I to talk a little bit today about labor and work.
When we think about how people work, the naive intuition have is that people are like rats in a maze — all people care about is money, and the moment we give them money, we can direct them work one way, we can direct them to work another way. This is why we give bonuses to and pay in all kinds of ways. And we have this incredibly simplistic view of why people work, 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 climbing. If you read books of people who climb mountains, difficult mountains, do think that those books are full of moments of and happiness? No, they are full of misery. In fact, it’s about frostbite and having difficulty walking, and difficulty breathing — cold, challenging circumstances. And if people were just trying to happy, the moment they would get to the top, would say, “This was a terrible mistake. I’ll never it again.”
(Laughter)
“Instead, let me sit on a beach somewhere drinking mojitos.” But instead, people go down, after they recover, they go up again. And if you about mountain climbing as an example, it suggests all kinds of things. It suggests that care about reaching the end, a peak. It suggests we care about the fight, about the challenge. It that there’s all kinds of 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 from a few years earlier, and he came one day to campus. And he told me the following story: He said that for more than two weeks, was working on a PowerPoint presentation. He was working in a big bank, and was in preparation for a merger and acquisition. And he was very hard on this presentation — graphs, tables, information. He stayed at 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 merger is canceled.” And the guy was deeply depressed. at the moment when he was working, he was actually quite happy. Every night he was his work, he was staying late, he was perfecting this PowerPoint presentation. But knowing that nobody would watch it made him quite depressed.
So I started about how do we experiment with this idea of the fruits our labor. And to start with, we created a little experiment which we gave people Legos, and we asked them to build 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 dollars for it.” And people said yes, and they built these Legos. And when they finished, we took it, we put it under the table, and said, “Would you like to build another one, this for $2.70?” If they said yes, we gave them 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 it for me.” This was what called the meaningful condition. People built one Bionicle after another. After finished every one of them, we put them under the table. we told them that at the end of the experiment, will take all these Bionicles, we will disassemble them, we will them back in the boxes, and we will use it for the next participant.
There another condition. This other condition was inspired by David, student. And this other condition we called the Sisyphic condition. if you remember the story about Sisyphus, Sisyphus was punished by the gods push the same rock up a hill, and when he almost got to the end, the rock would over, and he would have to start again. And you think about this as the essence of doing futile work. You can imagine that if he pushed the 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 get 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 cyclical version of doing something over and over and over that to be particularly demotivating.
So in the second condition this experiment, that’s exactly what we did. We asked people, “Would you like build one Bionicle for three dollars?” And if they yes, they built it. Then we asked them, “Do you 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 apart one that they just finished. And when they finished that, we said, “Would you like to another one, this time for 30 cents less?” And if they yes, we gave them the one that they built and broke. So this was an endless cycle of them building, us destroying in front of their eyes.
Now what happens you compare these two conditions? The first thing that happened was that people built many Bionicles — eleven in the meaningful condition, versus seven in the condition. And by the way, we should point out this was not big meaning. People were not curing cancer building bridges. People were building Bionicles for a few cents. And not only that, everybody that the Bionicles would be destroyed quite soon. So there not a real 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 I am describing to you now, and we asked to predict what the result would be. What happened? People the right direction but not the right magnitude. People who were given the description of the experiment said that in meaningful condition, people would probably build one more Bionicle. So people understand meaning is important, they just don’t understand the magnitude of importance, the extent to which it’s important.
There was one other piece data we looked at. If you think about it, there are some people who love Legos, some people who don’t. And you would speculate that the people love Legos would build more Legos, even for less money, because after all, they get more internal from it. And the people who love Legos less would build less Legos because the enjoyment that derive from it is lower. And that’s actually what found in the meaningful condition. There was a very nice correlation the love of Legos and the amount of Legos built.
What happened in the Sisyphic condition? In that condition, correlation was zero — there was no relationship between the love of Legos, and how much built, which suggests to me that with this manipulation of breaking things in of people’s eyes, we basically crushed any joy that they could get out this activity. We basically 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 they were, they were a big company in Seattle. This was a group the software company that was put in a different building, and asked them to innovate, and create the next big product for company. And the week before I showed up, the CEO this big software company went to that 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 just been through that experiment. And I asked them, said, “How many of you now show up to work later you used to?” And everybody raised their hand. I said, “How many of you now home earlier than you used to?” Everybody raised their hand. I them, “How many of you now add not-so-kosher things to your expense reports?” they didn’t raise their hands, but they took me out to dinner and me what they could do with expense reports. And I asked them, I said, “What could the CEO have done to make not as depressed?” And they came up with all kinds of ideas.
They said the could have asked them to present to the whole company about their journey over the last two years what 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 have asked them to build some next-generation prototypes, and see they would work. But the thing is that any one of those would require some effort and motivation. I think the CEO basically did not understand the importance meaning. If the CEO, just like our participants, thought the essence of meaning is unimportant, then [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, then you would figure out that it’s actually to spend some time, energy and effort in getting people care more about what they’re doing.
