3. Impact of Incentives

The title of author Dan Pink's book about the science of incentives, Drive: The Surprising Truth About What Motivates Us, tells the story of the impact of incentives.

Many of the incentives that business, education, and economics experts have promoted in the past have been shown by current research to be ineffective. So it is very helpful for anyone trying to sell something, trying to motivate someone, trying to improve company morale, to know what impact different incentives will have.

Pink shows that for most people, the Industrial Age incentive assumption, that giving people more money for more or better work simply does not work. This Industrial Age assumption was at the heart of the education reform idea that teachers who get better results with students should get more pay. This idea is called "merit pay." Give more money to the "good" teachers. "Good" is defined as those teachers who do a better job of helping kids to increase their scores on high stakes tests.

But there is a problem here. The research does not support this idea. In the few studies which have been done on this, students do just as well with teachers not being incentivized with money, as the teachers who actually get more money if student scores go up.

To be fair, Pink says that in manual work, which does not require much thinking, like many kinds of factory work, then paying someone more money if they produce more goods, does help with increased production. Using the thinking of the era of the Industrial Revolution does work when it comes to industrial revolution kind of work.

But for work that requires the need to measure and weigh options, to have to create and plan and innovate and respond based on changing circumstances, paying people more money to get more done does not work .

Pink shows studies that reveal the incentives that best motivate workers in jobs that require the use of even rudimentary thinking and decision making:

1. Autonomy. Give them a say. Give them more responsibility to be able to act on direct problem-solving where they are not being told what to do.
2. Mastery. Give them training so they can do their job better, and let them find ways of improving what they do. As people feel they are improving, mastering their skills, their attitude and output improve, and everyone benefits.
3. Purpose. People respond best when they feel what they are doing is meaningful. Companies can best invest in their employees when they give them an environment in which there is a higher good being served, a transcendent meaning.