Dan Ariely, a professor of psychology and behavioral economics at Duke University, has explored the irrationality of people’s decision-making processes in best-selling books. In his latest book, “Payoff: The Hidden Logic That Shapes Our Motivation,” he explains that what drives people is far more complicated than most of us understand – and why business leaders would be wise to take a closer look.
SMM: The payoff at the end of “Payoff” seems to be that we can only understand a certain amount about motivation and that we will never totally understand it?
Ariely: Let’s break the question into two. There are things companies are doing unwittingly that decrease motivation. We know quite a lot about that. We can quite easily identify mistakes – not giving autonomy, not getting people to think about the long-term. On the positive side, we know some things, but there is a lot we don’t know as well. That’s human nature – it’s complex and interesting.
When you think about physics, the rules have not really changed. The rules of social science change all of the time. Why? Because the world with Facebook, for example, is different than the world without Facebook. The world with iPhones is different than the world without iPhones. It’s not because the human mind is changing, but the things we choose to spend our time on are changing. If you got a plaque of recognition 10 years ago, how many people would know about it? If you got it right now and you posted a picture on Instagram or your Facebook, how many people would that be? It is important to express correctly our lack of understanding, but it means we need to keep exploring and trying to understand what the incentives are at play and how we take the best advantage of it.
SMM: You use an experiment in which people construct swans out of paper and assign a value to them to explore the correlation between effort and ownership and how it relates to motivation. Do you ever get pushback that making origami swans cannot be equated to workplace efforts?
Ariely: Before we conduct these experiments, I ask people to predict what they expect the results will be. People often don’t predict the results correctly. What is important is you have a theory about motivating human beings and by the fact that you’re not able to predict these results, maybe your theory is wrong. I am not expecting anybody to hear about an experiment involving origami and totally change their behavior. But what I am hoping is people will look at the experiment about origami and say, “Before reading about this experiment, I did not predict correctly how much value people would put into something they built themselves, how much love people would have for it, and how much they would not see that other people don’t love it as well.”
SMM: So what is the lesson from that particular experiment that can be used in the workplace – that people become more invested when they own the process?
Ariely: The nice thing about cownership is there are a lot of ways to implement it. One example comes from the open source movement. People who wrote a particular piece of code had their name attached to that code forever. People were motivated because they were building something that was there’s. Imagine if you were designing a new car and everybody involved would sign their name and it went under the hood very small. If you give the credit to 15 people, they take away more than one-fifteenth of the joy of getting credit.
SMM: Should we be surprised that people are not good at what predicting what will motivate them?
Ariely: The reason we don’t understand ourselves is because of what is called the inside and the outside of you. When you think about romantic love, you think about very objective descriptions of a person you will be attracted to. But when you meet somebody and you fall in love with them, it’s about different things that are very intangible. The same thing is true for jobs. It’s hard to describe what motivates you when you are in the task compared to when you are out of the task. It’s as if you were two people. The person looking from the outside looks at the objective stuff – “I need to get paid” and “What is the bonus?” The person inside the task wants things like flow complete immersion in what they are doing. There is a disconnect. Until you are in that moment, you don’t really understand it. I like writing, but if you ask me what it is exactly I enjoy about writing, it’s very hard for me to tell you. There is this incredible pleasure of trying to convey an idea and thinking that someone else will read it and understand something differently. But if I just try to describe it from the outside perspective, it’s hard to do. When I’m in it, it’s very different.
SMM: Explain the connection between commitment from an employer and motivation.
Ariely: The idea that there is something that binds us together in the long term and therefore our commitment has to change is incredibly important. Companies are sometimes deciding to do the opposite. What does a cubicle do? If you go to work and there is a cubicle and your name slides in, and everybody has the same chairs and desks, does that give you a sense the company expects you to be there for a long time, or that they have done everything to make you easily replaceable so that if someone else comes tomorrow, there will be no loss of the day? This creates an unbelievable level of feeling temporary. Zappos has cubicles, but they encourage people to make their cubicle their own in a way that has tremendous investment. Employees take as much decoration as they could fit into a small apartment and stuff it into a cubicle – pictures and thank-you notes. Everyone is different and it builds up. It’s officially a cubicle, but it smells and looks like people’s personality more than anything else you can imagine.
In most jobs, you have discretion over the amount of effort you put in. Reciprocity is a very strong motivator. The moment you declare that you have a mutual long-term view, the commitment only increases. That’s what a lot of companies don’t do. They don’t think about how the long-term commitment changes people’s perception. I don’t think they understand the principle, and they focus too much on the negative side rather than the upside. For me the important thing is for people to think about what I call the motivation equation. What are all of the things we can do in our individual environment to facilitate higher motivation?
SMM: Let’s talk about Wells Fargo. What the heck happened there?
Ariely: This was an epidemic. This was not a few rogue employees. It was a part of the culture to say, “We are willing to do things that are not permitted by the rules for our own financial well-being.” If a company has that as part of its fabric, that’s not the only thing they do. I talked with a company some time ago that was fixing gas pipe leaks. The company told its employees they could park illegally as close as possible to the leak to accelerate the work. But when they asked the employees to put safety suits on, they were not doing it. The company came to me and asked why their employees were not putting their safety suits on. I told them, “You just told them that time was more important than everything else. You told them to park illegally and you even have a procedure to pay for the fines.”
When you look at Wells Fargo, you have to wonder how much of this is just an indication that culturally, there are lot of forces in this company that are saying, “Forget about what is ethical,” and who are willing to do a lot of other things to make money.
SMM: What’s next for you?
Ariely: I have another book on the way on the psychology of money and all of the mistakes we make when we think about money. It includes a little bit about salaries and bonuses, but most of it is about how we spend as consumers.
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