Are you relying on the old “carrot and stick” approach to motivate your team? It might be time for a rethink. While rewards and punishments seem intuitive, a wealth of research reveals a surprising truth: for complex, creative work, traditional incentives often backfire. This is especially critical to understand in fields like software engineering, where innovation and engagement are paramount. We need to move beyond outdated motivational models and understand what really drives people.
The MIT Study: When Big Rewards Lead to Worse Results
Groundbreaking research #1 from MIT’s economics department #2 demonstrated a counterintuitive effect. Economists designed experiments where students tackled various tasks, incentivized by small, medium, and large cash prizes. For tasks requiring mechanical skills – straightforward, rule-based activities – the expected happened: higher pay led to better performance. Classic “carrot and stick” in action.
But when the tasks shifted to require even rudimentary cognitive skills – problem-solving, critical thinking – the results flipped. Larger rewards led to poorer performance. Yes, bigger bonuses actually hindered people’s ability to solve more complex problems. This wasn’t a small, isolated study either; it was rigorous research from top economists, funded by the Federal Reserve Bank, challenging core assumptions about motivation.
Cross-Cultural Confirmation: India’s Stark Results
Skeptical? Researchers replicated the study in rural India, where the reward amounts were proportionally much larger relative to income (weeks to months of salary). The outcome? Even more striking. The group offered the highest potential reward consistently performed the worst on cognitive tasks. This cross-cultural confirmation underscores that this isn’t just a quirk of Western students; it’s a fundamental aspect of human motivation.
The Key Difference: Algorithmic vs. Heuristic Tasks
Why do rewards backfire for complex tasks? It boils down to the type of work:
- Algorithmic Tasks: These are routine, rule-based, and have a clear path to a solution. Think assembly line work or repetitive data entry. For these tasks, “if-then” rewards (“If you do X, then you get Y”) can be effective in driving efficiency and output.
- Heuristic Tasks: These are complex, creative, and require problem-solving, exploration, and thinking outside the box. Software development, design, marketing strategy – these are heuristic tasks. For this type of work, external rewards can actually narrow focus, stifle creativity, and diminish intrinsic motivation – the internal drive to do something for its own sake.
Pay People Enough: Making Money a Non-Issue (For Daily Motivation)
Let’s be clear: fair pay is essential. People need to be compensated adequately to feel valued and secure. However, the science shows that money is most effective as a baseline satisfier, not a primary motivator for complex work. Pay people enough to take money worries off their minds. Once that foundation is in place, other factors become far more powerful in driving engagement and high performance.
The Real Motivation Trio: Autonomy, Mastery, and Purpose
So, ditch the oversized carrots. Instead, focus on cultivating these intrinsic motivators:
- Autonomy: Give people control over their work, their time, and their approach. Example: Atlassian’s “24-hour days” empower developers to self-direct their work, leading to unexpected innovation and problem-solving. Trusting your team with autonomy signals respect and unlocks their potential.
- Mastery: Support your team’s desire to improve their skills and become experts. Provide opportunities for learning, growth, and challenging projects. Example: The open-source movement thrives on mastery. Highly skilled volunteers contribute to complex projects like Linux because they are driven by the challenge and the opportunity to hone their skills and contribute to something significant.
- Purpose: Connect your team’s work to a larger mission, a meaningful goal beyond just profit. Example: Companies that articulate a clear and inspiring purpose, like Skype’s aim to improve global communication or Apple’s vision to “put a ding in the universe,” tap into a powerful source of motivation. When people feel their work matters, they are more engaged and committed.
Moving Beyond Outdated Models: Towards a Human-Centered Workplace
The science is clear: we are not simply motivated by external rewards, especially when doing complex, creative work. To truly engage and inspire our teams, we need to move beyond the outdated “carrot and stick” mentality. By fostering autonomy, supporting mastery, and connecting work to purpose, we can build organizations that are not only more productive and innovative but also more fulfilling and human-centered.
What are your thoughts? How do you see autonomy, mastery, and purpose playing out in your workplace? Share your experiences and ideas in the comments below – let’s learn from each other and build a better, more motivating future of work!
#1: Review of Economic Studies, Volume 76, Issue 3, July 2009, Pages 969–993.
#2: Authors: Dan Ariely (then at Duke University, later at MIT), George Loewenstein (Carnegie Mellon University), and Drazen Prelec (MIT and later at MIT).
Great post! The studies were well summarised and explained, got the point across very well.