In 1999, before I danced away the millennium on New Year’s Eve to Prince while ignoring fears about the Y2K Bug, a major study began changing the way researchers viewed worker motivation. Lead author Edward Deci was the first to propose in 1971 that workers might have internal motivations that had nothing to do with external rewards and punishments. So we now have five decades of hard data supporting the relative power of internal versus external motivation. Yet I rarely hear about managers who fully leverage that data.

There were enough studies by 1999 for Deci and his colleagues to combine all into a single analysis.¹ What Deci called “intrinsic” motivations are built-in drives leading to “behaviors such as play, exploration, and challenge-seeking that people often do for no external reward.” The main measure is the willingness to keep doing a task without any rewards, deadlines, performance appraisals, or top-down goals.

The study found those external drivers “undermine people’s taking responsibility for motivating or regulating themselves. When institutions—families, schools, businesses, and athletic teams, for example—focus on the short term and opt for controlling people’s behavior, they may be having a substantially negative long-term effect.” Adding to that negative effect is the “greater surveillance, evaluation, and competition” that goes with rewards. As we’ll see shortly, you want to encourage, not harm, internal motivation.

Rewards that are expected based on performance, such as bonuses for hitting goals, severely reduced internal motivation (unless the tasks were boring). Paying someone just to do the task did not harm internal motivation, nor did positive feedback. Nor did unexpected rewards, but there’s a problem with those: If you keep giving them out, they can become expected rewards.

All of those early studies involved children or college students, but the story doesn’t end there. Last year another study of studies was published, focused on workers.² It compared various types of external and internal motivation, and a lack of motivation, regarding their impact on various work outcomes including performance. Combining 124 studies, the researchers found internal motivation “explained more than 50% of the variance in burnout, engagement, job satisfaction, affective commitment, turnover intentions, proactivity, counterproductive work behavior (CWB) and absenteeism and was the strongest predictor for 10 out of the 13 outcomes.” Having a sense of purpose in the work was next strongest, at 22.6%. Rewards and punishment had the least effect, and failed to explain any difference in performance (good or bad). In other words, internal motivation has far greater impact than external types.

A key factor was autonomy. The study found the more autonomy managers granted to workers, the more good outcomes and fewer bad outcomes there were.

The study provided more evidence people are more alike than different, as I’ve long argued: 85% of the correlations across all studies were effectively the same for Eastern and Western cultures, and 77% overlapped between blue- and white-collar workers. That’s on top of the drives all humans share for fulfilling basic needs (food, shelter, etc.), physical and mental well-being, and so on.³

“Overall,” the study team concluded, “these results suggest that making work inherently enjoyable and interesting pays off.” However, making “it meaningful or valuable (e.g., because it corresponds to one’s values, motives or goals) may be more important… because it is inherently enjoyable,” even under stress.

All this should sound familiar to anyone who read perhaps the best-known book on motivation, Drive by Daniel Pink.⁴ For example, he says autonomy has been found to improve worker well-being in many countries, including Bangladesh, Russia, South Korea, and Turkey. Pink organizes the science using autonomy, purpose, and one other term, mastery. Pink reports, “a study of 11,000 industrial scientists and engineers working at companies in the United States found that the desire for intellectual challenge—that is, the urge to master something new and engaging—was the best predictor of productivity.”

Pink concurs that rewards can be useful for routine, boring tasks: The worst types of assembly lines come to mind. But he relays an analysis of 58 studies by the London School of Economics finding that corporate compensation plans tied to performance can harm performance.

This brings us to the problem of goals. Pink says, “Goals that people set for themselves and devoted to attaining mastery are usually healthy. But goals inspired by others—sales targets, quarterly returns, standardized test scores, and so on—can have dangerous side effects.” That’s due in part to narrowing of focus and to unintended consequences.

A Harvard working paper, “Goals Gone Wild,”⁵ lists three examples of those bad consequences:

• Sears setting a revenue goal of $147 per hour for each auto mechanic in the 1990s, leading to widespread overcharging and unneeded repair jobs.
• Enron’s goals based on revenue instead of profit, causing ethics violations and killing the company.
• CEO Lee Iacocca imposing a tight deadline and price limit for the new Ford Pinto in the 1960s, resulting in skipped safety protocols and the deaths of 53 people from fires.

The paper points out a host of traps. Personalized goals are hard to make equal across individuals, and reduce cooperation and willingness to go beyond one’s job description. But standard goals across individuals may be unfair due to different skill levels. Faced with too many goals, people tend to focus only on one, the easiest to accomplish or measure. But narrow goals can cause people to miss other ways to achieve them that might be better for the company.

Stretch goals make people take more risks, the paper says, thus causing a 1997 bank collapse (and, I add, the housing collapse in 2008 that caused the Great Recession). They also increase the likelihood of cheating, like the recent Wells Fargo scandals. Set goals that are too easy, though, and you risk people slacking off after hitting them. In short, the Harvard scholars say, goal-setting should come with a warning label, like cigarettes do in the United States: “Goals may cause systematic problems in organizations due to narrowed focus, unethical behavior, increased risk-taking, decreased cooperation, and decreased intrinsic motivation.”

Unless your workers do one or two things over and over, it’s time to completely rethink the way your motivate them. Drop both carrot and stick, and find ways to give humans as much control over their work as possible; endless opportunities to grow; and contact with customers, so they understand the purpose their work serves. Recall that Microsoft set goals and rewarded hundreds of people to develop the dominant online encyclopedia, at the same time Wikipedia was being created by volunteers.

Which approach met that goal?

Sources:

• Deci, Edward, Richard Koestner, and Richard M Ryan, ‘A Meta-Analytic Review of Experiments Examining the Effects of Extrinsic Rewards on Intrinsic Motivation’, Psychological Bulletin, 125.6 (1999), 627–68
• Franken, Robert E., Human Motivation, 3rd ed (Pacific Grove, Calif: Brooks/Cole Pub. Co, 1994)
• Graber, Peter, The Manager’s Employee Engagement Toolbox (Alexandria, VA: ASTD Press, 2013) <http://web.b.ebscohost.com.csuglobal.idm.oclc.org/ehost/ebookviewer/ebook/bmxlYmtfXzgwMjE5OV9fQU41?sid=52d3210d-101b-4d66-9514-fe4eeb275c6f@sessionmgr120&vid=0&format=EK&rid=1> [accessed 13 May 2019]
• Lepper, Mark R, Jennifer Henderlong, and Isabelle Gingras, ‘Understanding the Effects of Extrinsic Rewards on Intrinsic Motivation- Uses and Abuses of Meta-Analysis: Comment on Deci, Koestner, and Ryan (1999)’, 8
• Ordóñez, Lisa, Maurice Schweitzer, Adam Galinsky, and Max Bazerman, Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting (Harvard Business School, 2009)
• Pink, Daniel H., Drive: The Surprising Truth About What Motivates Us (New York, NY: Riverhead Books, 2009)
• Van den Broeck, Anja, Joshua L. Howard, Yves Van Vaerenbergh, Hannes Leroy, and Marylène Gagné, ‘Beyond Intrinsic and Extrinsic Motivation: A Meta-Analysis on Self-Determination Theory’s Multidimensional Conceptualization of Work Motivation’, Organizational Psychology Review, 11.3 (2021), 240–73 <https://doi.org/10.1177/20413866211006173>

---