How Money Can Disincentivize Work

HOW MONEY CAN DISINCENTIVIZE WORK

Does monetary reward really provide the best incentive to work? If you live within a system that commodifies everything, turning it into private property that you cannot gain access to unless you have money, and your only means of obtaining money is to submit to paid employment, that would most likely push you toward getting a job. That seems more ‘stick’ than ‘carrot’. But what about those fortunate few, that 13% or so, who don’t hate their job? If you take their existing motivation and add another- financial- incentive to work, does that increase their desire to work?

Common sense would assume it would. Two incentives have got to be better than one. And financial reward must be the great motivator, for why else would executives be worth so much? Well, firstly, executives are not paid what they are worth; nobody is paid what they are worth in a market economy. People receive whatever they can negotiate, and with the balance of power tipped so much in their favour, those at the top of the corporate hierarchy can strike a great deal for themselves. 

As for common sense’s view of an extra, financial, incentive increasing motivation, psychologists and economists have been making empirical studies of this assumption for forty years, and the evidence is that it just isn’t true. Adding a monetary incentive to work that is already rewarding does not make it even more rewarding. Quite the opposite in fact: It undermines, rather than enhances, the motives people already had. 

In one study, conducted by James Heyman and Dan Ariely, people were asked to help load a van. When no fee was offered, people tended to help, inclined as they were to view the situation in social terms. But when a fee was included, that induced participants to take the transaction out of the social realm and reframe it as financial. The offer of money lead to the question “is it worth my time and effort?”. The extrinsic motivation of monetary reward undermined the  intrinsic motivation of being a helpful person. Economist Bruno Frey describes this as ‘motivational crowding out’.

EVERYBODY BUT ME IS MOTIVATED BY MONEY

Interestingly, the assumption that we are motivated by money holds only in the general sense. When studies are conducted to gauge people’s attitude to work and what motivates us, we tend to see that most individuals don’t generally think of themselves as primarily motivated by money. For example, Chip Heath surveyed law students, and 64% said they were pursuing such a career because they were interested in law and found it an intellectually appealing subject. But, while we don’t think of ourselves ‘in it for the money’ we tend to think that it is other people’s prime motive. 62% of people in Heath’s survey reckoned their peers were pursuing a career in law for monetary gain. Since it's generally believed that money is the main incentive provider (‘I’ being the exception) it’s not surprising that material reward continues to be so heavily relied on.

It is important to point out that extrinsic motivations are not always bad, it is just that when an activity is intrinsically rewarding, adding an extrinsic motivation can actually reduce engagement in that task, not increase it as common sense might lead us to believe would be the case. Furthermore, studies from Harvard Business School, Northwestern University’s Kellogg School of Management, and others  have shown that goals people set for themselves with the intention of gaining mastery are usually healthy, but when those goals are imposed on them by others- such as sales targets, standardized test scores and quarterly returns- such incentives, though intended to ensure peak performance, often produce the opposite. They can lead to efforts to game the system and look good without producing the underlying results the metric was supposed to be assessing. As Patrick Schiltz, a professor of law, put it:

“Your entire frame of reference will change [and the dozens of quick decisions you will make every day] will reflect a set of values that embodies not what is right or wrong but what is profitable, what you can get away with”.

Practical examples abound. Sears imposed a sales quota on its auto repair staff- who responded by overcharging customers and carrying out repairs that weren’t actually needed. Ford set the goal of producing a car by a particular date at a certain price that had to be at a certain weight, constraints that lead to safety checks being omitted and the dangerous Ford Pinto (a car that tended to explode if involved in a rear-end collision, due to the placement of its fuel tank)  being sold to the public. 

Perhaps most infamously, the way extrinsic motivation can cause people to focus on the short-term while discounting longer-term consequences contributed to the financial crisis of 2008, as buyers bought unaffordable homes, mortgage brokers chased commissions, Wall Street traders wanted new securities to sell, and politicians wanted people to spend, spend spend because that would keep the economy buoyant- at least while they were in office. 

