Mike Lehr's Blog

In Part 4 of this series, I discussed the positivity of intrinsic rewards in the workplace. Let’s now address the negative impact of monetary motivations which are the primary extrinsic reward in today’s business world.

As Yochai Benkler in his article “The Unselfish Gene” of the July-August 2011 issue of the Harvard Business Review writes on page 84:

Whenever you design a policy that relies on monetary rewards, you have to assume that it will have side effects on the psychological, social, and moral dimensions of human motivation.

While it might be easy for us to see how monetary rewards encourage us to pursue our selfish interests, it’s difficult to see their deeper negative side effects. For instance, in many ways incentives encourage us to feel no better than rats in a maze. Rats seek out the cheese to guide them successfully through the maze. A right turn returns cheese while a wrong one does not. When businesses help employees navigate the maze of their business plans, making the “right” turns brings monetary rewards. When they make the “wrong” turn, the cheese is not forthcoming.

Now, many will claim, “I don’t feel like a rat.” However, as we come to understand ourselves better, we find much of this affects us subconsciously. We see this whenever we jokingly refer to the business world as the “rat race,” the “dog-eat-dog world,” or other similar descriptors. Of course, as Lily Tomlin pointed out, “The trouble with the rat race is that even if you win, you’re still a rat.”

This isn’t to say we eliminate monetary rewards. It’s similar to eating; people require diverse foods to be healthy, so they also require diverse motivations for their professional health. In other words, we can’t create a cooperative culture on money alone.

Other links in this series:

• Cooperation vs. Competition on the Business-to-Business Level
• Cooperation vs. Self-interest: Which Reigns Supreme?
• Cooperation vs. Self-interest (Pt 2): Context – The Great Influencer
• Cooperation vs. Self-interest (Pt 3): Empathy
• Cooperation vs. Self-interest (Pt 4): Intrinsic Rewards
• Cooperation vs. Self-interest (Pt 5): Humans vs. Apes

We know each of us is different; however, the degree of difference is clearly underestimated. We experience this whenever we exclaim we cannot understand why someone does something, whenever anyone gets thrilled or appalled over something we don’t. I once worked with a sales manager who found it incomprehensible that a sales person wasn’t motivated by money.

As an example of how different we can be, I posted a while back that the ability to praise was a function of personality. This is an easy, enjoyable event for some and quite an arduous for others. In the November/December 2011 issue of Scientific American Mind, I found another example of our vast differences when I read Lauren F. Friedman’s article, “I’m Not Sorry”, citing the work,  The Disposition to Apologize, of Andrew Howell and his colleagues at Grant MacEwan University. As examples, Friedman mentions some people who have difficult apologizing. Those who possess:

• A low degree of compassion and agreeability
• Low self-esteem
• An overly grand view of themselves (very egocentric)
• A strong sense of justice

The point is that we can approach any human attribute – praising, apologizing, intelligence, athleticism, dedication, nurturing, courage, trustworthiness, relentlessness, sensitivity or any countless others – the same way: each having a myriad of variations and intensities across all humans. For instance, we know there is a difference between men and women, but “How big is that difference?” I often suggest to people that they imagine differences between any two people to be ten times greater than they think they are.

Again, this shows up when we can’t fathom why someone would think or do something and when we believe their “cure” is quite simple: “Just do what I do!” Both are signs of greatly under appreciating how different we are.

Intrinsic rewards are important aspects of creating a cooperative work culture. However, such rewards are difficult to understand and teach. Moreover, many, many people just don’t believe they are that powerful. Yochai Benkler in his article “The Unselfish Gene” of the July-August 2011 issue of the Harvard Business Review endorses the importance of intrinsic rewards in cooperative cultures.

Essentially, as we saw in the second post of this series, most people enjoy being cooperative, enjoy helping others; but, this enjoyment will dissipate if we ignore, discount or unreinforce it. Using effective, intrinsic, morale building techniques and compliments while working to minimize selfish extrinsic motivations such as money will ensure this won’t happen.

Since intrinsic rewards by nature are less tangible, it’s often difficult for managers and leaders to understand and appreciate the internal motivations of others, especially if they by nature don’t receive tremendous enjoyment from helping others. Nevertheless, here are a few tips for encouraging a cooperative workforce:

• Thank employees when they help others (letting them know it’s important to you)
• Demonstrate how they have helped you or others (it’s not always apparent to them)
• Recognize that they naturally enjoy helping others (reinforcing their internal motivation for helping others)
• Show how their job helps others to do theirs when performed well (creating a personal connection between their job and others)
• Hire and promote people who enjoy helping others (the desire to help others is a function of personality)
• Believe that people enjoy helping people (we cannot promote cooperation if we don’t believe it’s a motivation)

These tips will be uncomfortable at first but regularly applied they will produce positive effects over the long run. Thus, they require relentlessness, discipline and almost a fanatical belief in the power of cooperation.