The next experiment slightly different. We took a sheet of paper with random letters, and we asked people to find pairs letters that were identical next to each other. That the task. People did the first sheet, then we asked they wanted to do another for a little less money, the next sheet for little bit less, and so on and so forth. And had three conditions. In the first condition, people wrote their name on sheet, found all the pairs of letters, gave it to the experimenter, the would look at it, scan it from top to bottom, say “Uh huh,” and put it on pile next to them. In the second condition, people did not write their name on it. experimenter looked at it, took the sheet of paper, did look at it, did not scan it, and 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 the sheet of paper, and put it directly into a shredder.
(Laughter)
What happened those 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 down to 15 cents. At 15 cents 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 have cheated. They could have not so good work, because they realized people were shredding it. So maybe the first sheet you’d do good work, but then you see nobody is really it, so you would do more and more and more. So in fact, in shredder condition, people could have submitted more work and gotten more money, and less effort into it. But what about the ignored condition? Would the ignored condition be like the acknowledged or more like the shredder, or somewhere in the middle? It out it was almost like the shredder.
Now there’s good news and bad news here. bad news is that ignoring the performance of people is almost as as shredding their effort in front of their eyes. gets you a whole way out there. The good news is by simply looking at something that somebody has done, scanning it saying “Uh huh,” that seems to be quite sufficient to dramatically improve people’s motivations. So good news is that adding motivation doesn’t seem to be so difficult. The bad news is that motivations seems to be incredibly easy, and if we don’t think about it carefully, we overdo it. So this is all in terms of negative motivation, eliminating negative motivation.
The next part I want to show is something about positive motivation. So there is a in the U.S. called IKEA. And IKEA is a with kind of okay furniture that takes a long time assemble.
(Laughter)
I don’t know about you, but every time I assemble one of those, it takes much longer, it’s much 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 I finish it, I seem to like those IKEA pieces of furniture 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 this powder and they put 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 very unpopular. People did not want them, and they thought about all kinds of reasons for that. the taste was not good? No, the taste was great. they figured out was that there was not enough involved. It was so easy that nobody could serve cake to guests and say, “Here is my cake.” No, it somebody else’s cake, as if you bought it in store. It didn’t really feel like your own. So what did they do? took the eggs and the milk out of the powder.
(Laughter)
Now had to break the eggs and add them, you to measure the milk and add it, mixing it. Now it was cake. Now everything 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 how do look at this question experimentally? We asked people to build some origami. We gave instructions on how to create origami, and we gave them sheet of paper. And these were all novices, and they built something was really quite ugly — nothing like a frog a crane. But then we told them, “Look, this origami really belongs us. You worked for us, but I’ll tell you what, we’ll sell it 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 the people who not build it, and just looked at it as external observers. And we found was that the builders thought that these beautiful pieces of origami —
(Laughter)
and they were willing to five times more for them than the people who just them externally. Now you could say — if you were a builder, do think [you’d say], “Oh, I love this origami, but I know that else would love it?” Or “I love this origami, and everybody will love it as well?” Which one of those 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 it more difficult. So for some people, we gave the task. For some people, we made it harder by hiding the instructions. At the top the sheet, we had little diagrams of how you origami. For some people, we just eliminated that. So now this tougher. What happened? Well in an objective way, the origami now was uglier, it was more difficult. when we looked at the easy origami, we saw the thing — builders loved it more, evaluators loved it less. When you looked at the hard instructions, the was larger. Why? Because now the builders loved it 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 you something about how we evaluate things.
Now about kids. Imagine I asked you, “How much would you sell your kids for?” memories and associations and so on. Most people would say for a lot, a of money.
(Laughter)
On good days.
(Laughter)
But imagine this was slightly different. Imagine if you did not your kids. And one day you went to the and you met some kids. They were just like kids, and you played with them for a few hours, when you were about to leave, the parents said, “Hey, by the way, just before leave, if you’re interested, they’re for sale.”
(Laughter)
How much you pay for them now? Most people say not that much. And this is because our kids are valuable, not just because of who they are, but because us, because 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, are my kids, which, of course, are wonderful and so on. Which comes to tell one more thing, which is, much like our builders, when look at the creature of their creation, we don’t see that people don’t see things our way.
Let me say one last comment. If you think about Smith versus Karl Marx, Adam Smith had a very important notion of efficiency. He gave example of a pin factory. He said pins have 12 steps, and if one person does all 12 steps, production very low. But if you get one person to do step one, and one to do step two and step three and so on, production can increase tremendously. indeed, this is a great example, and the reason the Industrial Revolution and efficiency. Karl Marx, on the other hand, said that the of labor is incredibly important in how people think about the connection to what they are doing. if you do all 12 steps, you care about 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, now we’re in the knowledge economy. You can ask yourself, what happens in 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 how much effort, attention, caring, how connected they feel to it, they thinking about labor on the way to work, in the shower and so on, all of a sudden Marx more things to say to 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 to — meaning, creation, challenges, ownership, identity, pride, etc.
The news is that if we added all of those and thought about them — how do we create our own meaning, pride, motivation, and do we do it in our workplace, and for the employees — I we could get people to be both more productive happier.
Thank you very much.