Rethinking how we run our businesses.

September 12, 2009 2:35 AM

Dan Pink gives Ted Talk.

Career analyst Dan Pink examines the puzzle of motivation, starting with a fact that social scientists know but most managers don't: Traditional rewards aren't always as effective as we think. Listen for illuminating stories -- and maybe, a way forward.

posted by RoseyD (22 comments total)

I think he seriously overestimates the amount of work in the world that requires conceptual reevaluation. I think he seriously underestimates the number of people who will disengage in a large enough company. The only people who can actually use his suggestions are the type of people who work in R&D and attend TED talks.
posted by FuManchu at 4:04 AM on September 12, 2009 [3 favorites]

Is it wrong of me that I keep hoping Ted Danson will show up and do a big TED Talk?

"Lessons I learned being a farm league pitcher and working a bah."
posted by cavalier at 4:12 AM on September 12, 2009 [1 favorite]

Also, for the studies he cites about the candle problem. Those are very short term, and would be affected by things like adrenaline.

Corporate financial incentives are usually long-term. For CEOs and managers, its years and years (using options and restricted stock). They are usually to ensure profitable decision-making and that they do not leave. They are not meant to ensure creativity.

At the other end at say a call-center, again, the incentives are to ensure stable decision-making and not much else.

Who the hell is supposed to be talking to outside of TED geeks?
posted by FuManchu at 4:39 AM on September 12, 2009

Corporate financial incentives are usually long-term.
Wrong.

At the other end at say a call-center, again, the incentives are to ensure stable decision-making
Wrong.
posted by Sitegeist at 4:49 AM on September 12, 2009

Corporate financial incentives are usually long-term.
Wrong.
Explain?

At the other end at say a call-center, again, the incentives are to ensure stable decision-making
Wrong.
Explain?
posted by Wink Ricketts at 5:27 AM on September 12, 2009

Fullscreen transcript.
posted by vapidave at 5:50 AM on September 12, 2009

Is it wrong of me that I keep hoping Ted Danson will show up and do a big TED Talk?

Ohh ohh, and he does the talk as a minstrel show!
posted by sammyo at 5:52 AM on September 12, 2009

Fascinating talk. The science of motivation is one of intense interest to me and I appreciate any article, lecture or iota of insight into this significant topic. Thanks for the post RoseyD.
posted by nickyskye at 6:48 AM on September 12, 2009

One person, faced with evidence suggesting that some other people is doing a similar quantity and quality of work (or less of it or apparently less fatiguing) but getting more money than he/she does, doesn't stop working to look for a different one. Why?

This could be explained as follows: the person feels that something is wrong, but needs to explain to self "why am I still stuck with this job and not looking for others?".

If the amount of money received is close to mere survival (or perceived as such) one could think that he likes the job and that is why he's still at the job, while other factors such as fear of losing a source of income, perceived difficulty of obtaining an equal or better job, uncertainity about the future working environment play quite some role in deciding not to switch job.
This thinking helps the person shield from unpleasurable sensation of having lost control or self or being indequate (not a "winner"), so that this behavior may be explained as a psychological defense mechanism.

If the amount of money received is well above mere survival (or perceived as such) or even extraordinarily high, the person may still not feel comfortable at the job, perhaps because the pressure to achieve goals is likely to be very high, taking all the time from any other activity, the working environment may also be highly competitive (your loss is my gain) and paranoia starts to take a toll on everyday performance, maybe reinforced by occasional real backstabbing practices.

While the person clearly feels that he would change the job in a blink of an eye because he/she loathes the hellhole he's working in, he may rationalize the choice of not changing job because the amount of money received is very high, as he can't consistently tell to self that he really feels well at the workplace.

So I don't "buy" the notion, so well salespitched by Dan, that giving less reward is going to consistently lead to more creative behaviors, because it's quite simplistic and doesn't appear to be taking into account higher reward for "mechanical" tasks may also be explained by the fact the quantity of money received may be simply a function of quantity of work done.
posted by elpapacito at 6:54 AM on September 12, 2009

"The 20th century came up with this idea of management. Management did not emanate from nature."

Memorandum
Date: 9/12/09
From: Frontal Lobe
To: Parietal Lobe, Occipital Lobe, Temporal Lobe.
Re: Action Request

Please perform the actions necessary to type the word "Bullshit".

cc: ANS, all necessary subgroups.


Joking aside this is another presentation designed to simultaneously appeal to wild fantasies of management ('Here's what the economists there said, "We find that financial incentives can result in a negative impact on overall performance."') and the workforce ("...people don't have schedules. They show up when they want. They don't have to be in the office at a certain time, or any time. They just have to get their work done. How they do it, when they do it, where they do it, is totally up to them. Meetings in these kinds of environments are optional.").

Everyone who just had a teensy orgasm raise your hand.

