Daniel Pink spoke at TEDGlobal in July 2009. He examined the mystery of motivation, revealing that the traditional "reward technique" doesn't always work and sometimes has quite the crappy effect. Yes, you may quote me on that.
Mr Pink (Mr Pink... heheh.) revealed that this extrinsic, reward style of management only works well for tasks where there is a simple set of rules and a clear destination. But, it fails with... well, just about everything else.
He talked about an MIT study, sponsored by the Federal Reserve Bank, involving various games, which offered three levels of reward for performance... small, medium and large.
"As long as the task involved only mechanical skill, bonuses worked as they would be expected: the higher the pay, the better the performance. But once the task called for even rudimentary cognitive skill, a larger reward led to poorer performance. In eight of the nine tasks we examined across the three experiments, higher incentives led to worse performance."
Also, a similar study at the London School of Economics had the same results, "We find that financial incentives... can result in a negative impact on overall performance."
The answer, according to Mr Pink, is: Autonomy, Mastery and Purpose. Unseen intrinsic motivation... the drive to do things for their own sake, is far more effective than extrinsic motivation.
Below are some funny quotes from his presentation, which, incidentally, have nothing to do with the topic.
Daniel Pink: I need to make a confession at the outset here. A little over twenty years ago, I did something that I regret. Something that I'm not particularly proud of. Something that in many ways, I wish no one would ever know. But, that here, I feel kind of obliged to reveal. Ummm... in the late 1980s, in a moment of youthful indiscretion......... I went to law school.
Now, in America, law is a professional degree. You get your university degree and then you go on to law school. Now, when I went on to law school, I didn't do very well. To put it mildly, I didn't do very well. I, in fact, graduated in the part of my law school class that made the top 90%...........possible.