The “If – Then” bias

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One of the everlasting impressions I was left with after reading Dan Pink’s book Drive: The Surprising Truth About What Motivates Usis the importance of the difference between “If – Then” rewards and “Now-That” rewards. While the first type creates a type of agreement thus making the reward contingent on the action (and some would say the other way around), the second type is a method to reinforce a behavior that was done not out of the hope to get a reward, but out of intrinsic motivation.

I was reminded of this difference while reading Terry Goodkind’s epic fantasy novel Soul of the Fire, where he writes:

Dalton Campbell leaned back to fish something from a pocket. “This is for you.” He flipped it through the air.

Fitch caught it and stared dumbly at the silver sovereign in his palm. He expected that most rich folk didn’t even carry such a huge sum about.

“But, sir, I haven’t worked the month, yet.”

“This is not your messenger’s wage. You get your wage at the end of every month.” Dalton Campbell lifted an eyebrow. “This is to show my appreciation for the job you did last night.”

Claudine Winthrop. That was what he meant – scaring Claudine Winthrop into keeping quiet.

…

Fitch laid the silver coin on the desk. With a finger, he reluctantly slid the coin a few inches toward Dalton Campbell.

“Master Campbell, you owe me nothing for that. You never promised me anything for it. I did it because I wanted to help you, and to protect the future Sovereign, not for a reward. I can’t take money I’m not owed.”

I love this part of the story for two reasons:

First, it captures the idea of the difference between “If – Then” and “Now-That” rewards wonderfully. The character described by the author, Fitch, says it clearly. I did not do what I did for a reward. I did it because I wanted to. Intrinsic motivation.

Second, more than that, it actually shows that people, both those that hand out rewards and those who receive it have a bias towards “If – Then” rewards. In Drive: The Surprising Truth About What Motivates Us, Pink claims that there is an incongruity between what science knows about motivation and what business (and people in general) does about it.  Goodkind’s description of Fitch accurately deals with the paradox. Fitch does not understand. You get a reward only if you are promised beforehand. Who gives somebody a reward after the fact?

As Pink claims in his book, the science in this area is not open to debate. In the long run, “Now-That” rewards are much more effective. And I ask you this: are you, your organization or those around you suffering from the “If – Then” bias?

Elad

Assumptions about the yearly bonus

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Eric Mosley, CEO of Globoforce, writes in HBR.org an article titled: “You’re Getting a Bonus! So Why Aren’t You Motivated?” in which he goes against the idea of a yearly bonus. A short quote:

The problem is that, even if it’s true that contingent compensation spurs higher performance (and not everyone thinks it does – see, for example, this pdf), when the reward comes as one big check cut by the finance department at the end of the fiscal year, that motivating effect is mainly lost. That’s because the bonus fails to make two critical connections: 1.The connection between values and behavior… 2. The connection between a worker and his/her direct supervisor.

True and powerful words. I agree with every word. But I think the problem is even more basic than that.

The problem is in the assumptions underlying this practice. Not only for managers or academics, but for the working people too. We have a culture that worships money. A culture where we believe money, at any point, is the solution. And the more the better.

But it is not. Not in any meaningful way. And certainly not the more the better.

If you ask people what they want – probably money will be the answer. I was talking to an agent about a job the other day. He told me the pay for the position I was applying to is not that good. My answer was, “OK, but other things matter to me, beside the pay”. “Yes, of course” he said. “It is a great company, you get paid on time, there is a yearly bonus and everything”.

What?

If you ask people, theoretically, before hand, what will they prefer, a yearly bonus or some other softer reward and recognition that will make them feel good on a day to day basis they will say – the yearly bonus. People already gave up on the idea of feeling good in their jobs, where they spend most of their lives! And you can show them research and studies and even their own results saying that actually when it comes to happiness, they don’t prefer the yearly bonus. And they still would not believe you.

