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
    Chunky Vomit, 5 Jun 2010 @ 3:52am

    Interesting concept, I have seen it play out both ways

    My wife is a creative worker. For several years we lived in poverty while she tried to be creative. It was frustrating because she had these artistic ambitions but couldn't really use them. Why? She had to have to work a job where she could make real money so that we could pay our bills (of course, I work too. Just putting that there.).

    A few years ago she started work at a large and well known company working in the President's office as an administrative assistant. Fortunately, he saw that she was misplaced here and that she really ought to be working in the creative department for his company. So, promote and move. More money coming in at home meant less stress and time to focus on projects and practicing the crafts that she was already pretty good at.

    Then she promoted again, still more money coming in, now she has an administrative assistant of her own. Her art work has improved greatly because she isn't as worried about other things. She has people to take care of all the busy work, she can focus more on making the art happen... some of which includes taking time off from the office and enjoying life (vacations!).

    Her partner in the company is different though. He started out as a really good artist, but the more money he makes, the less productive he becomes...

    So I don't know that there is a final answer here, though, it can be said that money does stifle creativity in some ways. Neither of us have to be as creative as we used to be to solve daily problems that arise with lack of income, if something goes awry, hire somebody to fix it. If we lose the incomes we have, it will be interesting to see how we are able to cope with solving issues that were once easier to solve because we weren't as dependent on money to do the work for us.

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