I to talk a little bit today about labor and work.
When we think about how people work, the intuition we have is that people are like rats in maze — that all people care about is money, and the moment give them money, we can direct them to work one way, we can direct them work another way. This is why we give bonuses to bankers pay in all kinds of ways. And we really this incredibly simplistic view of why people work, and the labor market looks like.
At the same time, if you think about it, there’s all of strange behaviors in the world around us. Think about something mountaineering and mountain climbing. If you read books of people who climb mountains, difficult mountains, you think that those books are full of moments of and happiness? No, they are full of misery. In fact, it’s all frostbite and having difficulty walking, and difficulty breathing — cold, circumstances. And if people were just trying to be happy, the 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 beach somewhere drinking mojitos.” But instead, people go down, and after they recover, they go again. And if you think about mountain climbing as an example, it suggests all of things. It suggests that we care about reaching end, a peak. It suggests that we care about fight, about the challenge. It suggests that there’s all of other things that motivate us to work or behave in all of ways.
And for me personally, I started thinking about this a student came to visit me. This was one my students from a few years earlier, and he one day back to campus. And he told me the following story: He said that for than two weeks, he was working on a PowerPoint presentation. was working in a big bank, and this was in preparation for a and acquisition. And he was working very hard on presentation — graphs, tables, information. He stayed late at night every day. And the day before it due, he sent his PowerPoint presentation to his boss, and boss wrote him back and said, “Nice presentation, but the merger is canceled.” And the guy deeply depressed. Now at the moment when he was working, he actually quite happy. Every night he was enjoying his work, was staying late, he was perfecting this PowerPoint presentation. But knowing that nobody would ever it made him quite 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 people Legos, and we them to build with Legos. And for some people, gave them Legos and we said, “Hey, would you like to build this Bionicle three dollars? We’ll pay you three dollars for it.” And said yes, and they built with these Legos. And when finished, we took it, we put it under the table, and said, “Would you like to build another one, this time for $2.70?” If they said yes, gave them another one, and when they finished, we them, “Do you want to build another one?” for $2.40, $2.10, so on, until at some point people said, “No more. It’s worth it for me.” This was what we called meaningful condition. People built one Bionicle after another. After they finished every one of them, put them under the table. And we told them that at the end the experiment, we will take all these Bionicles, we will disassemble them, we put them back in the boxes, and we will use for the next participant.
There was another condition. This other condition was inspired David, my student. And this other condition we called Sisyphic condition. And if you remember the story about Sisyphus, Sisyphus punished by the gods to push the same rock up hill, and when he almost got to the end, the rock would roll over, he would have to start again. And you can think about this as the essence doing futile work. You can imagine that if he pushed rock on different hills, at least he would have some sense progress. Also, if you look at prison movies, sometimes the way the guards torture the prisoners is to get them dig a hole, and when the prisoner is finished, ask him to fill the hole back up and then dig again. There’s something about this cyclical of doing something over and over and over that seems to be particularly demotivating.
So in the condition of this experiment, that’s exactly what we did. We asked people, “Would you like build one Bionicle for three dollars?” And if they said yes, they it. Then we asked them, “Do you want to build 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 they just finished. And they finished that, we said, “Would you like to build another one, time for 30 cents less?” And if they said yes, we them the one that they built and we broke. this was an endless cycle of them building, and us in front of their eyes.
Now what happens when you these two conditions? The first thing that happened was people built many more Bionicles — eleven in the meaningful condition, seven in the Sisyphus condition. And by the way, should point out that this was not big meaning. were not curing cancer or building bridges. People were building Bionicles for a few cents. not only that, everybody knew that the Bionicles would be destroyed quite soon. So there was not a opportunity for big meaning. But even the small meaning made a difference.
Now we another version of this experiment. In this other version the experiment, we didn’t put people in this situation, we just to them the situation, much as I am describing to now, and we asked them to predict what the would be. What happened? People predicted the right direction but not the right magnitude. who were just given the description of the experiment said that in the meaningful condition, would probably build 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 other piece data we looked at. If you think about it, there are some people love Legos, and some people who don’t. And you would speculate the people who love Legos would build more Legos, for less money, because after all, they get more internal joy from it. And 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 between the love Legos and the amount of Legos people built.
What happened the Sisyphic condition? In that condition, the correlation was — there was no relationship between the love of Legos, and how much people built, which suggests to that with this manipulation of breaking things in front people’s eyes, we basically crushed any joy that they could out of this activity. We basically eliminated it.
Soon after finished running this experiment, I went to talk to a software company in Seattle. I can’t tell you who they were, but they were a big company Seattle. This was a group within the software company that was put in different building, and they asked them to innovate, and create the next big product for this company. And week before I showed up, the CEO of this big software company went that group, 200 engineers, and canceled the project. And I stood there in front of 200 of most depressed people I’ve ever talked to. And I described to them some of Lego experiments, and they said they felt like they had just been that experiment. And I asked them, I said, “How many of you now show to work later than you used to?” And everybody their hand. I said, “How many of you now go home earlier you used to?” Everybody raised their hand. I asked them, “How many of you now add not-so-kosher things your expense reports?” And they didn’t raise their hands, but took me out to dinner and showed me what could do with expense reports. And then I asked them, I said, “What could the CEO have done make 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 about journey over the last two years and what they decided do. He could have asked them to think about which of their technology could fit with other parts of the organization. could have asked them to build some next-generation prototypes, and see how they work. But the thing is that any one of would require some effort and motivation. And I think the CEO basically not understand the importance of meaning. If the CEO, just like participants, thought the essence of meaning is unimportant, then he [wouldn’t] care. And he would say, “At the I 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 to care more what they’re doing.