This myth or habit or whatever you want to call it of the end of year bonus has become so ingrained in the culture that it is treated with religious like reverence. And the problem is that most people believe this story they tell themselves. Until we succeed in changing this almost mythological standing of the yearly cash bonus, it will be hard to bring on change.

Like every fight against habit and beliefs, “victory” would not come from rational argument, but from emotional reasoning. Only when people start to feel the motivation, the passion, the flow, will they be convinced that this practice might seem good and even gives them a short rush, but it actually makes their life miserable in the long-run most of the time. It is a long hard struggle, but it is one, we all want to be fighting.

Elad

What can we learn from “Pay for grades”

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In addition to my fascination with management of people I am almost as equally fascinated by education. I find many similarities between the subjects (as I mentioned in the past – see here and here) as both subjects remain a mystery although they have been practiced in a professional rigorous way for more than a century. That is why I particularly enjoyed reading the article from Time Magazine titled: Pay for Grades: Should Kids Be Bribed to Do Well in School?.

While the article raises a controversial issue about paying kids to make them learn which I must admit I am not too happy about, I admire the fact that the researchers actually went out and tried this approach in real life setting. As the article suggests, you learn some amazing things when you do that, some of them unexpected. The fact that we have moral reservation about issues should not stop us from exploring them, when we are already facing a system that is failing (for a different perspective on the last issue see Dan Ariely’s take).

However, in this blog, I want to point out two interesting quotes from the article that I think have just as much relevance to the management world as to the education world. Here is the first one:

We tend to assume that kids (and adults) know how to achieve success. If they don’t get there, it’s for lack of effort — or talent. Sometimes that’s true. But a lot of the time, people are just flying blind. John List, an economist at the University of Chicago, has noticed the disconnect in his own education experiments. He explains the problem to me this way: “I could ask you to solve a third-order linear partial differential equation,” he says. “A what?” I ask. “A third-order linear partial differential equation,” he says. “I could offer you a million dollars to solve it. And you can’t do it.” (He’s right. I can’t.) For some kids, doing better on a geometry test is like solving a third-order linear partial differential equation, no matter the incentive.

We have a tendency to focus on results and outcomes. And that is usually a good thing. Just by measuring outcomes, we can sometimes create a sense of positive competition that drives these results. Sometimes it is simple – because people know what to do, they just need a little nudge of fun to drive them to excel. However, when things go wrong and we don’t see the desired outcomes we tend to be fixed on the outcomes. And then we assume things.

“These workers are not motivated. They are not working hard. They are slackers. After all I have done for them and all I offer them; they still don’t give me the results I want.”

All that is well and good, but it is not very helpful. Assumptions don’t take us anywhere and in case of relationships, they are wrong most of the time. As the article points out you can offer these kids a lot of money, but you probably won’t see results. This is what Paul Herbert calls Energized Incompetence:

Take five people who never have played basketball, put them on the court and tell them if they win the game they receive $1 million dollars each. I’m sure you’ll get a lot of activity. Heck, it would be real fun to just watch the mayhem. But the chances of success are slim and none … Motivation isn’t just creating energy – it’s creating directed energy.

In Switch: How to Change Things When Change Is Hard, the writers claim that one of the most effective ways to create change is to explain what are the critical steps needed in order to create that change. It is not enough to say what the change is but we need to chip out the behavioral steps that will lead to the new results. Because sometimes people can’t find the way. And this connects directly to the second quote from the article:

Kids may respond better to rewards for specific actions because there is less risk of failure. They can control their attendance; they cannot necessarily control their test scores. The key, then, may be to teach kids to control more overall — to encourage them to act as if they can indeed control everything, and reward that effort above and beyond the actual outcome.

The funny thing is, that when you give people access to steps that they were missing, they find new exciting ways to accomplish the goal in a better way than you could have imagined. It is a delicate balance between allowing autonomy and offering support.

What are you asking you employees to do? Are these things under their control? Are your rewards directed to results or to the right behaviors?

