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Post No.: 0711bonuses

 

Furrywisepuppy says:

 

The holy grail for doing something that’s desirable is instilling an intrinsic motivation for doing it. This was expounded in Post No.: 0705.

 

But not every task or desirable behaviour can be feasibly made to feel more inherently enjoyable or worthwhile for everyone, hence why ‘carrots and sticks’ do have their place. If intrinsic motivation isn’t present then a lot of research shows that in family or small group contexts – rewarding desirable behaviours works best. But in large group contexts – the threat of punishment is usually far more effective, or at least more practical, than the enticement of rewards to get people to not cheat (e.g. laws and regulations, or even just the threat of shame, embarrassment or gossip). It’s not enough to just appeal to good internal motives – in fact, for too many, their motive when they think they can hide within a large crowd is to cheat in some way.

 

We must note here that, in any context, rewards and punishments are relative. Therefore what’s considered kind or cruel is relative. So how does a parent punish a child who doesn’t receive any pocket money, treats or privileges even in normal times? What happens is they get handed relatively more severe punishments like beatings or forfeited meals. And a treat would be something like allowing them to eat a couple of chips as a snack. How does a parent reward a child who already has it all? They probably get spoiled even more because anything less would be ‘lame’. And a punishment might be something like just telling them to go to their room because anything more severe would be ‘sadistic’. It’s just another way how children raised in poorer households have it worse…

 

We’re told that dangling (more) money in front of people will stimulate them to work harder and in turn produce better results. Yet people will admit that it’s far easier to answer questions correctly for fun than as actual contestants on a quiz show when they’re staring directly at a massive prize that’s on the line! So it appears that the incentive of big steaks adds a pressure that might elicit their worst performances. Woof!

 

Pressure strangely appears to most affect the performances of those with the highest working memory capacities when working on the most mentally demanding tasks. Experience and expertise can also lead one to complacently ‘run on auto-pilot’ and assume that the past always predicts the future. It has been shown that novices who don’t have preconceptions or pre-existing biases to confirm can find better or more creative solutions. They’re not yet stuck in the usual ways of thinking. This is the value of diversity in teams, if everybody can be made to work harmoniously.

 

There are optimal levels of bonuses and stakes, ‘carrots and sticks’, when trying to motivate peoplefrom a certain point onwards, higher bonuses or stakes actually reduce a worker’s performance. So massive bonuses can increase motivation but actually decrease performance, often dramatically. This could be, as above, because of the perceived pressure on the task when a huge prize is at risk, leading people to choke or freeze more. Or it could (also) be down to loss aversion because instead of viewing the bonus as something extra, they’ve planned their lives on the assumption of getting it every time and so they’ll view not getting that bone-us as a loss and thus a stress.

 

This pattern is applicable to mental tasks of all types instead of simple, unskilled, purely mechanical tasks – where, respectively, the relationship between the size of the bonus and a worker’s performance is either bell-curved or negatively-correlated instead of positively-correlated towards a plateau. This means that dangling huge bonuses to incentivise people only works in the context of simple mechanical tasks that require no thinking; which is unlike many of our modern work tasks. The body can easily be pushed to move faster while it’s not so easy to try to will oneself to be more creative, to remember better or make smarter decisions, for example – in fact, it can have a large negative effect when we’re anxious and try harder at these tasks, especially when we have at least a part of our mental capacities distracted by the money. So high stakes can increase effort but be detrimental to skill or thinking.

 

Incentivising creativity via money therefore isn’t very effective, and turning motivation from intrinsic to extrinsic produces an adverse effect – we’re better at creative tasks when they’re hobbies to us. We’ll take more experimental, creative chances. Whenever motivation is already high, like for doctors, it’ll have a negative effect on performance if bonuses are introduced since they’ll crowd-out any internal drive. And bonuses are basically economically saying ‘I don’t think you’re motivated enough or you intrinsically care enough to do this job well so I’ll try to compel you by constantly dangling some money in front of you to get you to work in the way I expect you to’! Remember – money isn’t the only stimulus, and it certainly isn’t the best.

 

Prosocial stimuli can increase creativity in this case i.e. caring about other people’s needs. Appealing to the concern for others also helps because many people care more in certain situations if they’re potentially going to let others down. Knowing that others are relying on us can make us work harder than if we just do something for ourselves, perhaps because we’re thinking about our social reputation. This means that cooperative team tasks can make members put in more effort.

