In a world of perfect information and low transaction costs, the parties will bargain to a wealth-maximizing result.
Economics, she explained, wasn't the study of money. It was the study of behavior.
Intrinsic motivation is of great importance for all economic activities. It is inconceivable that people are motivated solely or even mainly by external incentives.
External rewards and punishments both carrots and sticks can work nicely for algorithmic tasks. But they can be devastating for heuristic ones.
Intrinsic motivation is conducive to creativity; controlling extrinsic motivation is detrimental to creativity.
People have to earn a living. Salary, contract payments, some benefits, a few perks are what I call baseline rewards. If someone's baseline rewards aren't adequate or equitable, her focus will be on the unfairness of her situation and the anxiety of her circumstance. You'll get neither the predictability of extrinsic motivation nor the weirdness of intrinsic motivation. You'll get very little motivation at all.
Work consists of whatever a body is OBLIGED to do, and that Play consists of whatever a body is not obliged to do.
If-then rewards require people to forfeit some of their autonomy.
People use rewards expecting to gain the benefit of increasing another person's motivation and behavior, but in so doing, they often incur the unintentional and hidden cost of undermining that person's intrinsic motivation toward the activity.
Higher incentives led to worse performance.
It is those who are least motivated to pursue extrinsic rewards who eventually receive them.
But for more right-brain undertakings those that demand flexible problem-solving, inventiveness, or conceptual understanding contingent rewards can be dangerous. Rewarded subjects often have a harder time seeing the periphery and crafting original solutions.
It tainted an altruistic act and crowded out the intrinsic desire to do something good. Doing good is what blood donation is all about.
Goals that people set for themselves and that are devoted to attaining mastery are usually healthy. But goals imposed by others sales targets, quarterly returns, standardized test scores, and so on can sometimes have dangerous side effects.
The problem with making an extrinsic reward the only destination that matters is that some people will choose the quickest route there, even if it means taking the low road.
Goals may cause systematic problems for organizations due to narrowed focus, unethical behavior, increased risk taking, decreased cooperation, and decreased intrinsic motivation.
Rewards are addictive in that once offered, a contingent reward makes an agent expect it whenever a similar task is faced, which in turn compels the principal to use rewards over and over again. And before long, the existing reward may no longer suffice. It will quickly feel less like a bonus and more like the status quo which then forces the principal to offer larger rewards to achieve the same effect.
Rewards' addictive qualities can also distort decision-making.
Get people fired up with the prospect of rewards, and instead of making better decisions, as Motivation 2.0 hopes, they can actually make worse ones.
In environments where extrinsic rewards are most salient, many people work only to the point that triggers the reward and no further.
The Seven Deadly Flaws
They can extinguish intrinsic motivation.
They can diminish performance.
They can crush creativity.
They can crowd out good behavior.
They can encourage cheating, shortcuts, and unethical behavior.
They can become addictive.
They can foster short-term thinking.
For routine tasks, which aren't very interesting and don't demand much creative thinking, rewards can provide a small motivational booster shot without the harmful side effects.
Offer a rationale for why the task is necessary. A job that's not inherently interesting can become more meaningful, and therefore more engaging, if it's part of a larger purpose.
Acknowledge that the task is boring. This is an act of empathy, of course. And the acknowledgment will help people understand why this is the rare instance when if-then rewards are part of how your organization operates.
Allow people to complete the task their own way. Think autonomy, not control. State the outcome you need.
Any extrinsic reward should be unexpected and offered only after the task is complete.
If tangible rewards are given unexpectedly to people after they have finished a task, the rewards are less likely to be experienced as the reason for doing the task and are thus less likely to be detrimental to intrinsic motivation.
Repeated now that bonuses can quickly become expected if-then entitlements which can ultimately crater effective performance.
Praise and positive feedback are much less corrosive than cash and trophies.
Positive feedback can have an enhancing effect on intrinsic motivation.
While controlling extrinsic motivators can clobber creativity, informational or enabling motivators can be conducive to it.
The more feedback focuses on specifics (great use of color) and the more the praise is about effort and strategy rather than about achieving a particular outcome the more effective it can be.
In brief, for creative, right-brain, heuristic tasks, you're on shaky ground offering if-then rewards. You're better off using now that rewards. And you're best off if your now that rewards provide praise, feedback, and useful information.
