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Factors That Lead To Better Performance And Personal Satisfaction

RSA ANIMATE: Drive: The surprising truth about what motivates us


Since childhood, we are taught the value of hard work and that if you work hard, apply yourself and play fair, you will receive your just rewards. If you are irresponsible, take advantage of others and cheat you will have to pay the piper. This idea is the foundation of many business models and entrepreneurial endeavors despite the fact that evidence shows that money is not the great motivator it is believed to be.

The science of motivation includes experiments conducted in the United States as well as countries around the world.  The results of these experiments indicate that a high paying job does not necessarily equate to a highly satisfying job.  It is important for those in management to understand these results because if they want an engaged workforce, money is not the always the answer.

This change in the belief of money as a motivator leads to a questioning of the idea that if you reward something you get more of the behavior that you want and if you punish something you get less of it. Money can be useful for attracting and retaining people, but employees are not easily manipulated by financial rewards during the rest of their tenure. The lesson learned is that money cannot influence long-term behavior.  

Scientists from the University of Chicago, MIT, and Carnegie Mellon conducted a study of motivation sponsored by the Federal Reserve Bank of America.   They asked university students to perform tasks involving spatial reasoning, memorization, and physical activity.  There were three levels of monetary rewards for completion of the tasks, with the best performance being rewarded the most money.


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The results found that as long as tasks involved only mechanical skill, the bonuses worked as expected with better performance driven by higher pay. What the researchers didn’t expect is that when the difficulty of the tasks increased, calling for rudimentary cognitive skill, a larger reward led to poorer performance. The outcome showed that once you get above rudimentary cognitive skill, rewards don’t work as an incentive for better performance.

This outcome went against the typical corporate business model, so to validate their experiment it was replicated in rural Madurai, India where the value of a monetary reward could potentially have a greater impact. What they found was that people offered the medium reward did not perform better than the people offered the small reward and the people offered the top reward, which was two months’ salary, did the worst of all. Once again, higher incentives actually lead to worse performance.

The typical motivation plan in organizations is to pay the top performers more than the underperformers.  If money is not a motivator, what can you do to encourage people to perform to the best of their ability?  There are three factors that lead to better performance and personal satisfaction: autonomy, mastery, and purpose.

1. Autonomy – This is the engagement of self and is the desire to direct our own lives.  In order to foster autonomy, you need to allow for self-direction.  When it comes to money, often an increased salary usually means surrendering some autonomy as you rise through the ranks.  True autonomy as a motivator, is the perception that you are not being micromanaged and have the ability to make your own decisions without having to seek approval.  Giving employees choices and control over their work results in higher job satisfaction and better job performance.

2. Mastery – Mastery is about a sense of progress, in our work and our capabilities. This drive to want to get better at something contributes to our inner satisfaction and is not financially motivated.  There are current business models where people do highly skilled work for free, volunteering their time up to 30 hours a week, and then they give away what they create rather than sell it (Linux, Apache, Wikipedia).  These well-educated people with well-paying jobs are doing equally challenging work in their spare time for free because they are motivated by the challenge of mastery and making a contribution.

For employers, this means calibrating job descriptions, not by what people can do, but by what they have the potential to do. If the job is too difficult, people will become overwhelmed, and if it is too easy, they will get bored.  The trick is to give employees the space and support to continue mastery and growth.


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3. Purpose – Organizations like to have a purpose or mission statement to keep focused on a goal.  Oftentimes, the profit motive becomes detached from the purpose motive leading to an uninspiring profit versus purpose goal.   People are motivated by the desire to work with the goal of serving something larger than themselves.  Stretching goals is easier for employees who are committed because they truly care about the outcome. To really engage your workers, you need to show them how they are helping people and making the world a better place.

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For simple straight-forward tasks that are based on algorithms and rules, monetary rewards do work but when you raise the stakes, motivations change.  When it comes to complicated tasks that require conceptual, creative thinking, money is not a motivator for better performance.  There is a balance that needs to be struck because if you don’t pay people enough they won’t be motivated.  You need to pay people just enough so they aren’t thinking about money and they are focused on the task at hand.

Typical motivation schemes in organizations, reward the top performers and ignore the bottom performers but this old-school model of carrots and sticks is becoming increasingly outdated. Science shows us that an over reliance on monetary rewards invariably erodes emotional commitment. This isn’t an anomaly. These tests have been replicated repeatedly by psychologists, sociologists, and economists.

In today’s world, it takes autonomy, mastery, and purpose to produce a more engaged and productive workforce.  These motivators stand to create a happier workforce that can work together to make the world a little bit better.


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