Elad

Are you a happiness machine?

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This is a subject I wrote about before but that I am only starting to realize its true importance. Unpredictability of rewards.

Watch the movie above. How do you feel? Putting all the cynicism aside, just seeing people this happy is contagious. Indeed positivity is contagious. And really, who doesn’t want his workplace, school or even home to be this happy? I know I do. And no, I am not advocating bringing a Coca-Cola vending machine or even giving people around you expensive gifts. I am talking about noticing people around you and doing something about it. One of the side effects of the prevalent system of Carrot and Sticks, is that people almost don’t expect anything surprising anymore. It is so easy to surprise them. And what does that have to do with management? A lot, as Tanveer Naseer writes in the original post where I first saw this ad:

So instead of having another typical team meeting, secretly plan to end it early and surprise everyone by bringing out cocktail platters and giving your employees time to just relax and enjoy their work environment. Or announce an impromptu hockey game in the office parking lot – with a request for spectators needed to cheer the game on. The point is it doesn’t have to be expensive or elaborate to plan – the only objective is to break up the routine and offer something to motivate your employees and raise team spirit.

And I will take it another step further and make it simpler. Notice and make sure the people around you know that they are noticed:

And the same happens to us when we see an employee doing good work. We assume that the fact that we saw him and know what he did means that he knows that we saw him and knows what he did. What is the solution? Taking the opposite assumption. We need to assume that our employees never know that we noticed them. Then make it a priority to let them know that we did. Let’s overcome the curse of knowledge and starting noticing people.

And also see here.

You know the saying – “I feel like you take me for granted”.

It is known because it is true – how many people around you do you take for granted every day? How many employees who are doing exactly what is expected of them are you ignoring? What will happen if you show them, in a simple way, how much you appreciate them? What will happen if you recognize their contribution? What will happen if you give them consistent feedback, all the time?

Tom Peters constantly writes about this and asks all of us: who did you take to lunch today? Every lunch is an opportunity to connect, with a costumer or an employee or in this case – recognize. How many thank-you notes have you written this week? How many people did you send flowers too?

And Dan Pink writes in his new book, Drive: The Surprising Truth About What Motivates Us, about the same thing – “if-then” rewards are bad motivators. We should move to “now that” rewards:

In other words, where “if-then” rewards are a mistake, shift to “now that” rewards – as in “Now that you’ve finished the poster and it turned out so well, I’d like to celebrate by talking you out to lunch”.

As Deci and his colleagues explain, “If tangible rewards are given unexpectedly to people after they have finished the 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”

Let’s take this idea one step further – “now that … let me surprise you! Let me make you happy! Let me do something unpredictable and unexpected”.

It is so easy to create the feeling we see above, yet it so hard. As I wrote a few months ago:

We know that predictable rewards are not as effective as unpredictable rewards, but still, most companies and managers stick to a schedule of predictable rewards. Why? Well, my guess is that it is just easier. As a manager, I don’t need to think and worry about my employees all the time. Does it really matter if I do in once every quarter for an hour or if I do it 30 times over the quarter for 2 minutes each time? But, the fact that it is easier does not mean that it is right (like most conventional wisdoms). We know nothing worth gaining is ever gained without effort.

Are you becoming a happiness machine? It is about time you become one…

Elad

The unpredictability of rewards

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This post is the fourth post in a series of posts I am writing on lessons about managing people from the book Predictably Irrational, by Dan Ariely (for more post in the series, see 1, 2, 3).

In the additions to the 2nd edition Ariely added a chapter called Reflections and Anecdotes about Some of the Chapters. In it, he describes the idea of the schedules of reinforcement, which is a term coined by the behavioral psychologist B. F. Skinner. In simple terms, it means that when and how often we reinforce a behavior can have a dramatic impact on the strength and rate of the recurring appearance of that behavior. We would expect that a constant, fixed reward system will create a more recurring behavior. But what the experiments actually suggest is that variable reinforcements actually are more effective at creating a high steady rate of behavior.

