Peter Drucker, the legendary management theorist, told us that we have to “accept the fact that we have to treat almost anybody as a volunteer.”
In other words, we can’t just order people around and expect them to do what we want, we have to get them to want what we want. An entire industry of compensation consultants has emerged to answer that question, but nevertheless most employees feel unmotivated.
We need to drastically change how we think about incentives. For years, compensation specialists have focused on rational benefits to employment, with poor results. We’ve known for a long time that people don’t behave rationally. Motivation is primarily an emotional business and at its root is not economic exchange, but human dignity.
A Failed Rational Model
Traditionally, employment has been viewed economically. Employees exchange their labor for pay with which they can procure goods and services they enjoy. They also value leisure time with their family and friends, training to increase their economic value and so on. Therefore, or so the thinking goes, motivating employees entails giving them more of the things that they want.
However, it should be clear that there is something wrong with that notion. Many billionaires, after all, work obsessively long after monetary rewards have lost their meaning. Highly skilled doctors forsake monetary rewards to go to remote parts of the world with Doctors Without Borders. People act contrary to economic interest all the time.
When motivated people wake up in the morning, they don’t think, “I have to send this e-mail, so that I can earn a certain amount towards my rent, a fraction of my vacation time and a sliver of my health benefits. They want to achieve something.
As I argued previously, the reliance on rational explanations for behavior reflects a failed philosophy from centuries past. In actuality, we base very little of our decision making on reason, most are emotionally driven. Evolution has wired us that way.
The Importance of Dignity
Of course, accepting that employees are emotionally driven presents a problem. We certainly can’t condone people throwing tantrums in meetings or freaking out in the hallways, nor can we make ourselves fully accountable for the happiness of others. What we can do, however, is act in accordance with dignity.
Immanuel Kant, back in the 18th Century, explained that treating people with dignity means treating them as ends in themselves, rather than as simply means and that’s really the crux of it. Where many organizations start with the question of how they can get employees to do more of what they want them to do, high performing ones focus on helping them achieve more.
In other words, motivation is much more about intrinsic rewards than extrinsic rewards.
Motivated people join an organization in good faith and expect to find meaning in their work, instead they get an incentive program. No wonder they get discouraged.
Daniel Pink’s “Drive” Framework
Of course, there’s more than just philosophy at stake here, but results. While it may be nice that employees feel good about what they do, unless there is clear evidence that doing so will produce better outcomes, then it’s all just fluffy talk.
In his book Drive, author Daniel Pink cites on decades of studies that show that for problem solving and creative tasks (i.e. most of what professionals do today), incentive pay often decreases productivity, especially for tasks that require creative thinking. He outlines his research in this video:
Autonomy: Being able to organize and direct your own work is essential to dignity. Google is famous for the success of its “20% rule,” which lets (in fact demands) employees spend 20% of their time on their own projects.
However, it’s not just hi-tech companies that can benefit. Whole Foods has achieved out-sized results in supermarkets by encouraging teams to self-manage.
Mastery: People like to get better at things. They will even do it for free. Why is it that Wikipedia, open source software platforms like Apache and Linux and blogs can unlock an enormous amount of creativity but many for-profit corporations cannot?
People expend enormous time and effort on these things because mastery is an end in itself, not a means to an end.
Purpose: Uber-guru Gary Hamel, in his book The Future of Management, emphasizes the need to build a “community of purpose.” While profits are important, the most talented people want to feel that their work contributes something more to the world than just a better bottom line.
The Passion Economy
Clearly, something has changed. In times past, Rockefeller, Carnegie or Vanderbilt didn’t worry about how employees felt. They were much more likely to respond to disgruntled workers with Pinkerton guards than with autonomy, mastery and purpose. We have left the industrial economy behind long ago, we are now in a passion economy.
That makes all the difference. In the industrial age, value was created by harnessing energy. In the passion economy, value is created through superior design. Google’s algorithms, Apple’s user interfaces, Whole foods selection and service, they all were created through passionate employees working with autonomy, master and purpose.
However, what’s often missed is that these companies succeed not just through superior practices, but superior philosophy. They recognize that their employees achievements are not only a means to attaining greater objectives, they are, in fact, ends in themselves.