Monetary Incentives and Motivation explained by Bruno Frey

Summary

This research explores the power of symbolic awards, emphasizing how non-monetary recognition can drive motivation and performance. The study compares extrinsic and intrinsic motivation, showing that awards given for voluntary efforts, such as helping a colleague in a call center, led to increased work performance. It suggests that symbolic awards, while cheaper than monetary incentives, can foster deeper commitment to a company's goals. The research also highlights the impact of prestigious awards like the Don Bates Clark medal, showing how recognition can boost productivity. The video concludes with a discussion of the Ig Nobel Prize, questioning whether bad awards lead to negative reactions or inspire people to prove themselves further.

Takeaways

• 😀 People are often motivated by recognition and acceptance, not just monetary rewards.
• 😀 Monetary incentives are commonly assumed to be the main motivator, but many people value acknowledgment over money.
• 😀 There are two main types of motivation: extrinsic (external rewards) and intrinsic (internal fulfillment).
• 😀 The study focused on a call center, where symbolic awards were given for voluntary actions like helping colleagues.
• 😀 Receiving awards for voluntary work led to improved performance in core activities, such as answering calls.
• 😀 Employees appreciate awards because they feel their work is recognized and appreciated, which is often lacking in many workplaces.
• 😀 Symbolic awards (without monetary rewards) can be more effective in motivating employees than just financial incentives.
• 😀 Giving awards is a low-cost way to motivate employees and can be more sustainable than constant monetary bonuses.
• 😀 Intrinsic motivation helps employees feel committed to their company's goals and increases long-term engagement.
• 😀 Too many awards can dilute their significance, so they should be given thoughtfully and meaningfully to maintain their value.

Q & A

What is the main focus of the research discussed in the transcript?

The main focus of the research is to explore the role of symbolic awards as intrinsic motivators in the workplace, in contrast to the common belief that monetary incentives are the primary drivers of employee performance.

How does the research differentiate between intrinsic and extrinsic motivation?

Intrinsic motivation refers to doing something because it is personally meaningful and enjoyable, whereas extrinsic motivation involves external incentives, such as money or pressure from others.

What was the setting of the research study, and what kind of behavior was being observed?

The research was conducted in a Fortune 500 company's call center, observing voluntary behaviors such as stepping in when a colleague is ill or in difficulty, and how these behaviors influenced overall work performance.

What were the main findings of the study regarding awards and performance?

The study found that employees who received awards for voluntary behavior were more engaged and performed better in their core tasks, such as answering phone calls, showing a positive spillover effect.

What is the significance of symbolic awards in today’s workplaces?

Symbolic awards are significant because they serve as recognition of employees’ contributions, which can increase intrinsic motivation, improve commitment to the organization, and reduce the reliance on monetary incentives.

Why is intrinsic motivation important for organizations?

Intrinsic motivation fosters greater commitment to the organization’s goals, improves long-term employee engagement, and reduces turnover, as employees feel personally invested in their work rather than working solely for monetary gain.

What potential problem can arise from giving too many awards?

If too many awards are given out, they may lose their value and significance, leading employees to no longer take them seriously, which diminishes their effectiveness as motivators.

What is the Don Bates Clark Medal, and what did the research find about it?

The Don Bates Clark Medal is a prestigious award given to the best young American economist. The research found that recipients of this award showed increased productivity and higher citation rates in their future work.

How does the research connect to the issue of Wikipedia contributor retention?

The research explored how the introduction of awards for Wikipedia contributors helped reduce dropout rates, with recipients of these awards continuing to contribute more topics, demonstrating the positive impact of recognition on sustained engagement.

What is the Ig Nobel Prize, and how might it influence behavior?

The Ig Nobel Prize is awarded for unusual or humorous scientific achievements. The research suggests it would be interesting to study whether recipients stop working due to embarrassment or if they are motivated to prove their worth and continue their work.

What broader implications does the research have for businesses and public sector organizations?

The research suggests that businesses and public sector organizations should emphasize symbolic awards to motivate employees, fostering intrinsic motivation and commitment, while reducing reliance on financial incentives. This approach can improve long-term performance and organizational culture.