Dan Pink: Rewards and incentives don’t work

At TED Dan Pink (a favorite of mine) presented surprising evidence showing that rewarding performance financially does not lead to higher productivity in competing individuals and groups when any skill at all is involved. Rewards work well enough when the competitors just have to complete a simple task quickly. But as soon as they have to actually think outside the box, using the right brain, any financial reward actually lowers people’s productivity.

So what raises our productivity? What really motivates us? What makes us tick as economic animals?

  • Autonomy
  • Mastery
  • Purpose

“These are the building blocks for a completely new operating system for our businesses,” he says. He then goes on to talk about how Google and Atlassian have instituted autonomy and self-direction in their companies (13:00).

Seen on Ann Michaelson’s blog

When Money Buys Happiness

spentDo we shop compulsively, and if so, how can we stop?

It seems that most of our shopping behavior is in fact quite sensible. Geoffrey Miller’s new book, “Spent: Sex, Evolution and Consumer Behavior” seems to prove that.

In collaboration with John Tierney in the NYT Dr. Miller issued an open invitation to NYT readers to try this exercise:

List the ten most expensive things (products, services or experiences) that you have ever paid for (including houses, cars, university degrees, marriage ceremonies, divorce settlements and taxes). Then, list the ten items that you have ever bought that gave you the most happiness. Count how many items appear on both lists.

Over 200 people responded. The results are very interesting.
Items appearing on both lists most often were:

  • Houses
  • Higher education
  • Travel
  • Electronics and entertainment media
  • Some particular brands and models of cars

The items appearing much more on the ‘expensive’ than on the ‘happy’ lists were:

  • Children
  • Marriage ceremonies
  • Divorces
  • Taxes
  • Health insurance
  • Most cars
  • Boats

And the items appearing much more on the ‘happy’ than on the ‘expensive’ lists were:

  • Sharing meals with friends
  • Alcohol
  • Bicycles
  • Camping gear
  • Pets
  • Hobbies
  • Adult education
  • Church
  • Books
  • Music
  • Artwork
  • Leisure software
  • Quality beds

NYT Tierney Lab June 29, 2009: When Money buys you happiness

Have you bought anything lately that didn’t cost much but made you happy? Why exactly did you buy it? Describe the circumstances and your expectations at the time. What joy has it brought you since?

PS: See Tyler Cowen’s review of the book: “The core thesis is the Veblenesque point that marketing plays upon our weaknesses as evolved, biological creatures, obsessed with signaling”. Miller provides “proposals for lowering the cost of our signaling.”
See Colin Tudge’s review in Literary Review: “To find mates we must signal our mate-worthiness. This is best achieved not by shows of toughness and belligerence, but by displaying what are now recognised as ‘the big six’ qualities: intelligence, openness to ideas, conscientiousness, agreeableness, stability, and extraversion. In short, it pays to be nice, funny and creative.”