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 @ 3:39pm

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

    "Even FOSS, free and open source, which tries to some degree to follow the 'for the love of it' mantra, is certain not an innovation minefield, it's quite good at immitation but innovation,, no so much."

    This is hardly true, not even close. Microsoft copied firefox and linux on so many levels when it comes to Interface design. I even heard a Microsoft programmer admit that they tried a bunch of things when it came to a GUI interface for windows 7 and just wound up copying what linux did, figuring that what they were doing was optimal (it was some GUI feature). Firefox Tabbed browsing and search not getting the search bar in the way was copied by Microsoft. Much of the command line operations for DOS was copied from linux, since linux users are more dependent on command line Interfaces and so they produce better and easier to use command line interfaces (ie: instead of having multiple commands do multiple thing;s, have one command with multiple different way of doing different things so that calling the command will display one help screen explaining more. Microsoft used to have Deltree and Del to do two separate tasks, they copied Linux in terms of having one command doing them both). Lots of innovation occurred in linux long before Microsoft adopted, Linux was earlier to adopt the ability to utilize 64 bit processors, dual processors, etc... In fact, Linux often adopts new ideas first, under beta releases and whatnot, and Microsoft et al much later copies, because Microsoft is more concerned about bugs and not breaking things and backwards compatibility whereas most linux users know how to program and fix their own bugs and will stay with the stable releases for critical operations while messing around with non critical stuff. It's much easier, the environment that Linux fosters, for Linux people to adopt stuff, whereas for Windows there is a necessity for things to be much more stable upon release so catching up to linux is slow.

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