Some years ago the AARP (the organization that assists American retirees), asked several lawyers if they were willing to offer their services to retirees in difficulty at a special rate, about $ 30 per hour. None of the lawyers consulted accepted. At that point, the legal manager of the AARP had a brilliant idea: he asked the lawyers if they were willing to offer their services free of charge to retirees in need. In almost all cases the answer was yes.
What was going on? How was $0 more attractive than $30? The answer is that when money was mentioned, the lawyers measured the offer according to economic standards and thus determined that the offer was too low compared to market rates. When there was no mention of money however, they measured the offer according to their standards of social ethics, and were therefore willing to provide pro bono services for a good cause.
According to research by Dr. Dan Airely each individual lives in the middle of two universes that often end up colliding. One is "the Social Universe", where we cultivate relationships with others and which is governed by social/ethical standards ("I need to help him because he’s a friend of mine"; "I’ll do it because it’s the right thing to do"; "This is an important service for the community, so I should do it even if there’s no personal gain ... "). The other is "the Market Universe" which is characterized by the typical rules of economy ("my time is worth $50 an hour", or "if I have to work on Saturday, I want to be paid overtime").
According to Airely’s research, when these two worlds collide a very interesting phenomena occurs. First, there’s the fact that people are much more motivated to work for a “cause” than for money. When we begin to think with the rules of the market, social norms leave the discussion. Forever.
This tells us that when an entrepreneur abuses the use of economic incentives, by trying to monetize every single activity, this could lead employees who were previously willing to help the company for free (because they were dedicated to the company goals, because they felt they were part of a group ... ) to be guided solely by market rules, "if you don’t feed the jukebox another quarter, I won’t sing you another song ..."
This causes considerable damage.
Our own experience, which is further supported by Airely’s findings, shows us that a commitment to core values can be far more motivating than a cash prize at the end of the month. If you can make your employees understand the core values of the company, if you can give them a passion that needs more than just $ for fuel, you will unleash a power you didn’t even realize your company possessed.
You must also remember that the company shouldn’t be a purely commercial operation, but should also take care of the community around it and promote, both internally and externally, values such as friendship, mutual support, self improvement, etc. These priorities, if incorporated into the company’s core values, can be used to ignite the “social universe” reasoning in your employees.
So how do we reconcile the need for economic incentives with the importance of preserving the standards of relational ethics to motivate the people in our team?
Obviously financial rewards can be a useful tool, but you need to be careful with how you use them. Every so often reward people in an unstructured way, meaning without any standard system in place. Limit yourself to giving surprise bonuses, such as two or three hundred euro. Some studies show that awards like this, surprisingly, have a longer lasting effect on motivation than a monetary prize obtained on the basis of planned incentives.
Better yet, provide incentives that don’t have a clear price tag or that don’t single out individuals. Give away a vacation or leisure activities for the whole group (for example: take the whole company to the beach). Other studies show that awards like these have a deeper effect on staff motivation and promote greater team spirit.
Don’t turn your employees into jukeboxes. It’s obviously important that you help your employees earn money, and we essentially owe them that, but to allow them to become a simple jukebox could be fatal.
Paolo Ruggeri
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