Other links in this series:

• Cooperation vs. Competition on the Business-to-Business Level
• Cooperation vs. Self-interest: Which Reigns Supreme?
• Cooperation vs. Self-interest (Pt 2): Context – The Great Influencer
• Cooperation vs. Self-interest (Pt 3): Empathy

As we saw with pigeonholing and tasting food, context influences us greatly. This extends to people’s inclinations to collaborate. In support of this, the July-August 2011 issue of the Harvard Business Review has Yochai Benkler’s citing in his article “The Unselfish Gene” the work of Lee Ross from Stanford University. He found people being more inclined to collaborate if the context of the effort promotes it.

That’s why leadership that manages, operates and communicates with the implied assumption that employees are essentially motivated by “What’s in it for me” will tend to foster a less collaborative culture than leadership doing the same against a backdrop of collaboration. From an everyday perspective, this means the culture that heavily relies upon extrinsic rewards such as money, awards and perks for individual performances will tend to be less collaborative than the one relying upon intrinsic rewards such as the enjoyment of working with and helping others. Mastering morale builders that don’t cost a cent go a long way in helping here.

This doesn’t mean we eliminate monetary rewards for individuals, but it does mean we focus more on the culture we are promoting in our businesses; culture is context. However, the promotion of that culture must be real. If employees sense a divorce between words and actuality, then the context for collaboration falls, thus causing most employees to resort to self-interested behavior.

Using intrinsic rewards to buttress a collaborative context is involved. In addition to mastering morale builders, it means mastering compliments. Understanding and appreciating the different kinds will help us see how intrinsic rewards differ from extrinsic ones. It’s only by mastering these on an interpersonal level will we be able to extend it throughout our companies and organizations.

Other posts in this series:

• Cooperation vs. Self-interest: Which Reigns Supreme?

Thanking employees periodically for doing their jobs generates a superior return on our time. It’s an effective cost-containment technique for our labor cost; the less employees like the culture the more money it will take to keep them. Consequently, no employee should go more than three to six months without an executive or senior manager thanking him for his work.

Moreover, Thank You’s power extends beyond the immediate employee. She will assuredly talk to other employees about her experience, thus producing a ripple effect. We are making the company’s grapevine work for us.

Here is a simple, direct thank you:

Hi, Tom. How are you? Listen, I just wanted to thank you for the work you’ve been doing for me. I appreciate it. You’ve really been helping us out.

Often, employees will respond with something like:

Well, I’m just doing my job.

To which we can respond with:

Perhaps, but I know that you don’t have to show up and you don’t have to apply your total effort. So, I’m thanking you for those things too.

Occasionally, I’ve heard executives and managers say:

• If they don’t like it, there’s the door!
• Why should I do this when their paycheck is our thanks?

First, employees are under no legal obligation to show up for work; we cannot sue them for not showing. We avoid headaches when they show. Second, every company issues paychecks; every company does not issue thank you’s. They give us a competitive edge in securing and keeping talent. Third, if money is the only way we show appreciation, then money will be the only thing that motivates them. Thank you’s allow us to develop and leverage personal connections. These build a team culture and make goals more achievable.

A commenter inquired why the “good job” compliment isn’t intrinsic since “doing that good job comes from inside a person (an experience, or a value); it’s not something that can be taken away.” There are three main reasons. They also serve to explain why the compliment, while acceptable, is inferior to other compliments.

First, “doing a good job” is different from the “desire to do a good job.” Performance exists outside of us, desire within. People perform well for many reasons beyond the desire to do a good job: money, recognition, promotion, peer pressure etc. For example, two children can read the same difficult book; however, there is a difference between the child who reads the book for a promised candy bar and the other child who reads it for the love of reading.

Second, the determination of a good job is subjective; it varies by the person establishing standards and evaluating outcomes against those standards. You can “take away” a good performance by simply using a different evaluator. For example, other teachers might not consider the above book’s difficulty worthy of compliments.

Third, the product of a good job can be erased. A good painting could be destroyed, a good program terminated, and a good sales year erased with the start of a new one. “What have you done for me lately,” exemplifies the negation of performances. In the above example, the child’s reading of the difficult book might elevate his grade this period but won’t for the next one. However, the love of reading continues on.

Yes, the “good job” compliment is adequate. However, “Reading that book shows that you have a natural love for reading,” is far better. Again, it’s because we are complimenting a quality of the person (intrinsic) versus an outcome (extrinsic).

