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 a maze — that all people care about is money, the moment we give them money, we can direct them to work way, we can direct them to work another way. This is we give bonuses to 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 think about it, there’s all of strange behaviors in the world around us. Think something like mountaineering and mountain climbing. If you read of people who climb mountains, difficult mountains, do you think those books are full of moments of joy and happiness? No, they full of misery. In fact, it’s all about frostbite and having walking, and difficulty breathing — cold, challenging circumstances. And if were just trying to be happy, the moment they get to the top, they would say, “This was a terrible mistake. I’ll do it again.”
(Laughter)
“Instead, let me sit on a somewhere drinking mojitos.” But instead, people go down, and after recover, they go up again. And if you think about mountain climbing as an example, it suggests kinds of things. It suggests that we care about the end, a peak. It suggests that we care about fight, about the challenge. It suggests that there’s all kinds other things that motivate us to work or behave in all kinds ways.
And for me personally, I started thinking about this a student came to visit me. This was one of my students from a few years earlier, he came one day back to campus. And he told me the story: He said that for more than two weeks, he was on a PowerPoint presentation. He was working in a bank, and this was in preparation for a merger and acquisition. he was working very hard on this presentation — graphs, tables, information. stayed late at night every day. And the day before was due, he sent his PowerPoint presentation to his boss, and his boss wrote back and said, “Nice presentation, but the merger is canceled.” And the guy was deeply depressed. Now at the when he was working, he was actually quite happy. Every night he was enjoying his work, he staying late, he was perfecting this PowerPoint presentation. But that nobody would ever watch it made him quite depressed.
So started thinking about how do we experiment with this idea of the of our labor. And to start with, we created a little experiment in we gave people Legos, and we asked them to build with Legos. And for some people, we gave 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, and they built with these Legos. And they finished, we took it, we put it under the table, and we said, “Would you to build another one, this time for $2.70?” If they said yes, we gave them one, and when they finished, we asked them, “Do want to build another one?” for $2.40, $2.10, and on, until at some point people said, “No more. It’s not worth it for me.” This was we called the 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 will take all Bionicles, we will disassemble them, we will put them back in the boxes, and we will use it the next participant.
There was another condition. This other condition was inspired by David, my student. this other condition we called the Sisyphic condition. And you remember the story about Sisyphus, Sisyphus was punished the gods to push the same 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 different hills, at least he have some sense of progress. Also, if you look at prison movies, sometimes the way that guards torture the prisoners is to get them to dig a hole, and the prisoner is finished, they ask him to fill the hole back and then dig again. There’s something about this cyclical version of doing something over and and over that seems to be particularly demotivating.
So in the second condition this experiment, that’s exactly what we did. We asked people, “Would you like to build one Bionicle for dollars?” And if they said yes, they built it. Then asked 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 finished. And 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 building, and us destroying in front of their eyes.
Now what happens you compare these two conditions? The first thing that happened was that people built more Bionicles — eleven in the meaningful condition, versus seven in the Sisyphus condition. And by way, we should point out that this was not big meaning. were not curing cancer or building bridges. People were building Bionicles for few cents. And not only that, everybody knew that the Bionicles be destroyed quite soon. So there was not a real opportunity big meaning. But even the small meaning made a difference.
Now we another version of this experiment. In this other version of the experiment, we didn’t people in this situation, we just described to them the situation, as I am describing to you now, and we them to predict what the result would be. What happened? People predicted the right direction but the right magnitude. People who were just given the description the experiment said that in the meaningful condition, people would probably build one more Bionicle. So people 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 you think about it, there are people who love Legos, and some people who don’t. And you would speculate that people who love Legos would build more Legos, even less money, because after all, they get more internal from it. And the people who love Legos less build less Legos because the enjoyment that they derive from it is lower. that’s actually what we found in the meaningful condition. There was a very nice between the love of Legos and the amount of Legos built.
What happened in the Sisyphic condition? In that condition, the correlation was zero — there was no relationship the love of Legos, and how much people built, which suggests to me with this manipulation of breaking things in front of people’s eyes, basically crushed any joy that they could get out of activity. We basically eliminated it.
Soon after I finished running this experiment, I to talk to a big software company in Seattle. can’t tell you who they were, but they were a company in Seattle. This was a group within the software company that was in a different building, and they asked them to innovate, create the next big product for this company. And the before I showed up, the CEO of this big company went to that group, 200 engineers, and canceled project. And I stood there in front of 200 of the depressed people I’ve ever talked to. And I described to some of these Lego experiments, and they said they felt they had just been through that experiment. And I asked them, I said, “How many of you show up to work later than you used to?” And raised their hand. I said, “How many of you go home earlier than you 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 hands, but they took me out to dinner and showed me what they could do with expense reports. then I asked them, I said, “What could the CEO have done make you not as depressed?” And they came up all kinds of ideas.