SDT, by contrast, begins with a notion of universal human needs. It argues that we have three innate psychological needs competence, autonomy, and relatedness. When those needs are satisfied, we're motivated, productive, and happy. When they're thwarted, our motivation, productivity, and happiness plummet.
Human beings have an innate inner drive to be autonomous, self-determined, and connected to one another. And when that drive is liberated, people achieve more and live richer lives.
The way to make business organizations work better, therefore, was to shift management thinking away from Theory X and toward Theory Y.
Type X behavior is fueled more by extrinsic desires than intrinsic ones.
Type Y behavior is fueled more by intrinsic desires than extrinsic ones.
Type X behavior is fueled more by extrinsic desires than intrinsic ones. It concerns itself less with the inherent satisfaction of an activity and more with the external rewards to which that activity leads.
Type Y behavior is fueled more by intrinsic desires than extrinsic ones. It concerns itself less with the external rewards to which an activity leads and more with the inherent satisfaction of the activity itself.
Type Y behavior is made, not born. These behavioral patterns aren't fixed traits. They are proclivities that emerge from circumstance, experience, and context.
Type Y's almost always outperform Type X's in the long run. Intrinsically motivated people usually achieve more than their reward-seeking counterparts.
An intense focus on extrinsic rewards can indeed deliver fast results. The trouble is, this approach is difficult to sustain. And it doesn't assist in mastery which is the source of achievement over the long haul.
Type Y behavior does not disdain money or recognition. Both Type X's and Type Y's care about money.
Type Y's don't turn down raises or refuse to cash paychecks. But one reason fair and adequate pay is so essential is that it takes the issue of money off the table so they can focus on the work itself.
Type Y behavior is a renewable resource.
Type Y behavior promotes greater physical and mental well-being.
People oriented toward autonomy and intrinsic motivation have higher self-esteem, better interpersonal relationships, and greater general well-being than those who are extrinsically motivated.
Deci found that those oriented toward control and extrinsic rewards showed greater public self-consciousness, acted more defensively, and were more likely to exhibit the Type A behavior pattern.
Type Y behavior depends on three nutrients: autonomy, mastery, and purpose. Type Y behavior is self-directed. It is devoted to becoming better and better at something that matters. And it connects that quest for excellence to a larger purpose.
Management isn't about walking around and seeing if people are in their offices, he told me. It's about creating conditions for people to do their best work.
Autonomous motivation involves behaving with a full sense of volition and choice, they write, whereas controlled motivation involves behaving with the experience of pressure and demand toward specific outcomes that comes from forces perceived to be external to the self.
Autonomy, as they see it, is different from independence. It's not the rugged, go-it-alone, rely-on-nobody individualism of the American cowboy. It means acting with choice which means we can be both autonomous and happily interdependent with others.
Type Y behavior emerges when people have autonomy over the four T's: their task, their time, their technique, and their team.
George Nelson, who was the design director at Herman Miller, the iconic American furniture maker, for a few decades. He once laid down five simple tenets that he believed led to great design. One of these principles could serve as a rallying cry for Type Y's ethic of autonomy over task: You decide what you will make.
Most other enterprises are positive-sum. If I sell you something you want and enjoy, we're both better off. Law, by contrast, is often (though not always) a zero-sum game: Because somebody wins, somebody else must lose.
These sorts of high-stakes, measurable goals can drain intrinsic motivation, sap individual initiative, and even encourage unethical behavior.
Salaried people put in as much time as it takes to do their work. Hourly employees in the program work a set number of hours to comply with federal labor regulations, but they get to choose when. Those employees report better relationships with family and friends, more company loyalty, and more focus and energy. Productivity has increased by 35%, and voluntary turnover is 320 basis points lower than in teams that have not made the change. Employees say they don't know whether they work fewer hours they've stopped counting.
Without sovereignty over our time, it's nearly impossible to have autonomy over our lives.
Autonomy over task is one of the essential aspects of the Motivation 3.0 approach to work.
And when pushing for a more systemic change in the organization, Mediratta says autonomy over team is even more important. Those efforts require what he calls a grouplet a small, self-organized team that has almost no budget and even less authority, but that tries to change something within the company.
If you want to work with more Type Y's, the best strategy is to become one yourself.
Encouraging autonomy doesn't mean discouraging accountability.
Motivation 3.0 begins with a different assumption. It presumes that people want to be accountable and that making sure they have control over their task, their time, their technique, and their team is a pathway to that destination.
Studies have shown that perceived control is an important component of one's happiness.