I am glad that people try to imagine a better work life but the examples he cites can only work for a small minority of positions in a very small minority of fortunate businesses. Pink's presentation amounts to a fantasy salve for worn middle-managers.
posted by vapidave at 7:01 AM on September 12, 2009 [1 favorite]

Oh man, you couldn't pay me enough to spend 18:40 watching this entire presentation... hey, wait a minute!
posted by Mike D at 7:02 AM on September 12, 2009 [1 favorite]

"Corporate financial incentives are usually long-term.
Wrong.
Explain?"

Ok, lets look a little deeper at this; we have to be talking stock options here, as other forms of incentivising staff (cash bonuses) clearly raise problems with Agency Theory in general, and moral hazard specifically. Short term outperformance of a firm by no means implies value has been added long term.

And if we're talking stock options then we can't generalise.

From the IRS' viewpoint, there are two types of options; incentive stock option (ISO) and a nonqualified stock option (NSO), and they differ primarily in tax treatment.

ISO plans allow for taxation at long term capital gains rates. In order to qualify, the IRS require the shares acquired by means of exercising the options be held for at least one year, and the shares are held for at least two years after the option is granted.

NSO transactions are taxed at ordinary income rates, which may be punitive when compared to long term holding rates.

If this helps anyone I'm also familiar with some research by Kedia & Mozumdar (2002) of Harvard and Virginia Tech respectively [ .pdf [ who looked at 200 large, "fast growth" firms to see if there was a correlation between stock option grants and firm value.

It's an interesting paper simply because of their conclusions:

"there is evidence to support the argument that firms’ use of options to retain key employees creates value and is associated with positive abnormal returns. There is also evidence that firms's use of stock options in the face of financial constraints creates value.

However, there appears to be no evidence that use of stock options to provide better incentives in high growth firms is a source of gain in firm performance."

Regardless, I wouldn't consider two years long term, although in banking the average tenure is less than three years. So there you go.

Finally, a big topic these days isn't so much financial incentives, rather employee engagement; in good times everyone worries about absenteeism, and how to prevent it. You can't get the staff to begin with, so you really don't want to initiate disciplinary proceedings against those who are clearly taking advantage (e.g., pulling sickies for precisely the average number of days lost per worker, or repeatedly suffering "Friday flu" and "Monday maliase").

However in recessionary times managers don't have to worry about excessive absenteeism, as everyone is fearful for their jobs so they're at their desk every day .

But now you're got a situation where folks are technically at work but not fully engaged. This is a problem because disengaged workers are disruptive to the entire organisation, either directly because they are letting the team down, or indirectly as shirking 1) gets noticed and 2) is remarkably contagious .

Some researchers cite data showing that in recessions we see typically staff engagement levels structured as 20/60/20, or 20% of staff is actively, fully engaged in work, giving it their all, 20% couldn't give care less and are at work in body only doing absolutely nothing, and 60% are in an anomalous, in between state, just coasting by, doing the bare minimum.

If a good manager can pull even small percentages of the undecided into a higher state of engagement then organisational productivity and hence shareholder value skyrockets.

That's the real challenge these days.

And financial incentives? Well, maybe its because I work in and have managed people in banking, but you really don't want to be buying people. Give someone a 100% bonus and 20% raise for a job well done, and they'll use it against you next year when times are tight and you'll lose because the bank across the street will be doing fine. And no matter how much you give them, year after year, folks eventually get bored and they'll present this package as the price to their next employer who will be happy to pay it, and you'll lose again.

But if you're the kind of manager that instills a sense of shared purpose and loyalty in your staff, well, they'll be working so hard your biggest problem will chasing them out of the office every night. Turnover will approach zero as folks aren't working for the money, they're working for the manager.

Interesting presentation - thanks
posted by Mutant at 7:14 AM on September 12, 2009 [7 favorites]

"We find that financial incentives can result in a negative impact on overall performance."'

Cost of registration for TEDIndia this year: $2000, or roughly twice the average yearly income. Don't want those TEDsters to get too motivated!
posted by vanar sena at 7:37 AM on September 12, 2009 [2 favorites]

but you really don't want to be buying people. Give someone a 100% bonus and 20% raise for a job well done, and they'll use it against you next year when times are tight and you'll lose because the bank across the street will be doing fine. And no matter how much you give them, year after year, folks eventually get bored and they'll present this package as the price to their next employer who will be happy to pay it, and you'll lose again.

It's striking how that doesn't seem to be taking personal experience and skills into any consideration, as if the elements of the production chain were modeled to function on the assumption that the next guy will be almost perfectly fungible with the previous, after passing some screening process.
For instance, take accessory skills that are likely to be useful for the business (knowing another language as opposed to be able to dance tango) but not a mandatory request.
How were those assessed, if taken in consideration at all, considering that the next guy may be less likely to have these additional relatively scarce skills?
posted by elpapacito at 8:58 AM on September 12, 2009

Corporate financial incentives are usually long-term.
Wrong

Okay, Mutant gave a great explanation, but let me correct that to: Corporate financial incentives are usually designed to be long-term. Financial firms, when recruiting, are also known to provide a signing bonus equivalent to all of the accrued yet illiquid bonuses from the previous firm. But then those are also usually only "long term" until the next leap comes.