They said the CEO could have them to present to the whole company about their journey over the last two years and they decided to do. He could have asked them to think about which aspect of their technology could with other parts of the organization. He could have asked them to build some next-generation prototypes, and see they would work. But the thing is that any one of would require some effort and motivation. And I think the CEO basically did not understand the importance meaning. If the CEO, just like our participants, thought essence of meaning is unimportant, then he [wouldn’t] care. And would say, “At the moment I directed you in this way, and now that I’m directing you this way, everything will be okay.” But if you how important meaning is, then you would figure out that it’s important 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 to find pairs letters that were identical next to each other. That was the task. People did the sheet, then we asked if they wanted to do another a little less money, the next sheet for a little bit less, and so on so forth. And we had three conditions. In the first condition, people wrote their on 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 on the pile next to them. In the second condition, did not write their name on it. The experimenter looked it, took the sheet of paper, did not look at it, did 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 paper, and put it directly into a shredder.
(Laughter)
What in those three conditions?
In this plot I’m showing at what pay rate people stopped. So low numbers that people worked harder. They worked for much longer. In the condition, people worked all the way down to 15 cents. 15 cents per page, they basically stopped these efforts. In 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 out, by the way, that in the shredder condition, could have cheated. They could have done not so work, because they realized people were just shredding it. So maybe the 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 the condition, people could have submitted more work and gotten more money, and put less into it. But what about the ignored condition? Would the ignored condition be more like the acknowledged more like the shredder, or somewhere in the middle? It turns 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 bad shredding their effort in front of their eyes. Ignoring gets you a way out there. The 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 be so difficult. The bad news is that eliminating motivations 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, or eliminating motivation.
The next part I want to show you is about positive motivation. So there is a store in the U.S. IKEA. And IKEA is a store with kind of okay furniture that takes long time to assemble.
(Laughter)
I don’t know about you, but every I assemble one of those, it 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 enjoy those pieces. can’t say 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 cake mixes. So when they started cake mixes in the ’40s, they take this powder and they would put it in box, and they would ask 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. People did not them, and they thought about all kinds of reasons for that. the taste was not good? No, the taste was great. What they figured out was there was not enough effort involved. It was 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 like your own. So what did do? They took the eggs and the milk out of the powder.
(Laughter)
Now you had break the eggs and add them, you had to measure the milk add it, mixing it. Now it was your cake. Now was fine.
(Laughter)
(Applause)
Now, I think a little like the IKEA effect, by getting people to work harder, they actually got them love what they’re doing to a higher degree.
So how do we look at question experimentally? We asked people to build some origami. We gave them on how to create origami, and we gave them sheet of paper. And these were all novices, and built something that was really quite ugly — nothing like frog or 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 to you. How much do you want to pay it?” And we measured how much they were willing to pay for it. we had two types of people: We had the people who it, and the people who did not build it, and just looked at it as observers. And what we found was that the builders thought these were beautiful pieces of origami —
(Laughter)
and they were willing to pay five more for them than the people who just evaluated them externally. Now could say — if you were a builder, do you think [you’d say], “Oh, love this origami, but I know that nobody else love it?” Or “I love this origami, and everybody will love it as well?” Which one of those two is correct? Turns the builders not only loved the origami more, they that everybody would see the world in their view. thought everybody else would love it more as well.
In next version, we tried to do the IKEA effect. We tried to make it more difficult. So some people, we gave the same task. For some people, we it harder by hiding the instructions. At the top of the sheet, had little diagrams of how you fold origami. For some people, we just that. So now this was tougher. What happened? Well in an way, the origami now was uglier, it was more difficult. Now when looked at the easy origami, we saw the same thing — loved it more, evaluators loved it less. When you looked 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 even less. Because in reality, it was even uglier than the 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?” Your memories 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 have kids. And one day you went to the park and met some kids. They were just like your kids, and you played with them a few hours, and when you were about to leave, parents said, “Hey, by the way, just before you leave, if you’re interested, they’re for sale.”
(Laughter)
How much you pay for them now? Most people say not that much. this is because our kids are so valuable, not just 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 with kids, those are really tough.
(Laughter)
By the way, these my kids, which, of course, are wonderful and so on. comes to tell you one more thing, which is, much like builders, when they 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 about Adam Smith versus Karl Marx, Adam Smith had a very important notion of efficiency. gave an example of a pin factory. He said pins 12 different steps, and if one person does all 12 steps, production is very low. But if you get one to do step one, and one person to do step two and step and so on, production can increase tremendously. And indeed, this is a great example, and the reason for Industrial Revolution and efficiency. Karl Marx, on the other hand, said the alienation of labor is incredibly important in how people think about the connection what they are doing. And if you do all 12 steps, you about the pin. But if you do one step time, maybe you don’t care as much.
I think in the 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, what happens in knowledge economy? Is efficiency still more important than meaning? I think the answer is no. think that as we move to situations in which people have to decide on their about how much effort, attention, caring, how connected they feel to it, are they about labor on the way to work, and in the shower and so on, of a sudden Marx has more things to say us. So when we think about labor, we usually think about motivation and payment as same thing, but the reality is that we should probably all kinds of things to it — 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, how do we do it in our workplace, and for the employees — I we could get people to be both more productive and happier.
Thank you much.