, “How many of you show up to work later than you used to?” everybody raised their hand. I said, “How many of now go home earlier than you used to?” Everybody their hand. I asked them, “How many of you now not-so-kosher things to your expense reports?” And they didn’t raise their hands, but they took out to dinner and showed me what they could with expense reports. And then I asked them, I said, “What could the have done to make you not as depressed?” And they came up with all of ideas.
They said the CEO could have asked them to present to the whole company their journey over the last two years and what they decided to do. could have asked them to think about which aspect of their technology could fit with other parts the organization. He could have asked them to build next-generation prototypes, and see how they would work. But the thing that any one of those would require some effort motivation. And I think the CEO basically did not 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 this way, and now that I’m directing you in way, everything will be okay.” But if you understood how meaning is, then you would figure out that it’s important to spend some time, energy and effort in people to care more about what they’re doing.
The next was slightly different. We took a sheet of paper with random letters, and asked people to find pairs of letters that were identical next to each other. That was the task. did the first sheet, then we asked if they wanted to another for a little less money, the next sheet for a little bit less, and so and so forth. And we had three conditions. In the first condition, people wrote their name the sheet, found all the pairs of letters, gave it to experimenter, the experimenter would look at it, scan it from to bottom, say “Uh huh,” and put it on the next to them. In the second condition, people did write their name on it. The experimenter looked at it, took the of paper, did not look at it, did not scan it, and simply put it on the of pages. So you take a piece, you just put it on side. In the third condition, the experimenter got the of paper, and put it directly into a shredder.
(Laughter)
What happened in three conditions?
In this plot I’m showing you at pay rate people stopped. So low numbers mean that people worked harder. They worked for much longer. the acknowledged condition, people worked all the way down to 15 cents. At 15 cents per page, 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 — get them not to be as happy with what they’re doing. But I should out, by the way, that in the shredder condition, could have 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, then you see nobody is really testing it, so you would do more and more and more. So fact, in the shredder condition, people could have submitted more work and gotten money, and put less effort into it. But what about the ignored condition? Would the condition be more like the acknowledged or more like the shredder, or somewhere the middle? It turns out it was almost like the shredder.
Now there’s good news and bad here. The bad news is that ignoring the performance of people is as bad as shredding their effort in front of their eyes. Ignoring you a whole way out there. The good news is that by simply at 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 be so difficult. The bad news is that eliminating motivations seems to be easy, and if we don’t think about it carefully, we might overdo it. So is all in terms of negative motivation, or eliminating negative motivation.
The part I want to show you is something about motivation. So there is a store in the U.S. called IKEA. IKEA is a store with kind of okay furniture that a long time to assemble.
(Laughter)
I don’t know about you, every time I assemble one of those, it takes me much longer, it’s much effortful, it’s much more confusing, I put things in wrong way — I can’t say I enjoy those pieces. I can’t say I the process. But when I finish it, I seem to like those IKEA of furniture more than I like other ones.
(Laughter)
And there’s an old story about mixes. So when they started cake mixes in the ’40s, they would take powder and they would put it in a box, and they ask housewives to basically pour it in, stir some water in it, mix it, put in the oven, and — voila — you had cake. But it turns out they very unpopular. People did not want them, and they about all kinds of reasons for that. Maybe the taste was not good? No, the was great. What they figured out was that there not enough effort involved. It was so easy that nobody serve cake to their guests and say, “Here is cake.” No, it was somebody else’s cake, as if you bought it in the store. It didn’t really like your own. So what did they do? They took the eggs and milk out of the powder.
(Laughter)
Now you had to break the eggs and them, you had to measure the milk and add it, mixing it. Now was your cake. Now everything was fine.
(Laughter)
(Applause)
Now, think a little bit like the 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? We people to build some origami. We gave them instructions how to create origami, and we gave them a sheet paper. And these were all novices, and they built something that was really ugly — nothing like a frog or a crane. But then we told them, “Look, this really belongs to us. You worked for us, but I’ll tell you what, we’ll it to you. How much do you want to pay for it?” And measured how much they were willing to pay for it. And we had two types people: We had the people who built it, and the people did not build it, and just looked at it external observers. And what we found was that the thought that these were beautiful pieces of origami —
(Laughter)
and they willing to pay five times more for them than the people who just them externally. Now you could say — if you were a builder, you think [you’d say], “Oh, I love 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 those two is correct? Turns out the builders not only loved the more, they thought that everybody would see the world in their view. They thought everybody else love it more as well.
In the next version, tried to do the IKEA effect. We tried to make it more difficult. So for some people, gave the same task. For some people, we made it harder by hiding instructions. At the 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 objective way, the origami now was uglier, it was more difficult. Now we looked at the easy origami, we saw the same thing — builders loved it more, evaluators it less. When you looked at the hard instructions, the effect was larger. Why? now the builders loved it even more.
(Laughter)
They put all this extra effort into it. And evaluators? loved it even less. Because in reality, it was even than the first version.
(Laughter)
Of course, this tells something about how we evaluate things.
Now think about kids. Imagine I asked you, “How much would sell your kids for?” Your memories and associations and so on. Most people would say for a lot, lot of money.
(Laughter)
On good days.
(Laughter)
But this was slightly different. Imagine if you did not your kids. And one day you went to the park and you met some kids. were just like your kids, and you played with them for a few hours, 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 much would you pay for them now? Most say not that much. And this is because our kids are so valuable, not because of who they are, but because of us, because they are so connected to us, because of the time and connection. By the way, if you IKEA instructions are not good, what about the instructions that come with kids, those really tough.
(Laughter)
By the way, these are my kids, which, course, are wonderful and so on. Which comes to you one more thing, which is, much like our builders, when they look at the creature of 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 an example of a pin factory. He said pins have 12 different steps, if one person does all 12 steps, production is very low. But if you one person to do step one, and one person to step two and step three and so on, production increase tremendously. And indeed, this is a great example, and the reason the Industrial Revolution and efficiency. Karl Marx, on the hand, said that the alienation of labor is incredibly important in how think about 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 Revolution, Adam Smith was more correct than Karl Marx. But the is 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 than meaning? I think the answer no. I think that as we move to situations in which people have to on their own about how much effort, attention, caring, how connected feel to it, are they thinking about labor on the way to work, and in the shower and on, all of a sudden Marx has more things to say us. So when we think about labor, we usually think about 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 all those 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 very much.