It would be fair to say that in many cases businesses these days aren’t operating in the most effective way, and consequently, this is affects the productivity and motivation of employees.

In the TED talk below career analyst Dan Pink examines the puzzle of motivation and the question around how to incentivise employees for greater performance. He suggests that social scientists know more about motivation than most managers, with the stance that traditional rewards aren’t always as effective as we think.

How to Incentivise Employees for Greater Performance-Greg BeazleyHere are a few key points within Dan’s talk that really resonated with me.

The Candle Problem

The Candle Problem is a behavioural science experiment that tests the individual’s ability to problem solve.

  • The Scenario: you have a candle, some thumb tacks and a box of matches.
  • The Challenge: attach the candle to the wall so the wax doesn’t drip onto the table.

the-Candle-ProblemMost who begin to solve this challenge based on the limitations of what they’ve been told. For example, thumb tacking the candle to the wall. This doesn’t work. Or melting the wax on the wall and sticking the candle to it. Again, this doesn’t work.

So, here’s the solution…the-Candle-Problem-SolutionThe key to solving this challenge is what’s called Functional Fixedness, which is where you look at the box and see it only as something receptacle for the tacks, but it can also have this other function as a platform.

Applying Incentives to Performance

Using the Candle Problem a scientist named Sam Clarksburg used the same experiment to test the power of incentives. Basically, he tasked two groups to solve the Candle Problem where one group wasn’t incentivised and the other was. Through this and a variety of other studies over the past 40+ years, it’s been proven that incentives given to tasks that require cognitive thought and creativity are less effective motivators than positive reinforcement and acknowledgement. However, for less cognitive and process-driven tasks, the opposite applies. For these forms of work, financial incentives have a more positive impact on motivation.

The rationale?

“Rewards narrow our focus and restrict our possibility.” – Dan Pink

There’s a mismatch between what science knows and what business does.

A study undertaken by three economists on MIT students assessed the ability of students to play a series of games that involved creativity and motor skills in concentration. They then offered performance incentives based on three tiers.

Their findings showed:

“As long as the task involved only mechanical skill, bonuses worked as they would be expected: the higher the pay, the better the performance.” But once the task called for “even rudimentary cognitive skill,” a larger reward “led to poorer performance.” – D. Ariely, U. Gneezy, G. Lowenstein, & N. Mazar, Federal Reserve Bank of Boston Working Paper No. 05-11, July 2005; NY Times, 20 Nov. 80

Again, this suggests that what most traditional business operations are doing is completely against what the research has found.

How do you solve the business problem of increasing productivity by motivating employees?

Is it Mechanical vs Cognitive?

To answer this question you first need to recognise what type of work your business employees people to do. This is because, as the previous study showed, the expected results of motivation will be different between whether the task is mechanical in nature or requires cognitive thought.

According to Dan, there are three key areas that will help change the operating system of businesses and improve the productivity and motivation of employees:

  1. AUTONOMY: the urge to direct our own lives
  2. MASTERY: the desire to get better and better at something that matters
  3. PURPOSE: the yearning to do what we do in the service of something larger than ourselves

It’s surprising that many businesses, even to this day, don’t recognise these basic elements backed up with solid research. Granted, these concepts aren’t to be forced upon employees, but rather embraced by both employer and employee. But nonetheless, I believe giving people empowerment and purpose in what they do will not only improve productivity of that individual, but will improve their overall well-being and happiness in life.

Have a watch of Dan Pink’s TED talk and think about whether your workplace meets the mark or could do with some improvements.