The Surprising(ly Negative) Power of Incentives

I’m a fan of Daniel Pink. I think he does an excellent job breaking down complex business problems and encouraging new ways of thinking about them. I especially like his 2009 book Drive, The Surprising Truth About What Motivates Us, and I keep coming back to it when I think about creating Value.

A key topic of that book is the complex interplay of reward, incentive, and motivation. In the book (and in a related Ted Talk) Pink explains an experiment using an old puzzle called the Candle Problem. I won’t re-hash the whole thing, but the upshot is that a group of subjects was asked to solve a puzzle and told they were being timed—but only to establish a baseline. When a second group was asked to work on the same puzzle but were offered a decent cash reward for finishing in the top 25% (and a larger reward for reaching #1), the time for that group to complete the puzzle changed…

…it took those participants an average of 3 1/2 minutes longer to solve the puzzle.

Pink goes on to explain (or rather to discuss scientific experiments that explain) how  it is not only common for incentives like this to have unintended consequences, for many tasks positive consequences are the exception, not the rule. The point Pink makes is that rewards can be OK at motivating routine tasks, but they don’t do a good job of motivating creative thinking.

I’m not sure they work all that well for routine tasks either.

I ran my own version of the experiment this past weekend. My problem was this: my yard is covered with rocks. At least three previous owners of my house were apparently allergic to plants, grass, or any other living ground covering. I’ve already reclaimed the back yard, and my goal for this summer is to tackle the planting strip out front. If I wait until summer, however, then the clay mud between the rocks will bind them in a concrete embrace. So I decided that the rocks need to come out now.

My seven-year-old helpfully offered to lend a hand… at a suggested rate of $1/minute. I countered with an offer of piece-work: $5 if he fills a 5 gallon bucket with rocks. He took the deal, and recruited his 4-year-old brother to help, offering to split the earnings.

And so the work began: I used a spading fork to loosen the clay, and the boys scooped up the rocks and placed them in the bucket. For two whole minutes. Then there were rock-basketball shots to be missed, worms to discover, weeds to examine, not to mention bikes to ride and various other distractions. After about 10 minutes of general goofing around, the bucket was not even half full.

So I offered a challenge: Fill the bucket to the top in the next 5 minutes and I’ll increase the reward from $5 to $6. Ready. Set. Go.

The boys worked like mad for about 30 seconds, then slowed noticeably. “Four minutes to go!” I said encouragingly, “you’re doing great!” They gave another burst of energy but it quickly faded. Then the questions started. “how much time is left?” “What if we get close to the top but don’t finish?” “Three minutes” I replied, “the $6 deal is all or nothing, but you still get $5 when the bucket fills up.”

Next came the griping: “B isn’t helping enough!” “A took my rocks!” I was getting frustrated. “There are plenty of rocks, I’ll even dig up some more.” “Two minutes to go!” I said, “come on, you can get it!,” although I now had doubts.

Let me pause for a second and admit that I lied to you earlier, or I at least shaded the truth. I said that I ran the experiment on my boys as if I did it intentionally from the onset. That’s not true. It wasn’t until this point that I realized my choice of incentive ran counter to just about every teaching of Pink’s book. Being a good scientist I soldiered on, but you can guess how it turned out.

The four-year-old wandered off with about 45 seconds left, but the seven-year-old made a valiant effort to pick up the slack. Still, as time was running out the bucket still wasn’t full, and he melted into tears when the chime rang.

Feeling pretty terrible myself, I tried to encourage him: “come on, just a few more and you can get that $5.” But it didn’t help. Instead, he stormed off and kicked his brother for not helping enough (which I didn’t like, but I get). Now my workforce was gone, my kids were both crying, and I had a managerial/parental fire to extinguish that would do nothing for my landscaping. All over $1.

Later in the day, after some snacks and other damage control, I got both boys back out to the front yard. I finished the first bucket myself and told them that they’d just earned $5. Then I started working on the second bucket. I didn’t offer another $5, and I certainly didn’t offer any sort of bonus, I just began working. And, being helpful by nature, the boys eventually joined in.

I started working a little faster. They followed suit. I threw in a little ribbing: “No way can you pick up 2 rocks at the same time and get them into the bucket.” “Uh huh!” they replied, and did it easily. “OK,” I said, “but you can’t do three…” Soon, the seven-year-old, unprompted, was rapidly collecting rocks in the belly of his shirt and dumping them into the bucket. “Dad! That was 20!” he boasted. “Yeah, but I’m the fastest rock getter,” the four-year-old countered. I was plugging away as well, and before long, the bucket was full.

This is where my inner scientist failed. I’d love to be able to tell you that we finished the second bucket in a fraction of the time it took us to fill the first one, but I can’t—I didn’t time it. Fortunately, it doesn’t matter. Why? Because where the first bucket was work, the second one was fun. I had fun, the boys had fun, and we didn’t care at all how long it was taking. Same task, same measurable result, but a vastly different experience. All over $1.

I’m not saying that your team of mature and educated adults is going to react to incentives in the same way as my children. But here’s the real question: Can you say that they’re not?

© 2014 John E. Grant.

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