Wednesday, August 26, 2009

Capital is not the best motivator

One of the most basic assumptions that we use as a foundation of our society is that positive incentives are necessary for the continuation and propagation of our society. These incentives, almost always in the form of capital, inspire us (or so we're lead to believe) and lead us to innovation.

This line of reasoning allows us to continue our institutionalized policy of 'social Darwinism'. The phrase "survival of the fittest" was coined by Herbert Spencer (rather than Charles Darwin to whom the phrase is often attributed) to explain the self-regulation and sustainability of society. It was Spencer's thought that a potential gain in capital was sufficient motivation for members of society to innovate, advancing society as a whole. At the core of 'social Dawinism' is the belief that the struggle for natural resources (or fiat capital backed by production that utilizes those resources) will force the 'better' humans to succeed while leaving the 'inferior' humans behind. This 'natural' class structure (according to the theory) become more pure the less regulated the distribution of resources is. In other words, without a government welfare state, the best and brightest will eventually come to own the vast majority of the capital we have and distribute it according to their own innovation, while all others will be left with less capital but incentive to do better to gain more. Natural competition between people for this capital leads to better practices, the 'social Darwinists' (who we now call libertarians) argued.

The problem with this is that we know (and have known for some time) that personal gain is not necessarily a good motivational tool. For instance, in this study (published in 1987), we have the following information;

In one study, girls in the fifth and sixth grades tutored younger children much less effectively if they were promised free movie tickets for teaching well. The study, by James Gabarino, now president of Chicago's Erikson Institute for Advanced Studies in Child Development, showed that tutors working for the reward took longer to communicate ideas, got frustrated more easily, and did a poorer job in the end than those who were not rewarded.


The recognition that rewards can have counter-productive effects is based on a variety of studies, which have come up with such findings as these: Young children who are rewarded for drawing are less likely to draw on their own that are children who draw just for the fun of it. Teenagers offered rewards for playing word games enjoy the games less and do not do as well as those who play with no rewards. Employees who are praised for meeting a manager's expectations suffer a drop in motivation.

This leads to interesting conclusions;

Such findings call into question the widespread belief that money is an effective and even necessary way to motivate people. They also challenge the behaviorist assumption that any activity is more likely to occur if it is rewarded. Amabile says her research “definitely refutes the notion that creativity can be operantly conditioned.”

So, if capital is not a sufficient motivator to accomplish things (and it's particularly poor motivation, if not counter productive, in the realm of creativity and innovation), why do we use it as a competitional tool rather than simply as a means to perform the task?


Giles said...

If anything, the main reason that capital is used as a motivator more than anything is that it's easy for people to understand. If you want people to work harder, offer them more. Obviously it's not a direct correlation; rather, it's a curve.

Additionally, many people are either unable or unwilling to offer psychological means to motivate others. So your boss might be too socially retarded to, say, give compliments. Or listen to your problems at work. Etc. Whereas give more = get more is easy.

Fixing this kind of thing would be pretty complex. You'd either have to teach children complex human analytical reasoning from an early age or have a complicated government controlled business system. Or something more inventive to fix the problem, whatever.

Jonathan Cunningham said...

An interesting part of the study was this:

"It should not be surprising that when verbal feedback is experienced as controlling, the effect on motivation can be similar to that of payment. In a study of corporate employees, Ryan found that those who were told, “Good, you're doing as you should” were “significantly less intrinsically motivated than those who received feedback informationally.”

There's a difference, Ryan says, between saying, “I'm giving you this reward because I recognize the value of your work” and “You're getting this reward because you've lived up to my standards.”"

Rather than those either a government controlled business or early education (although the education has benefits beyond this context) another alternative would be to place the means of production into the hands of the labor that produces, rather than investors who own amassed capital.

Giles said...

That's union talk, Jon. People get killed for that sort of talk.

There are lots of studies on those sorts of business too, but the only ones that come to mind are large agricultural and/or market co-ops.

I suppose what I feel is that people often address the issue that they are treated inhumanely by the companies they work for, and their effort reflects that company's lack of care. But people tend to always naturally lean toward the easier method of simply using treats and hierarchy to reward employees rather than invest emotionally or put creative effort into it.

I guess to me modern business seems like a natural extension of basic human needs, desires and insecurities. Nobody wants to bust their ass over an employee who may leave for another job at any time, the same way that employees won't bust their ass over a job when they feel they could be getting more.

These sorts of things have been studied by sociologists for decades and I would say the biggest difficulty in analyzing it is mucking through people's preconceptions. People and business are already stuck in their way and application of social sciences often seem either costly or a step back.

Shaunda said...

Just a thought, but isn't this just another example of cognitive dissonance?

In many psychological experiments it's been found that generally when a person is given money for doing something, they have more of a negative attitude than someone who was given little or no money for doing the same tasks.

So, in the scenario of everyday work, I think the theory of cognitive dissonance can easily be applied since people generally work FOR money, not because they find their daily tasks interesting or fulfilling.

The average person knows they do not enjoy their daily work, but they are rewarded monetarily so rationally there is some worth. This creates a feeling of dissonance and instead of being motivated by more of one of the ideas, they are still unhappy because of their internal conflict.

I wonder if people who don't have a choice in their position, say like a family farm situation, all the children grow up to also work on the farm, have the same response. Since they did not choose, they psychologically can't blame themselves for a bad decision.

Anyway, just rambling. :P