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In his book PAYOFF: The Hidden Logic That Shapes Our Motivations, behavioral psychologist and bestselling author Dan Ariely observes that business leaders spend a good deal of time and company resources trying to motivate their employees and customers. Ariely’s powerful, evidence-based book delves into the true nature of human motivation, exploring how unaware companies and managers often are about how motivation really works. Whether it comes to employees, customers, or other stakeholders, motivating people turns out to be far more complex than we’ve ever imagined.
Or as Ariely explains in the book: “Among all the motivating forces in the world, it turns out that money isn’t the simple, great motivator most of us assume it to be. In fact, sometimes it is a disincentive,” he says. “We’re much more driven by all kinds of intangible, emotional forces: the need to be recognized and to feel ownership; to feel a sense of accomplishment; to find the security of a long-term commitment and a sense of shared purpose. We want to feel as if our labor and lives matter in some way.”
We caught up with Dan Ariely, the James B. Duke Professor of Psychology and Behavioral Economics at Duke University, to inquire how middle market companies might apply insights on employee motivation and engagement, as laid out in Payoff.
How would you say middle market and other companies are doing when it comes to motivating their employees?
Ariely: Lots of surveys show that only a small percentage of people are actually engaged at work, sometimes as low as 15% of all employees. So things aren’t great. Companies make lots of naïve mistakes, and if they thought about them a bit more, they’d change their behavior dramatically. There are opportunities here for everybody to gain. When employees are happier, they produce more and the organization is far better off, meaning more productive and profitable. Motivation is an area where we don’t have a zero-sum game of a winner and a loser, where everybody could win. But nevertheless companies are not getting the best from their people and people aren’t giving their best to companies.
Why do managers so often often assume that employees are motivated by money, that getting paid should suffice to bring out the best in people?
Ariely: When managers and leaders look at things from the outside, there’s lot they don’t understand. It could be that they don’t see the joy and pride people experience while doing a job well. Too often, when we think about others, we don’t understand their emotions and so see motivation as more mechanical than it actually is. We think of people as if they were rats in a maze, rather than thinking about the rich complexity of human behavior. If we give people enough cheese, then we think they’ll move, but people are more complex than lab rats. Intrinsic motivation, coming from within, is a powerful thing.
Can you offer an example of how an employee’s lack of intrinsic motivation might represent a lost opportunity?
Ariely: Imagine a hospital janitor and that janitor hears a scream from a hospital room as he walks by. Now, it’s clearly not in that janitor’s job description to go and check up on the screaming patient, but the hospital would want that janitor to care and do something in response. Goodwill is about getting people to care, to have the goal of the company be the same as their own personal goal, no matter what your job description or title might say, and that doesn’t happen nearly enough.
What’s the role of recognition and acknowledgement in motivating employees? How can middle market company managers tap into that intrinsic motivation?
Ariely: There’s simply no evidence showing that managers can recognize people too much. All I’ve ever seen is managers not recognizing enough. Think about your own life and your significant other. How many times have you said or heard, “You know what, darling? You’re just giving me too many compliments. Can you please just stop it?” It just doesn’t happen. Research shows that even when people get compliments that they know are insincere, they still appreciate those compliments. Managers should err on the side of recognizing, rather than not recognizing enough.
In “Payoff,” you explain that giving employees a sense of “ownership” of the things they do can drive motivation. Could you describe that research?
Ariely: We conducted great research with origami, the Japanese practice of folding paper into animals. What we found in that research is that when people created origami, not necessarily very attractive origami, they loved their own creations and valued them highly. But other people, who hadn’t made the origami, did not really appreciate these same creations and assigned little value to them. It’s the exact same object, just a piece of folded paper, but perceptions of its value differ.
There was another study that asked people the question, “which letters in the alphabet do you love the most?” Guess what, the study found that people love the letters that are in their own names the most. The takeaway here is that when we invest some of ourselves into making something, that thing becomes more valuable to us, no matter how others might value it.
So what are some ways that middle market managers and employers can create a sense of ownership over their work?
Ariely: There are so many ways to do that. It’s about giving people credit, which is one of the easiest things for managers to do. But we behave as if there’s not enough credit to go around in the world. Which is just crazy. It’s not like there’s only seven units of credit that you can give away. We can give a lot of credit away, but we choose not to.
Now, as a manager, you get to decide. You get to decide if you want to create a workplace that is mechanical and people come into work everyday with a mechanical view of life, like lab rats in a maze looking for cheese. You can also create something very different. It has a lot to do with how you pay people, yes, but also with how you recognize and acknowledge their day-to-day work. It’s what you choose to emphasize and how you choose to communicate with people. That helps determines an employee’s motivation, and whether they work hard for you or not, tapping into that intrinsic motivation.