Anyway, I think my original point was missed: that Pink's dig at financial incentives in the real world was off base. Those are not incentives for creative thinking and problem solving. They are incentives to not leave and not massively screw up in the next year, at least. Which renders his criticism of them moot.
posted by FuManchu at 9:52 AM on September 12, 2009

I don't know, people are doing a lot of work already. How much more work does he think needs to be done?

I think the vast majority of people work because they need the money. Once there there, I guess they can be motivated more but even if money doesn't motivate them, not sharing the benefits of their increased productivity is kind of unfair. So simply saying "we're not going to pay more for better work, because on balance it doesn't produce much better work" is really just an excuse to keep more money for management.

Corporate financial incentives are usually long-term.
Wrong.

There are really two different cultures, the 'wallstreet' culture where you get a huge bonus at the end of the year if you increase the balance sheet, and the 'sillicon valley' thing where people get stock options to try to make the company more profitable. It really depends where you work.
posted by delmoi at 11:41 AM on September 12, 2009

Interesting ideas. Terrible presentation!

Also, I couldn't quite follow the logic from the first bit about incentives to the triplet of "Autonomy, Mastery, Purpose". Just because incentives aren't the be all and end all, that does not imply that those other things are.

I do wonder how a ROWE works in terms of things like collaboration. I guess the trick is defining "results" well enough. If you define them narrowly enough, I guess it approximates to old-style management: "Result: show up at desk by 9:30 Mon-Fri: Achieved".

I would be interested to see a point-by-point demonstration that "Autonomy, Mastery, and Purpose" leads to better performance, because I'd like it to be true, and I suspect it is, but the whole damn thing fell apart at that point.

Also, I'm pretty sure that his idea is utopian, because I'm pretty sure people would be as eager to subvert that style of system as they are every other system of management. Mutant has it right: it's about the manager, and I don't think "being a good manager" is going to be a formalised, rules-based procedure any time soon.
posted by Wrinkled Stumpskin at 12:16 PM on September 12, 2009

What would motivate me is being treated like a human being, not a robot to be programmed so that he and the company can put more money in their pockets without sharing any of it with me. A "thank you" would be nice too. And maybe double my salary and I'll ignore everything I just said. But the thing that would really get me motivated would be a company policy that allowed me to take paid time off and go fishing anytime I got the notion.
posted by Mike Buechel at 12:37 PM on September 12, 2009 [1 favorite]

I personally would like the paramedics to show up shortly after I call 911 and 911 lets them know where I am, not when they feel like picking me up to take me to the hospital. Ditto for the doctors, nurses, the pharmacists, the custodial staff, the guy managing the mini-mart, receptionist at the foundation who answers my silly questions about grant applications, and the vast number of people who don't have jobs where you "do your work and leave" and I'm not big on the aforementioned workers having their own side project they take days off for. The vast majority of jobs would not be able to be done if they were completely autonomous. This leads me to wonder, what percentage of jobs could work like this? I'm thinking the ones that could, already do.
posted by anniecat at 1:03 PM on September 12, 2009

It's worth pointing out that the basis of Dans' talk is more than mere speculative drivel. As noted in the comments section of the Ted site :

Great stuff, but it would have been appropriate for Pink to attribute the key elements of his intrinsic motivation model to the scientists who developed them. Self-Determination Theory was developed by Ed Deci and Richard Ryan at the University of Rochester in New York. Pink's model is only slightly different than theirs, which proposes that human motivation is activated and directed by autonomy, competence, and relatedness (particularly "autonomy support," which is a type of relatedness that supports autonomy and competence). Ed and Rich (I was a grad student of theirs, so I think they'll forgive the familiarity) did research starting back in the 1970's using their model in a number of areas, including education, business, sports, relationships, and health care behavior change. If you want to deepen your understanding of this motivational model and how it applies to real world situations, the U of R website on the theory can be found at www.psych.rochester.edu/SDT

Daniel Pink:

Albert -- Thanks for this comment. As it happens, this talk was based in large part on a book that's coming out in December. And the book discusses Deci's and Ryan's pioneering work in enormous detail. (In fact, the title of the introduction is "The Puzzling Puzzles of Harry Harlow and Edward Deci.") You'll find citations of their work, descriptions of their studies, and interviews with both of them in half the chapters. Look for it in December.

Cheers,

Dan

posted by RoseyD at 2:08 PM on September 12, 2009 [1 favorite]

Good talk, really interesting insights. Remember people, this may not apply to every single position in every firm, but it applies to many; perhaps more than you think.
posted by Mister_A at 7:35 PM on September 12, 2009

Also, the examples given represent the extreme end of the autonomy spectrum. You can give people autonomy short of saying "show up whenever you want." I manage people and they always perform better when they have a sense of ownership over what they do.
posted by Mister_A at 7:37 PM on September 12, 2009