Greater Incentives, Worse Performance – Really!

“There’s a mismatch between what science knows and business does,” Dan Pink persuasively asserted as he made his case at TED for re-examining the use of contingent motivators. His TED talk hit my “sweet spot” in terms of professional concerns more than any other. The evidence from experimental tasks using little more than a candle and a box of tacks is compelling. Extrinsic rewards work well with simple tasks and narrow focus. Beyond a certain point, greater incentives actually lead to worse performance.

The most urgent agendas of the 21st century will be repeatedly undermined if we think we can motivate by incrementally increasing promised rewards for those who tackle them. “If, then, rewards don’t work! It makes me crazy!” Pink exclaimed. Yet we persist in trying to motivate our top talent in business today in ways that seem merely to increase stress and kill passion.

The failure of Encarta, Microsoft’s attempt to launch a virtual encyclopedia, contrasted with the massively expanding phenomenon of Wikipedia, is but one example Pink used to document his case beyond the behavioral experiments. “The building blocks for an entirely new operating system for our economy are: (1)autonomy; (2) mastery; and (3) purpose, “ Dan continued.

I resonate deeply with these principles. From the outside looking in on more than one corporate R&D; function, it seems nearly impossible to find ways to free highly talented, once passionate scientists and engineers, from “processes on steroids”. I just completed writing a paper on “Gaining Employee Committment in Tough Times, Performance and Potential in R&D; Today”. Now that I think about it, in the afterglow of TED, we are positioning some practices with clients that are well aligned with what I heard Dan saying from the TED stage.

“Science knows what our heart confirms.” No wonder I thought this was one of the best talks of the week.