And that got me thinking about how we reward and recognize employees. Do we do it once a year or once a quarter? Do we do it during a quarterly report or an annual meeting of the employees where the employee of the quarter is declared?

We know that predictable rewards are not as effective as unpredictable rewards, but still, most companies and managers stick to a schedule of predictable rewards. Why? Well, my guess is that it is just easier. As a manager, I don’t need to think and worry about my employees all the time. Does it really matter if I do in once every quarter for an hour or if I do it 30 times over the quarter for 2 minutes each time? But, the fact that it is easier does not mean that it is right (like most conventional wisdoms). We know nothing worth gaining is ever gained without effort.

A few posts ago I wrote about an important principle in feedback called – consistency. The same words could be used to describe the right approach for rewards and recognition:

Consistency – feedback should be given all the time. Not at a predetermined time once a quarter. But all along the year. This is where I disagree with Bratz. The question is not whether you had one meaningful conversation with your manager once a quarter. The question is how often during the quarter did you have meaningful conversations with your manager. Conversations that create value for you and are not done just to fill some kind of form or requirement from HR. If constructive feedback is given consistently, the answer will be all the time. And if it is done all the time, there is a high probability that we are dealing with a good boss.

How unpredictable are your rewards?

Elad

Is money equals motivation a conventional wisdom we have to break?

The last few days I have been reading the book Predictably Irrational, by Dan Ariely. It describes many experiments done over the years that illustrate how people behave in irrational ways when we – and when I say we I mean traditional economics – expect them to act like rational people. While I don’t agree with some of the conclusions Ariely makes in his book, I find the questions fascinating. Thus, I am going to dedicate my next few posts to relevant lessons for managing people the book.

Chapter 4 of the book is called: “the cost of social norms – why we are happy to do things, but not when we are paid to do them”. In it, Ariely describes a number of experiments that show how when people are paid to do things, they do them with less enthusiasm and effectiveness. It reminded me of the above fascinating TED talk by Dan Pink that talks about similar experiments that led to similar (but a little different) conclusions. Both Ariely and Pink conclude that we need to rethink the effectiveness of money as a motivator for work.

So, is money being the best motivator another conventional wisdom that needs breaking.  Well, I will let my past as lawyer get the better of me and say – yes and no.

Yes, because we need to realize that the world is changing. That some things that we thought were true are not true anymore. There is a growing tendency of people to seek out work that not only gives them money, but also gives them joy, a sense of impact and work life balance. People look to use their strengths more and attempt to reach a state of flow. And we need to understand that money creates problems, because it is easy to compare (link in Hebrew). I would direct you to Ariely’s first chapter in the book about relativity.

But the answer is also no. in some situations, monetary rewards work. And when we think about these experiments we need to remember a few things. First, the experiments described in Ariley’s book and in Pink’s lecture are experiments, done in a lab, on students and not in a real work environment. Real life is different and we need to be careful in applying the lessons learned in the lab without thinking about the differences between students in the lab and real life work environment. Second, these experiments are social science experiments. They don’t have one result. They check for averages. And averages are sometimes dangerous. The experiments show trends. They show tendencies. But they don’t show how all people behave in all situations. And we know that monetary rewards do work in certain circumstances. As Paul Hebert from I2I explains, although there are some accurate things in Dan Pinks’s lecture, we must be careful when taking it as saying all monetary rewards are bad. Below is his presentation on how to look at incentive reward strategies within the context of how business operates:

From all the theories of motivation I encountered to date, the one I like the most is Vroom’s expectancy theory.  The reason I like it so much is that it talks about personalization. About understanding each employee specific motivation and about customizing the right rewards, invectives, and recognition, in order to motivate him. And I think this is the most important lesson from the science and experiments. We should be careful from applying one approach. We should doubt and check if what we are doing actually works. And the most important thing of all, we should not assume what motivates people, we should find out.

Elad