The next experiment was slightly different. We took sheet of paper with random letters, and we asked people find pairs of letters that were identical next to each other. That was the task. People the first sheet, then we asked if they wanted to do another for a little less money, next sheet for a little bit less, and so and so forth. And we had three conditions. In the first condition, people wrote their on the sheet, found all the pairs of letters, gave to the experimenter, the experimenter would look at it, it from top to bottom, say “Uh huh,” and put it on the pile next them. In the second condition, people did not write their on it. The experimenter looked at it, took the sheet of paper, did not look at it, did scan it, and simply put it on the pile pages. So you take a piece, you just put it the 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 plot 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 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 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. I should point out, by the way, that in the shredder condition, could have cheated. They could have done not so good work, because they realized people were shredding it. So maybe the first sheet you’d do good work, then you see nobody is really testing it, so would do more and more and more. So in fact, in the condition, people could have submitted more work and gotten money, and put less effort into it. But what the ignored condition? Would the ignored condition be more the acknowledged or more like the shredder, or somewhere the middle? It turns out it was almost like shredder.
Now there’s good news and bad news here. The bad is that ignoring the performance of people is almost as as shredding their effort in front of their eyes. Ignoring gets a whole way out there. The good news is that by simply looking something that somebody has done, scanning it and saying “Uh huh,” seems to be quite sufficient to dramatically improve people’s motivations. So the good news 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 about it carefully, we might overdo it. So this all in terms of negative motivation, or 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 to assemble.
(Laughter)
I don’t about you, but every time I assemble one of those, it takes me much longer, it’s more effortful, it’s much more confusing, I put things in wrong way — I can’t say I enjoy those pieces. I can’t I enjoy the process. But when I finish it, I seem to like those pieces 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 this powder they would put it in a box, and they would housewives to basically pour it in, stir some water it, mix it, put it in the oven, and — voila — had cake. But it turns out they were very unpopular. did not want them, and they thought about all kinds of reasons for that. Maybe the taste not good? No, the taste was great. What they figured was that there was not enough effort involved. It so easy that nobody could serve cake to their and say, “Here is my cake.” No, it was somebody else’s cake, as you bought it in the store. It didn’t really feel your own. So what did they do? They took eggs and the milk out of the powder.
(Laughter)
Now you had to break eggs and add them, you had to measure the milk and add it, mixing it. Now it was cake. Now everything was fine.
(Laughter)
(Applause)
Now, I a little bit like the IKEA effect, by getting people work harder, they actually got them 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. gave them instructions on how to create origami, and we gave them a sheet of paper. And these all novices, and they built something that was really quite ugly — like a frog or a crane. But then we them, “Look, this origami really belongs to us. You worked us, but I’ll tell you what, we’ll sell it to you. How much do you to pay for it?” And we measured how much they were to pay for it. And we had two types of people: had the people who built it, and the people who did 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 five times more for them than the people who just evaluated them externally. Now you say — 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 this origami, everybody else will love it as well?” Which one of those two correct? Turns out the builders not only loved the origami more, they that everybody would see the world in their view. They thought everybody else would love it more well.
In the next version, we 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 fold origami. some people, we just eliminated that. So now this was tougher. What happened? Well in an 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 looked at the hard instructions, the effect was larger. Why? now the builders loved it even more.
(Laughter)
They put all this extra into it. And evaluators? They loved it even less. Because in reality, it was even uglier than the version.
(Laughter)
Of course, this tells you something about how we things.
Now think about kids. Imagine I asked you, “How would you sell your kids for?” Your memories and associations and so on. people would say for a lot, a lot of money.
(Laughter)
On good days.
(Laughter)
But imagine was slightly different. Imagine if you did not have your kids. And day you 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 you were to leave, the parents said, “Hey, by the way, just before 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 valuable, not just because of who they are, but because of us, because are so connected to us, and because of the time connection. By the way, if you think IKEA instructions not good, what about the instructions that come with kids, those really tough.
(Laughter)
By the way, these are my kids, which, of course, are and so on. Which comes to tell you one more thing, which is, much our builders, when they look at the creature of creation, we don’t see that other people don’t see things our way.
Let say one last comment. If you think about Adam Smith versus Karl Marx, Adam had a very important notion of efficiency. He gave an example of a factory. He said pins have 12 different steps, and if one person does 12 steps, production is very low. But if you get one person to do step one, one person to do step two and step three so on, production can increase tremendously. And indeed, this is a great example, and the reason for the Revolution and efficiency. Karl Marx, on the other hand, that the alienation of labor is incredibly important in how think about the connection to what they are doing. And you do all 12 steps, you care about the pin. But if do one step every time, maybe you don’t care as much.
I think that the Industrial Revolution, Adam Smith was more correct than Karl Marx. the reality is that we’ve switched, and now we’re in the knowledge economy. can ask yourself, what happens in a knowledge economy? Is efficiency still more than meaning? I think the answer is no. I that as we move to situations in which people to decide on their own about how much effort, attention, caring, how connected they to it, are they thinking about labor on the way to work, and in the shower so on, all of a sudden Marx has more things to say to us. So when we think labor, we usually think about motivation and payment as the same thing, the reality is 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 components and thought them — how do we create our own meaning, pride, motivation, how do we do it in our workplace, and the employees — I think we could get people to be both more productive happier.
Thank you very much.