Recently, as I’ve heard on many occasions, someone said “This isn’t personal, it’s business.” A critical assumption underlying an intuitive approach is that everything we do, think or say says something about us. In short, everything is personal. Business is no different; it can tell you much about a person.

The advantage business gives us in assessing personalities is the financial tradeoff it encourages. The stress this often creates allows us to see deeper into people than otherwise possible. When someone says, “This isn’t personal, it’s business,” he is saying the decision is very personal to him. It’s a form of protesting too much. The statement is just the rationale he chose to emotionally justify his decision.

However, we can’t assume that such a statement automatically implies any particular emotions. For example, they could have a miserly orientation or they could be rooted in strong feelings for providing for his family. Many other types of emotions could be at work. Without context, it’s impossible to tell.

Nevertheless, the key point is to realize that this person has one or more emotions that are strongly connected to money. To him, money is very personal. Once you know what these emotions are, money becomes an excellent vehicle by which to influence him.

A CEO of a 150-employee services company made this astute observation: processes reduce the need for top talent, and thus, reduce labor costs. This company requires highly talented professionals to deliver its services. Historically, management allowed them to work without defined processes because the employees knew what to do. However, as the company grew, finding such talent became harder and more expensive.

Processes become the path to training and developing in-house talent. They are analogous to painting by numbers or following recipes in cooking; they improve the output produced by individuals who don’t have a grasp on the entire work. However, just as we wouldn’t confuse painting by numbers with being an artist and following a recipe with being a chef, we shouldn’t confuse executing the steps of a process with being talented. Processes allow the breakdown of a task without necessarily needing to understand the task itself. It’s like following a series of directions; you don’t need to know your destination.

Since an employee doesn’t need to understand the whole task to follow a process, he does not need the talent that that understanding requires. Essentially, the process is making the decisions for him as embodied by its rules and procedures. As a result, the company does not have to pay a premium for that talent.

Since intuition is rooted in emotions and thus subjective, intuitive approaches allow us to see a single, objective situation as many. We see this most clearly when we tap two distinct, opposing emotions such as the fear of loss versus the joy of gain. The first is generally stronger in people than the second.

In the January 16, 2010 edition of The Economist an article titled “Designing Rewards – Carrots Dressed as Sticks” reported on a paper by Tanjim Hossain of the University of Toronto and John List of the University of Chicago outlining how they made a bonus plan more effective without changing one thing about the plan (i.e. more money, shorter time frame). Rather, they simply changed the wording of the letter outlining the plan’s details.

To one group, they communicated it in the traditional way: hit this target by the end of the week and earn the bonus. However, to another group they said that employees had “provisionally” earned the bonus but would lose it if they did not hit their targets; thus, pitting the “joy of gain” against the “fear of loss.”

Cognitively, objectivity says no difference exists. However, Hossain and List found that the second approach (fear of losing the provisional bonus) was much more motivational than the traditional approach (joy of gaining the bonus). Moreover, the motivational difference persisted over time even after employees understood the bonus better.

In effect, by tapping into the way people intuit different emotions (fear and joy) a single bonus plan becomes two distinct ones. That is the multiplying effect of an intuitive approach.

Intuition’s most practical advantage to problem solving is the enhanced sphere of good solutions it offers. Generally, this sphere will produce five types of benefits. They will appear as solutions that can:

1. Address seemingly intractable problems
2. Save a tremendous amount of money
3. Reduce work and headaches to employ
4. Reach higher levels of effectiveness
5. Make objective- or scientific-based solutions better

Let’s look at some examples.

We can solve many customer service problems without necessarily solving them directly; we do it by listening, sympathizing and encouraging venting. We can save a tremendous amount of money on moral building efforts; we do it by employing our personal power to remember names, shake hands and extend “thank you’s” which don’t cost a cent. We can reduce the work and headaches involved in disciplinary efforts; we do it through the power of asking and of positive reinforcements. We can reach higher levels of effectiveness in change initiatives; we do it by organizing those emotionally adapt at change and by using compliments to encourage them. Any software rollout becomes better; we do it by selling the effort rather than commanding. Any training becomes better; we do it by influencing expectations beforehand and not just focusing on content and delivery during.

All these solutions employ emotional elements. Listening, sympathizing and venting encourage customers to feel better about a problem. Our personal power encourages employees to feel better about us at no cost. Asking and reinforcing encourages people to feel better about changing their behavior. Uniting emotionally similar people and complimenting them encourages them to feel better about change. Shaping how people feel about software and training encourages them to adopt the new practices.

In short, changing how people feel opens a vast, new sphere of solutions to the problems we face.