Money Does Not Make the World Go Round!

Sharika Dhar 09 June 2017

“I did not share my memories of the bandage removal with Alice, but I did tell her that when I was in the hospital, I wanted to know the meaning of all the noises and beeps around me. I wanted to know my heart rate and blood pressure. I wanted to know the level of oxygen in my blood, the functioning of my lungs, and so on. I wanted to know which sound meant that my body was functioning and which indicated that things were not going well. I also wanted to know how long the pain would continue, when a treatment causes the pain to increase, and when I would have some relief. At the superficial level, it seemed that I yearned for information about what was happening to me, but what I really wanted—in contrast to my almost motionless experience in the hospital bed—was to have some feeling of control.” That was Dan Ariely lying in hospital with 80% burns. Definitely not one of the most cheery parts of the book, but it is one of the most important ones as it highlights what actually gets us through the worst situations—motivation.

Dan Ariely’s Payoff is a low down on the concept of motivation and how this factor actually helps us all do the things we do. With every logical reasoning for motivation, or even de-motivation, Ariely presents an example or experiment to get his point across. Like the paragraph quoted above, where Ariely focuses on how a meaningful path is significant to all of us, especially during tragic times. “I realised how many of our motivations spring from trying to conquer a sense of helplessness and reclaim a tiny modicum of control over our lives.” He states that human motivation is not a simple concept but, with more understanding, we would be able to understand ourselves and every aspect in our life; this is an essential step towards enhancing the inherent joy in our lives.

To understand what really motivates us, he and his colleagues, Uri Gneezy (a professor at the University of San Diego, California), George Lowenstein (a professor at Carnegie Mellon University) and Nina Mazar (a professor at the University of Toronto) carried out an experiment to test the effectiveness of different motivations at a semiconductor factory where the standard work cycle lasted eight days. Each work week was composed of four days of 12-hour shifts, followed by four days off. The factory managers set up a bonus structure to help motivate the chip-makers; if they reached the day’s target, they would receive a cash bonus. Ariely and his colleague changed this format and provided a set of incentives: cash, pizza voucher, a compliment and no incentive. The managers hypothesised that cash would bring about the most productivity while the ‘no incentive’ would bring about the least.

So, what actually motivated them? The first three approaches boosted motivation, but the most surprising factor was that the pizza voucher boosted productivity by 6.7%, close to the verbal incentive, by 6.6%; the financial incentive performed the worst, with a 4.9% boost in productivity. These were the results for the first day. On the second day, the cash incentive did 13.2% worse than those who received no incentive. On the third day, those in the financial incentive group did better; the performance dropped only by 6.2% with respect to the no-incentive condition. Overall, for the week, the monetary incentive recorded a 6.5% drop in performance compared to the no-incentive. The ‘compliment’ drifted down slowly towards the ‘no incentive’ and the pizza voucher results were between the financial incentive and the verbal incentive.

The result is a clear proof that financial incentive does not drive a person to work harder. For some, it was as good as no incentive. The author points out, “It’s astonishing to me how some ideas endure even when it’s obvious that they are no longer relevant. (Adam) Smith’s industrial-era view of labour has been passed down for generations as an indisputable truth, but as our experiments and many others show, there is a lot more to work than money and things to buy.”

Ariely states that the question of motivation encompasses almost every aspect of human endeavour and drive, but he makes one thing clear: “Among all of the motivating forces in the world, it turns out that money isn’t the simple, great motivator most of us assume it to be.

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