Sometimes back, I met a friend who had just come back
from a mountaineering trip from Leh. I was a little startled as he looked a
dull & gloomy version of the cheerful enthusiast who had gone for the trip.
In the discussions also what I heard was a story of human struggle, pain and
sufferings while I was expecting to hear things like serene natural beauty,
soul soothing views & life infusing sunshine. This caught me by surprise as
what would inspire a man to inflict pain upon him.
Before I explain the probable reason, let’s
switch from a social environment to a corporate one. The decade was 1980s and
the world had begun moving from industrial to services economy. The perception
of a firm about the people as workforce was very similar to rats in a maze.
They thought people hate working and the only reason people work for was money.
People worked nine to five, put in their forty hours and got their pay checks
on Friday. So it was a capital exchange for effort and time. And whenever the
performance (or output, or efficiency) was needed to be enhanced, it was linked
with rewards (extrinsic almost all the times). The practice became prevalent
across industries and the underlying key business benefits were a) clearer goal
alignment b) Focus development c) increased employee engagement and motivation
d) improved retention etc.
But the question is whether
the practise of linking extrinsic reward to performance beneficial in today’s knowledge
industry? Fortunately the answer is NO. To understand it comprehensively, we
need to analyse the concepts of meaning and motivation in performance. In an
experiment conducted by a professor at Duke University, volunteers were told to
make bionicles (performance) for money (reward) under two conditions.
In
one condition they were given many a set of bionicles and the reward for making
each new bionicle was decreased to the point when they thought the reward is
not enough to create another one (perform the task). In the second condition
volunteers were given only two sets of bionicles and while they were busy
making the second one the first one was dismantled in front of their eyes. And
when they asked for the third one the first dismantled one was given to them to
recreate, this activity gave them the impression of cyclic work and reduced the
meaning in the work.
When the performances of the volunteers in
the two conditions were measured it was found that a volunteer made on an
average eleven bionicles in first condition as compared to seven in second condition.
Though the reward is same but when the sense of meaning is reduced the
performance is reduced. Also the magnitude of the meaning in this experiment is
very small as compared to that associated with big projects in a corporate
workplace. So in today’s workplace what drives people’s performance has more to
do with meaning than reward.
Actually, the reason of linking reward to
performance not being beneficial is that we have moved to a knowledge economy.
Today’s workforce is not looking for just a capital exchange but also a social
exchange. The concept of linking reward to performance was valid in industrial
economy where workforce had more mechanical and less cognitive work to do and
also the goal and steps to reach the goal were already defined. But in a knowledge
industry where workforce has more cognitive work to perform, the linking of
performance to reward is actually not increasing the performance. On the
contrary it is actually harming the focus and lessening the efficiency of the
workforce.
