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), 7 Jun 2010 @ 5:36pm

    Re: Re: Re: Relevant article on the changing nature of art

    What makes Suzanne's post so great?

    She is basically talking about all IP being used in a sort of "mash-up" culture in the future.


    I suppose my take on the situation is that I think in the future the demand for IP-protected material will go down, so there's no need to fuss over the laws too much.

    Take music. The major labels are disappearing anyway, and the unsigned artists are giving their music away. So eventually I don't think there will be anyone left to fight for payment. It will all be free by default.

    In terms of text, there is so much out there that I don't think people will try very hard to gain access to copyrighted material.

    The same with film.

    There's enough freely available creativity at all levels, that who, in the end, is going to pay to own it? When the traditional purchasers of copyright (labels, publishers, film/TV studios) disappear, and the independent artists give it away for free for the exposure, who's going to bother to sue to protect copyright? When everyone is creating their own stuff, who is going to bother to pay for anything? The market won't be there.

    Now, in terms of patents, I can see that this will probably not work itself out quite so easily. For the stuff that is easily invented and duplicated, market forces will encourage knock-offs as there have always been.

    But for the big stakes games where a company has invested millions to develop a concept, companies/investors are going to want to guarantee some sort of return on R&D. They want to "own" something before they put the money upfront.

    I wouldn't mind going to a system where lots of research is done by publicly funded labs and universities and then made available to anyone who wants to use it, but finding the funding for those publicly-funded entities is already hard.

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