Control leads to compliance; autonomy leads to engagement. And this distinction leads to the second element of Type I behavior: mastery the desire to get better and better at something that matters.
In the midst of play, many people enjoyed what Csikszentmihalyi called autotelic experiences from the Greek auto (self ) and telos (goal or purpose). In an autotelic experience, the goal is self-fulfilling; the activity is its own reward.
The highest, most satisfying experiences in people's lives were when they were in flow.
Most important, in flow, the relationship between what a person had to do and what he could do was perfect. The challenge wasn't too easy. Nor was it too difficult. It was a notch or two beyond his current abilities, which stretched the body and mind in a way that made the effort itself the most delicious reward. That balance produced a degree of focus and satisfaction that easily surpassed other, more quotidian, experiences. In flow, people lived so deeply in the moment, and felt so utterly in control, that their sense of time, place, and even self melted away. They were autonomous, of course. But more than that, they were engaged. They were, as the poet W. H.
Most important, in flow, the relationship between what a person had to do and what he could do was perfect. The challenge wasn't too easy. Nor was it too difficult. It was a notch or two beyond his current abilities, which stretched the body and mind in a way that made the effort itself the most delicious reward. That balance produced a degree of focus and satisfaction that easily surpassed other, more quotidian, experiences. In flow, people lived so deeply in the moment, and felt so utterly in control, that their sense of time, place, and even self melted away. They were autonomous, of course. But more than that, they were engaged.
Creating flow-friendly environments that help people move toward mastery can increase productivity and satisfaction at work.
The urge to master something new and engaging was the best predictor of productivity.
They provide employees with what I call Goldilocks tasks challenges that are not too hot and not too cold, neither overly difficult nor overly simple.
When what they must do exceeds their capabilities, the result is anxiety. When what they must do falls short of their capabilities, the result is boredom.
Flow is essential to mastery. But flow doesn't guarantee mastery because the two concepts operate on different horizons of time. One happens in a moment; the other unfolds over months, years, sometimes decades. You and I each might reach flow tomorrow morning but neither one of us will achieve mastery overnight.
What people believe shapes what people achieve. Our beliefs about ourselves and the nature of our abilities what she calls our self-theories determine how we interpret our experiences and can set the boundaries on what we accomplish. Although
People can hold two different views of their own intelligence. Those who have an entity theory believe that intelligence is just that an entity. It exists within us, in a finite supply that we cannot increase. Those who subscribe to an incremental theory take a different view. They believe that while intelligence may vary slightly from person to person, it is ultimately something that, with effort, we can increase.
To incremental theorists, exertion is positive. Since incremental theorists believe that ability is malleable, they see working harder as a way to get better.
Entity theory . . . is a system that requires a diet of easy successes. In this schema, if you have to work hard, it means you're not very good.
The young people recognized that setbacks were inevitable on the road to mastery and that they could even be guideposts for the journey.
Type X behavior often holds an entity theory of intelligence, prefers performance goals to learning goals, and disdains effort as a sign of weakness.
Type Y behavior has an incremental theory of intelligence, prizes learning goals over performance goals, and welcomes effort as a way to improve at something that matters.
Mastery Is a Mindset
Mastery Is a Pain
Mastery of sports, music, business requires effort (difficult, painful, excruciating, all-consuming effort) over a long time (not a week or a month, but a decade).
Whereas the importance of working harder is easily apprehended, the importance of working longer without switching objectives may be less perceptible . . . in every field, grit may be as essential as talent to high accomplishment.
Mastery often involves working and working and showing little improvement, perhaps with a few moments of flow pulling you along, then making a little progress, and then working and working on that new, slightly higher plateau again.
Effort is one of the things that gives meaning to life. Effort means you care about something, that something is important to you and you are willing to work for it.
Being a professional, Julius Erving once said, is doing the things you love to do, on the days you don't feel like doing them.
Mastery Is an Asymptote
People are much more likely to reach that flow state at work than in leisure.
Autonomous people working toward mastery perform at very high levels. But those who do so in the service of some greater objective can achieve even more. The most deeply motivated people not to mention those who are most productive and satisfied hitch their desires to a cause larger than themselves.
Motivation 2.0 centered on profit maximization. Motivation 3.0 doesn't reject profits, but it places equal emphasis on purpose maximization.
The aims of these Motivation 3.0 companies are not to chase profit while trying to stay ethical and law-abiding. Their goal is to pursue purpose and to use profit as the catalyst rather than the objective.
