How Monetary Rewards Can Demotivate Creative Works

from the it's-the-link dept

Back in April, I wrote a post about Daniel Pink's new book, Drive, in which he highlights the rather stunning amount of counterintuitive research that suggests that money can actually make people less motivated to do creative works. Since then, I got a copy of the book myself, but it's in the stack with about five books that I want to get to before it, so I may not get to it for a while. However, a lot of folks have been passing around this great video of a 10 minute presentation that Pink did, which was then whiteboard animated. It's really well done and fun to watch and basically summarizes the idea in the book:
The same point is made in the presentation, but it clarifies it a bit. It's not that money isn't important. That finding would make little sense at all. As people note all the time, you need to be able to make money to survive. But, it's that once people have a base level of money that makes them comfortable, using monetary incentives to get them to do creative work fails. Not just fails, but leads to worse performance. As we noted in the original blog post about this, my initial inkling was that this highlighted a point often forgotten by economists and non-economists alike: while marginal benefit is often considered in terms of dollars, that doesn't mean that cash is the the equivalent of marginal benefit. That is, you can't just replace other benefits with cash. Sometimes people value other types of rewards even greater than the equivalent in cash. And, Pink's book and presentation highlight how it's often things like meaning and working on something fulfilling that are much more beneficial to people than cash. So it's not that money is bad for creativity -- but that having a direct pay-for-performance type scheme seems to create negative consequences when it comes to cognitive work (it works fine for repetitive work, however) -- and other types of non-monetary rewards are a lot more effective.

And while it isn't discussed in the presentation (and I don't know if it's discussed in the book), I wonder if the high monetary rewards in a "if you do this task, we'll give you $x amount" manner actually has a strong cognitive cost. That is, the pressure to then do the task well in order to "earn" that money actually ends up causing a creativity cost that takes away from the output. When you're just doing creative work for non-cash rewards, the pressure doesn't feel quite as strong. When you put the dollar signs in, it adds mental costs, and those costs outweigh the cash rewards. It's even possible, then, that the higher the cash reward, the greater the mental costs.

Related to all of this, Clay Shirky has also just come out with a new book, Cognitive Surplus (which isn't yet in the pile on my desk, but probably will be soon) that builds on an idea that he's talked about for years: about how all these claims that people doing stuff online for free is a "waste" totally misses the point. For the past few decades, people have devoted billions of hours to watching television. Yet, with the internet, rather than watching TV, they're actually doing some creative work (sometimes for free). So when looked at in isolation, doing stuff for free may seem weird, when combined in the larger scheme of things as a substitute for mind-numbing TV watching, it's actually a huge advancement.

Wired had the smart idea of having Shirky and Pink sit down and chat with each other, and they rehash some of these ideas, and how the concepts put forth in the two books seem to overlap. Moving people away from merely consuming content towards creating content leads to a huge boost in creativity and creative output -- exactly what we've seen happening. And, it's not because of monetary incentives -- in fact, it's often because of the exact opposite.

The more you think about it, the more this all makes sense, and the more you realize just how screwed up so many incentive structures are today, because so many people think that purely monetary incentives work best.

Filed Under: behavior, clay shirky, daniel pink, drive, economics, money, motivation


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  1. icon
    Suzanne Lainson (profile), 6 Jun 2010 @ 2:00pm

    A detailed review of the book

    Here's a review of the book posted on Amazon (it's at the top of the reader reviews when I click on Amazon, not sure if it will be same for you, but I have linked directly to the review) and it appears to cover both the strengths and weaknesses of the book. Below is just an excerpt. The actual review is quite a bit longer.

    Amazon.com: Walter H. Bock "Wally...'s review of Drive: The Surprising Truth About What Mot...: "The examples that are used are heavily weighted toward academic and consulting studies. It's not apparent that Pink talked to a single worker or frontline supervisor. The book would have been more helpful if he had.

    There are some pre-requisites to having intrinsic motivation kick in. Pink mentions in passing that there needs to be fair compensation in place. That's true, but it's not an 'oh-by-the-way' point. It's Maslow's Hierarchy in work clothes.

    Throughout the book, Pink equates 'monetary' incentives with 'extrinsic motivation.' That ignores praise, promotion, preferment (in scheduling, eg), the admiration of peers, time off, and a host of other positive incentives. It also skews the discussion toward academic studies and away from the real workplace.

    Pink also presents the issue as if it were intrinsic motivators (good) versus extrinsic motivators (not good). In the TED talk he even says 'This is the titanic battle between these two approaches.'

    That's not how things work in the real world. Intrinsic and extrinsic motivators and their effects interact. You don't have a simple choice of which lever to pull. You have to understand and influence a complex system."

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