Cash, motivation and science

I urge you all to dial back and read the comment by Bozo's Antagonist who puts the opposing view on the value of cash as a reward.

I am a big fan of publishing the opposing view.

Of course in making his point, he manages to miss the point.

I know I have put the science of motivation videos of Dan Pink (and RSAnimate) here before - but I am not sure Bozo's antagonist has bothered to watch them (we probably didn't pay him enough!)

They are important because as Mr Pink says "these are among the most robust and important scientific findings."

So here they are again:

Dan Pink TED talk on the science of motivation

RSAnimate version (everyone should watch this)

The to second is subtitled "the surprising truth about what motivates us"

I am not going paraphrase the arguments - go and watch for yourselves.

The thing is that the core point is that in motivating employees you need to pay them well enough to take money put of the equation (that is 'enough').

Once you have done that then people actually respond to different motivations better than money.

I wonder if Bozo's Antagonist would take a more enjoyable, more emotionally rewarding, more 'cool' job for less money than he currently makes, if the amount of money he got paid was seen by him as 'enough.'

 Actually I already know the answer to that....

 Bozo's Antagonist puts a high value on money, as a source of security and as a source of validation of his value. But what he wants to do with his life is have more fun than he has right now and all you need to do to prove that is offer him a cool fun job at a good steady salary. As Mr Pink says "take the issue of money off the table and replacing it with lots of autonomy"

Of course this addresses the weakness of money as a motivator...BUT

Why does Bozo say cash as a reward is flawed?

Well Bozo's Antagonist actually made this point for me (while arguing against me) - because if you get the measurement wrong you get the reward wrong. and if, as with the credit default swaps on sub-prime mortgages, you actually have NO IDEA how to measure them, you have no business paying them, worse still is if (as happened), you let the recipients of the bonuses do and judge their own measuring then you are really asking for trouble.

If you measure cash now so you can pay cash now, then you had better get the measurements right, and the people at many investment banks  (and AIG) clearly didnt! Nor did whoever measured the short term value of Enron's business to Arthur Andersen correctly measure the long term risk of signing off on flawed accounts. The reality is that the lure of substantial cash now generates bad employee behaviour! The employee behaviour that brought down Arthur Andersen, AIG, Royal Bank of Scotland etc etc.

If rewards had been 3 year vesting equity allotments instead of cash, those equity allotments would be worth something more in tune with the results of the behaviours! And maybe if your reward is a share whose future value is what counts, perhspas your behaviour will be more geared to longer term success?

The science of motivation is interesting - and everyone who assusmes that cash is all that matters needs to study that science a bit more closely.

People are complex, and interestingly, interesting people (including Bozo's Antagonist) are motivated by more interesting things than cash. If you want an interesting and successful company you need to find them and hire them and reward them in interesting and complex ways!

There are a set of dysfunctional people around who value money a lot and not all of them are in prison. People are flawed, and in the current century thanks to media and the cult of celebrity and the culture of coveting and the culture of materialism money as a root of all happiness appeals to a lot of people.

Some of them will do some pretty dodgy things (legal and otherwise) to get their hands on lots of it.

Bozo's Antagonist makes some good arguments to reinforce the points already made by Mr Pink (not the one in Reservoir Dogs) and reiterated by Bozo, that you need to pay people 'enough' and that paying people 'enough' takes money out of the motivational equation. He mentions cars and electronics. Where I for one am prepared to accept that employees may have an issue about 'enough'. I think the shop floor at RBS may have an issue about what is enough too - those that werent among the 20,000 made redundant post crash.

No one said paying people a living wage was flawed.

Many people would make an argument that it makes more sense for RBS to keep 100 high flyers and pay them £5 million each than to pay the 20,000 who lost their jobs £25,000 each. Either way you spend half a BILLION. And I hope those 100 people think that £5 mill is enough.

Because the evidence is that if you hire people whose sole motivation is money and let them loose in the world of risk then the results you get arent good.

I now own part of RBS and part of HBOS and our american readers own chunks of loads of financial institutions, all of which paid talented, educated (motivated?) individuals a LOT of cash and all of whom are worth much less than they were before.

How is that result not flawed?

The argument remains valid, the science remains the science, and omitting to listen to the "you need to pay people enough" part of it doesn't invalidate it.

Yet most companies find 'paying people enough' a difficult strategy. They find paying perceived high flyers a lot a very easy strategy.

The evidence of the result of large cash rewards as the only incentives remain in the world economy for all to see.

Offer Bozo's Antagonist a cool, fun. fulfilling job with autonomy and the chance of mastery (listen to Dan Pink for explanations of those). offer him that job at half what he currently earns. And see where he stands on money as a motivator then.

 

Comments

[Bozo's antagonist]

Bozo, you are confusing things, and answering questions and assertions that I didn't make. (And for the record, I did watch the videos some time ago, but found them a bit, y'know, Americanized).

Next time someone offers to pay you, say 'no thanks, cash is not a good reward, just heap praise on me'. I know you don't act like this, because you have been known to sack clients who don't pay up in thirty days.

I don't challenge the point that other things are important apart from money. I fully support the materialism point.

I also agree (as I said) that in the banking world we don't know in the short run who has been successful - so don't give them cash until things are clear.

But paying money is important. Why? Because it gives the recipient choice. As you know, I don't buy things, and I have zero interest in materialism. But I value the choices money brings.

People are multi-dimensional, and not everything is about money. But most of the stuff you enjoy on a daily basis - food, roads, light, heat - are produced because of the commercial imperative whose main unit of measure is money.

Anyway, someone else made your argument in a very pithy way a long time ago: 'There's not much money in poetry, but there's not much poetry in money either'.