Humanize what people say and you may well humanize what they do.
He calls it the pronoun test. When he visits a workplace, he'll ask the people employed there some questions about the company. He listens to the substance of their response, of course. But most of all, he listens for the pronouns they use. Do the workers refer to the company as they? Or do they describe it in terms of we? They companies and we companies, he says, are very different places. And in Motivation 3.0, we wins.
The value of a life can be measured by one's ability to affect the destiny of one less advantaged. Since death is an absolute certainty for everyone, the important variable is the quality of life one leads between the times of birth and death.
The correlation between money and happiness is weak that past a certain (and quite modest) level, a larger pile of cash doesn't bring people a higher level of satisfaction.
How people spend their money may be at least as important as how much money they earn. In particular, spending money on other people (buying flowers for your spouse rather than an MP3 player for yourself ) or on a cause (donating to a religious institution rather than going for an expensive haircut) can actually increase our subjective well-being.
Handing individual employees control over how the organization gives back to the community might do more to improve their overall satisfaction than one more if-then financial incentive.
One cannot lead a life that is truly excellent without feeling that one belongs to something greater and more permanent than oneself.
You value something. You attain it. Then you're better off as a function of it. But what we find is that there are certain things that if you value and if you attain them, you're worse off as a result of it, not better off.
A healthy society and healthy business organizations begins with purpose and considers profit a way to move toward that end or a happy by-product of its attainment.
The science shows that those typical twentieth-century carrot-and-stick motivators things we consider somehow a natural part of human enterprise can sometimes work. But they're effective in only a surprisingly narrow band of circumstances.
The science shows that if-then rewards the mainstays of the Motivation 2.0 operating system not only are ineffective in many situations, but also can crush the high-level, creative, conceptual abilities that are central to current and future economic and social progress.
The science shows that the secret to high performance isn't our biological drive or our reward-and-punishment drive, but our third drive our deep-seated desire to direct our own lives, to extend and expand our abilities, and to live a life of purpose.
The richest experiences in our lives aren't when we're clamoring for validation from others, but when we're listening to our own voice doing something that matters, doing it well, and doing it in the service of a cause larger than ourselves.
As you contemplate your purpose, begin with the big question: What's your sentence?
So before you go to sleep each night, ask yourself the small question: Was I better today than yesterday?
Why not snip five years from retirement and sprinkle them into your working years?
Figure out your goals mostly learning goals, but also a few performance goals and then every month, call yourself to your office and give yourself an appraisal. How are you faring? Where are you falling short? What tools, information, or support might you need to do better?
Deliberate practice a lifelong period of . . . effort to improve performance in a specific domain.
Deliberate practice is about changing your performance, setting new goals and straining yourself to reach a bit higher each time.
Repeat, repeat, repeat. Repetition matters. Basketball greats don't shoot ten free throws at the end of team practice; they shoot five hundred.
Seek constant, critical feedback. If you don't know how you're doing, you won't know what to improve.
Focus ruthlessly on where you need help. While many of us work on what we're already good at, says Ericsson, those who get better work on their weaknesses.
Prepare for the process to be mentally and physically exhausting. That's why so few people commit to it, but that's why it works.
Make your group a no competition zone. Pitting coworkers against one another in the hope that competition will spark them to perform better rarely works and almost always undermines intrinsic motivation.
Set up work groups so that people will stimulate each other and learn from each other, so that they're not homogeneous in terms of their backgrounds and training. You want people who can really cross-fertilize each other's ideas.
Try a little task-shifting
Animate with purpose, don't motivate with rewards. Nothing bonds a team like a shared mission.
Set aside an entire day where employees can work on anything they choose, however they want, with whomever they'd like. Make sure they have the tools and resources they need. And impose just one rule: People must deliver something a new idea, a prototype of a product, a better internal process the following day.
The most important aspect of any compensation package is fairness. And here, fairness comes in two varieties internal and external. Internal fairness means paying people commensurate with their colleagues. External fairness means paying people in line with others doing similar work in similar organizations.
Higher wages could actually reduce a company's costs. The pay-more-than-average approach can offer an elegant way to bypass if-then rewards, eliminate concerns about unfairness, and help take the issue of money off the table. It's another way to allow people to focus on the work itself.
When the payoff for reaching targets is modest, rather than massive, it's less likely to narrow people's focus or encourage them to take the low road.
Having a little of their own money, and deciding how to save or spend it, offers a measure of autonomy and teaches them to be responsible with cash.