A VIRTUAL WORLD OF TRUE WORK

It would be handy if there were another form of productive activity, other than employment, that relied on other incentives to work, for then we could see how successful non- monetary incentives are at motivating us. Actually, there is. We call them videogames. I would argue that videogames have opposing drives to jobs, due to the fact that where jobs are concerned a business pays you to work, but where videogames are concerned you pay a business to work.

 Paying wages counts as a cost to a business. The company wants to reduce costs, and one way it might accomplish that would be to reduce, as much as possible, the amount of challenge, creativity, autonomy, and judgement  required to do the job, thereby making it possible to employ workers who are less skilled, easier to train, and hence more replaceable and so not in a good position to bargain for a better deal. 

You might wonder why anybody would want to do a job that has little going for it beyond the fact it pays wages, but of course nobody wants to do it; many are just not in a position to turn it down, thanks to the post-modern slavery system that I talked about in the essay ‘Indentured Servants…’

A videogame, in contrast, is a product people pay for. But there is a problem. Fundamentally, what you physically do in a videogame stands comparison to the dullest production-line job. You are just pressing a few buttons over and over again. The game designers must take that basic, monotonous, action and add layer upon layer of non-monetary incentive. This may include a clear sense of purpose for why you are doing what you are doing, perhaps through a strong narrative; plenty of opportunity for social engagement through team-building, community message boards and such; and a meritocratic system that rewards skillful play and turns failure into a valuable lesson through systems of feedback that constantly provide you with signals so that you know if you should rethink your strategy.

The result? Videogames are massively popular. People pay good money to do what is, essentially, work. In fact, Bryon Reeves and Jo Leighton Read, in their book ‘Total Engagement’, list hundreds of job types and show how every one has its equivalent occupation in videogames and online worlds.

The perspective mainstream media takes is usually a negative one. Buying videogames is fine, of course, as that helps growth and provides jobs. But playing videogames, especially for long periods, is a definite no-no. It’s usually described as kids stuck in front of a screen, not motivated to go out and get a job because they are ‘addicted’ to Grand Theft Auto V or whatever the current bad boy is. 

Indeed, a recent BBC news item reported on a young man who is making a decent living by uploading highlights of his gameplay in the FIFA series of videogames (I imagine the money comes from payment from Google ads and sponsorship deals.) The first question the reporter asked this professional gamer was ‘why don’t you go and get a real job?’.

But why would anyone- even those of us who pay rather than get paid to play videogames- put down their controller or log out of their online world, arguably the only places where you can find something like a true meritocracy and where nonmonetary incentives have been refined over many years- and go seek a job unless you were really forced to? What for? The modern market stands opposed to everything it claims to champion, as John Mccurdy illustrated in ‘The Cancer Stage of Capitalism”:

“Non-living corporations are conceived as human individuals...Continent-wide machine extractions of the world’s natural resources, pollutive mass-manufacturing and throwaway packages are imaged as home-spun market offerings for the local community...Faceless corporate bureaucracies structured to avoid the liability of their stock holders are represented as intimate and caring family friends...If we walk through each of the properties of the real free market, in short, we find not one of them belongs in fact to the global market system, but every one of them is appropriated by it as its own”.

Who is to blame? Banks?  Corporations? Politicians? Consumers? The Left? The Right? I have no definitive answer. I have heard many opinions from all sides, each providing justification for why they are right and everybody else is wrong. My hunch is that this is a systemic outcome that cannot be conveniently blamed on any one group, thing or ideology. Whatever was behind the development of the global market system and debt-based, interest-bearing currency, we now inhabit a world in which jobs destroy work by devaluing voluntarism and undermining intrinsic motivation, use technology to cause job overspill and turn workplaces into fascist regimes with spy networks comparable to panopticons, and pursue short-term profit at any cost, encouraging the growth of ‘socialism for the rich’ where the reward for risk-taking in the casino world of derivatives etc is concentrated into the accounts of the few financial nobility who now rule us, while the costs are borne by we, the taxpaying serfs, who are not physically chained but compelled to labour through manufactured debt and the suppression of true, technical efficiency for monetary gain.  And now that system is gearing up to throw employees, the unsung heroes who did the bulk of the work in creating the wealth of the world, on the scrapheap.

The subject of technological unemployment will be the next point of discussion.