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. identicon
    Anonymous Coward, 6 Jun 2010 @ 3:26pm

    Re: Yes, star trek utopia - where's the synthathol ?

    "And ive been trying to think of actual real examples of invention or innovation that is not financially motivated"

    Just because money is a motivating factor doesn't mean monopolies are necessary.

    "but things were simpler than, the cost of training, and equipment, and living is much higher now."

    Not necessarily. Thanks to technology a lot of things are simpler now. Traveling long distances is simpler, ordering stuff or looking for things across the country is simpler, finding information that you want is simpler. back in the days you needed serious experts and experienced librarians to track down the things teenager can find on Google today. Heck, back in the days programming was not simple but now script kiddies, teenagers, are able to write sophisticated programs because the languages are much simpler. Operating systems are simpler to use, word processing is more efficient, skills that pretty much everyone knows how to sue and require no training now a days pretty much required specialized experts a long time ago (ie: a typewriter was a valued position, now everyone types). Back in the days if you turned in a thesis statement and the reviewers found a mistake ... it might cause you to retype the entire thing or a large portion of it to make the correction. Now you open word processor, make some corrections, print it out, presto. Same thing for anything typed in order to make corrections. Many things are FAR SIMPLER now than ever before. Software is user friendly, you don't have to know EVERYTHING off the top of your head, you can search for it very quick on a search engine.

    "latest mobile phones, high speed internet, high speed computers etc"

    They maybe financially motivated to some degree, sure, but that's not to say that monopolies are necessary for advancement. Heck, the very reason why the United States is falling behind in broadband is because our politicians have been coerced into granting big corporations monopoly power over who can compete on existing infrastructure and who can build new infrastructure. and, again, much of the technological advancement has occurred exactly because IP was scarcely enforced.

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