Here's why household chores are good for kids: Chores show kids that families are built on mutual obligations and that family members need to help each other.
Here's why an allowance is good for kids: Having a little of their own money, and deciding how to save or spend it, offers a measure of autonomy and teaches them to be responsible with cash.
Here's why combining allowances with chores is not good for kids. By linking money to the completion of chores, parents turn an allowance into an if-then reward.
Praise effort and strategy, not intelligence
Make praise specific
Praise in private
Offer praise only when there's a good reason for it
Why am I learning this? How is it relevant to the world I live in now?
The secret is deliberate practice highly repetitive, mentally demanding work that's often unpleasant, but undeniably effective.
Type Y Insight: Finite players play within boundaries; infinite players play with boundaries.
Type Y Insight: If you set a goal of becoming an expert in your business, you would immediately start doing all kinds of things you don't do now.
Type Y Insight: Contrary to what we usually believe the best moments in our lives are not the passive, receptive, relaxing times although such experiences can also be enjoyable, if we have worked hard to attain them. The best moments usually occur when a person's body or mind is stretched to the limits in a voluntary effort to accomplish something difficult and worthwhile.
People can have two different mindsets, she says. Those with a fixed mindset believe that their talents and abilities are carved in stone. Those with a growth mindset believe that their talents and abilities can be developed. Fixed mindsets see every encounter as a test of their worthiness. Growth mindsets see the same encounters as opportunities to improve. Dweck's message: Go with growth.
Use the language of growth for example, I'm not sure I can do it now, but I think I can learn with time and effort.
Learn to listen for a fixed mindset voice that might be hurting your resiliency.
Interpret challenges not as roadblocks, but as opportunities to stretch yourself.
Start groups or forums with others in your industry or outside it to reach beyond your current area of influence.
Work with existing organizations to confirm your profession's values or develop new guidelines.
The paradox seems to be, as Socrates demonstrated long ago, that the truly free individual is free only to the extent of his own self-mastery. While those who will not govern themselves are condemned to find masters to govern over them.
Learning organizations where autonomous thinking and shared visions for the future are not only encouraged, but are considered vital to the health of the organization.
People with a high level of personal mastery are able to consistently realize the results that matter most deeply to them in effect, they approach their life as an artist would approach a work of art. They do that by becoming committed to their own lifelong learning.
Theory X, assumed that people avoid effort, work only for money and security, and therefore need to be controlled
Theory Y, assumed that work is as natural for human beings as play or rest, that initiative and creativity are widespread, and that if people are committed to a goal, they will actually seek responsibility.
Four basic practices for creating a culture where self-motivation can flourish:
Lead with questions, not answers.
Engage in dialogue and debate, not coercion.
Conduct autopsies, without blame.
Build 'red flag' mechanisms. In other words, make it easy for employees and customers to speak up when they identify a problem.
Basic tenets of Results-Only-Work-Environment:
People at all levels stop doing any activity that is a waste of their time, the customer's time, or their company's time. Employees have the freedom to work any way they want. Every meeting is optional. There are no work schedules.
Set your own goals
People who pursue more intrinsic goals to get fit in order to feel good or to stay healthy for their family make slower progress at first, but achieve significantly better results in the long term.
Use the Sawyer Effect to your advantage and turn your work(out) into play.
By continually increasing the difficulty of what you take on think Goldilocks and setting more audacious challenges for yourself as time passes, you can renew that energy and stay motivated.
This new approach has three essential elements: (1) Autonomy the desire to direct our own lives; (2) Mastery the urge to get better and better at something that matters; and (3) Purpose the yearning to do what we do in the service of something larger than ourselves.
Traditional if-then rewards can give us less of what we want: They can extinguish intrinsic motivation, diminish performance, crush creativity, and crowd out good behavior. They can also give us more of what we don't want: They can encourage unethical behavior, create addictions, and foster short-term thinking.
Mastery begins with flow optimal experiences when the challenges we face are exquisitely matched to our abilities.
Mastery is a mindset: It requires the capacity to see your abilities not as finite, but as infinitely improvable.
Mastery is a pain: It demands effort, grit, and deliberate practice.
Mastery is an asymptote: It's impossible to fully realize, which makes it simultaneously frustrating and alluring.
Within organizations, this new purpose motive is expressing itself in three ways: in goals that use profit to reach purpose; in words that emphasize more than self-interest; and in policies that allow people to pursue purpose on their own terms.