 

However, the ‘Ringelmann effect’ is when individual members of a group tend to become progressively less productive as the size of the group increases. On the one paw, we become greater than the mere sum of our parts when we work together, but sometimes a few individuals will loaf or free-ride off the efforts of others when hidden amongst a group; although an innocent alternative explanation in some instances is that it’s harder to coordinate a large team than to coordinate an individual. Potential solutions are to increase the identifiability of the efforts of each member, and to set clear and challenging goals.

 

Something, like a bonus, that’s given to you (that you didn’t think was only a temporary arrangement), then later taken away, will feel worse than if that something was never given to you in the first place. You might grow accustomed to receiving it, or you’ll now know what you were missing that you didn’t know about or therefore felt you missed before.

 

So giving bonuses, treats, concessions or discounts every time is tricky because people will start to take them for granted. Instead of viewing them as bonuses, having them will be regarded as the norm and removing them will be regarded as a loss and maybe even something to get up in arms about. This is why some furniture outlets are stuck with always having to have ‘sales’ because they’re considered the norm now instead of like one-off events! This is also sometimes why people start to expect a mile when you give them an inch – you can only give them the same or progressively more rather than less, otherwise they’ll become unhappy, at least until they get used to the new norm. (This is related to hedonic adaptation.)

 

Therefore bonuses are more effective if awarded as an unexpected surprise. Ideally, a portion will be given as money for the receiver to pay for practical expenditures, a portion as a gift to build fluffy social capital that the receiver can save or spend on anything they like, and a portion that the receiver should give away to build and share happiness with others.

 

Concerning tips/gratuities – in some countries and contexts, they’re an essential component of a worker’s wages. In others, they’re more like bonuses for delivering a superb service. In yet others, they’re considered offensive. Regardless, the size of the tip/gratuity and the quality of service given are generally uncorrelated. Many people argue that receiving an increased but stable living wage is more preferable. This would also eliminate the vagaries of when and how much to ‘compulsorily’ tip.

 

As well as the pressure that high monetary stakes can bring, we can experience pressure from situations with high social stakes – we’re highly motivated to do well and do good in front of others due to a concern for our public image. But again the stress of public performances can lead us to vastly under-perform. When carrying out a task we know we’re good at, it can help to be surrounded by others, especially our fans or supporters, compared to when we do this task privately – but when doing a task we’re not familiar with, it can pump us up but not help us to produce a top performance when we’re surrounded by a crowd compared to when alone. Most people also perform worse than usual when playing alongside better players in sports contexts. Many egotistical people even internally feel pressure from trying to match the perception of their own egos! (Cocky, arrogant individuals are grrreat motivators for their opponents too – many people would just love to take them down a notch even more than anyone else!)

 

Yet thinking about our social or public image or reputation can be a reason for acting prosocially, hence it can depend on the act of behaving charitably being visible to others. Priming people to think of an omniscient and punitive god and a morally-dependent afterlife can lead to more cooperative or prosocial behaviours, for the similar reason of feeling like one is being watched and judged. Monetary incentives to behave kindly can crowd-out this image motivation though, thus monetary incentives for instilling prosocial behaviours only work well in private contexts and are detrimental in public contexts. Regardless, however, appealing to one’s public image again isn’t as potent as an intrinsic drive to act prosocially.

 

Also, due to loss aversion, people tend to risk more if they’re losing – a ‘double-or-nothing’ mentality to try to claw back one’s losses – especially if they have an over-inflated ego and hate losing. We’re motivationally more risk-seeking when losing and more risk-averse when in a winning position i.e. our appetite for risk increases when we’re losing (‘risk shift’).

 

Being in the state of ‘flow’ or ‘in the zone’ i.e. concentrating on the present task at hand and nothing else, is what really drives the highest performances – not when distracted for thinking about how one might spend one’s money or the consequences of failing. Like the optimal state of engagement when watching a movie is when you’re neither bored nor confused about what’s going on – the optimal state of engagement when working is when you neither find the work too easy nor too frustrating. A caveat is that it’s not always optimal to be so engrossed in one’s work if one misses or neglects other things in one’s environment, life or self though. But for most of us, and most of the time in our modern lives, it’s the constant distractions that hamper our performances – thus that state of flow is generally what we should all aim for.

 

So eliminate any distractions when you want to get stuck into a task. Maybe place prominent reminders of what you must do over any distractions? Distractions are actually less about the external things that can divert our attentions away, such as our phones, but more about the uncomfortable internal feelings that we want to escape from (e.g. our ennui, loneliness or uncertainty about how to tackle a task) – after all, we’re less distracted by other things when we personally find a task engrossing.

 

Instrumental music, like classical music, can help some people to concentrate better on a task. Chewing gum may help for some people too.

 

Woof. Please use the Twitter comment button below if you’d like to share with us other ways in which we can concentrate better on our work.

 

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