18 August 2010

the incentive trap

i'm certain many folks are already familiar with Dan Pink's TED talk on the science of motivation.

the key elements of motivation are
  • Autonomy – The urge to direct our own lives
  • Mastery – The desire to get better and better at something that matters
  • Purpose – The yearning to do something that we do in the service of something larger than ourselves.
my first session at Agile2010 was with Simon Bennett, who ran a hands-on exercise to illustrate the same concepts. we were split into four teams: two with somewhat standard roles and pay-for-performance plans (taken from actual companies), one organized as a group of volunteers donating to a charity, and the last (mine) run as a self-organizing team with a simple, evenly split pay structure.

the work for each team, it was revealed after the experiment, was exactly the same (math problems with varying complexity), with exactly the same calculations for value delivered. the only difference, other than the pay structure, was that the volunteer team was actually playing for a real donation to their charity, though they did not know that ahead of time, i think. the results were amazing, even after having read on the subject and seen the video above. my team (self-organized) achieved a value of 54 with average pay and highest pay of 13.5. the first team of old-school roles and pay achieved a delivered value of -19, though their average pay was 13.5 and highest pay topped out around 25 or so. the second old-school team achieved a value of 0 with fairly low pay results, due mainly to a lack of work management, which was itself affected by the pay structure. the volunteers delivered a value of about 19 though their pay was fairly low (sorry, Doctors Without Borders).

the most interesting part of all of this is that no one actually made any real money, but the effects were measurable nonetheless.

in discussion, we decided that almost everything about a standard model of a corporation is wrong: from the language of a job description or role to the often cross-competitive pay structures for those different roles. secrecy itself, required to mask vast differences in pay, can hinder the delivery of value.

at the end of the day, incentives can only reveal priorities or demotivate workers by blocking intrinsic motivators or creating feelings of inequality. so our lessons as leaders are
  • inspire purpose
  • remove demotivating forces
  • grow expectations of success
  • promote connection over competition
these lessons appear obvious, but they are always given short shrift.


  1. I wrote about this back in 2002 (and republished here) and it evoked a lot of know-it-all programmers into spouting a lot of crap. I addressed some of that crap in a later blog post.