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Money does not incentivise performance

The Neuro Business InstituteFeatured Money does not incentivise performance

Money does not incentivise performance

You get the same rush from pulling off first at the robot as you do from winning cash.

 

In economics, you learn that money is a means of exchange. You get paid for your efforts. Again, from economics, a unit of energy output is an yl (pronounced “oil”). So you get dollars… for yl. If you want more dollars, pump more yl. Right? Now that makes good mathematical sense. But it does not mean it is motivating.

 

The theory goes further. If you work harder, you get more money. You want more money, therefore you want to work harder. From this stems the idea that money is a motivator. Wrong. In logical terms: the premise to the argument is faulty for two reasons. One: working harder does not guarantee more money. Some will work themselves into an early grave, and not earn any more than the next guy who shrugged his way through life. Does an enthusiastic janitor get more than a lazy janitor? Sure, he might earn a promotion, or even end up owning the company someday. It is not impossible, just uncommon. Second: what you want is not more money. The more money you have the more you spend. Sound familiar? We never seem to have enough. Let us return to “money is a means of exchange”. Do you want more money, or what it does for you? So, the argument follows irreducibly, what you want is… to be happy. Call it being comfortable, or satisfied, or call it a Ferrari.

 

So, if money does not make us want to work harder, money can at least buy happiness. (You know the line: yes, but I’d rather be crying in a Mercedes). It is not the money, or the luxury German sedan, that will make you feel better. However, the Mercedes joke works. Why? Picture yourself in a luxury car. What does it feel like, smell like, look like? Can you imagine the new car smell (they use an additive in the leather to make it smell like that, by the way). It is intensely quiet in there, airconditioned, and plush. So it does make you feel better. But you don’t need a Mercedes to get the same sense of calm. What you need is to understand how and why those things are making you feel better.

 

The smell and feel of the leather both trigger a dopamine rush. The climate control, the quiet, makes you feel secure. In other words, the external threat has been removed. You are in your bubble, and you feel safe. Safe from what? You need to establish what the threat was that put you inside the hypothetical Mercedes in the first place. You need to figure out how it got you riled, upset, angry or afraid. Then you need to think about what you are going to do when it turns out there is no Mercedes. Are you going to get the same feeling in your affordable, second-hand run-around? Actually, you may.

 

Let us stop and recognise a simple fact: we do not know what we want. So often we say one thing and do another. Ask consumer researchers. Ask marketers. Ask salespeople, who have to explain to management, that customers will say they want their brand and then will buy from a competitor. You see, more than 95% of decision-making happens in the subconscious. And it is in there that the Mercedes riddle is answered too.

 

In the view of David Rock, what we really want is five things: Status, Certainty, Autonomy, Relatedness and Fairness (SCARF). Status: we want to be taken seriously, to mean something, to be recognised. Certainty: the brain hates uncertainty, we want to be sure, we dislike doubt. Autonomy: (from the Greek meaning self-rule), we want to decide for ourselves, to have choice. Relatedness: we want to belong, to feel part of the group, part of the whole. Fairness: we do not want to feel cheated, we want to know where we stand.

 

When we don’t get those things, we feel threatened and our threat responses kick in, deep in the subconscious. In our primitive brains, we go right back in evolutionary time to a threat in the environment and want to run away, to head to the cave. To rabbit-hole. To check out. To sit in the Mercedes and cry.

 

We have four principal drivers: feeding, fleeing, fighting and breeding. Deep down in our most primitive brain, we are still in the cave. (Turns out Tim Plewman was right!) If we can’t breed with it, eat it or fight it, we want to run away from it. But this was about motivation. The thing is, we have a much higher response to threats than rewards. Does that mean you have to be beaten to work harder? Think back to SCARF. No.

 

Also consider the following from Arthur Schopenhauer (German philosopher):

“If every desire were satisfied as soon as it arose how would men occupy their lives, how would they pass the time? Imagine this race transported to a Utopia where everything grows of its own accord and turkeys fly around ready-roasted, where lovers find one another without any delay and keep one another without any difficulty; in such a place some men would die of boredom or hang themselves, some would fight and kill one another, and thus they would create for themselves more suffering than nature inflicts on them as it is.”

 

We get a dopamine rush from the thrill of chase. We like the challenge. Those are the reward responses. If, however, we had what we enjoyed in unlimited supply, our sense of enjoyment would diminish over time. Our natural go-to place is avoiding threats. We do not want Utopia. We are wild things avoiding the terror of the predator, and it makes us vital.

 

So how are we best rewarded? By overcoming challenges. If you earned commission, or made more money for your yl, you will have felt good because you had a challenge to overcome. Why is that different from being beaten? If we are in charge of our own fate, our chances of winning are equal to those of losing. If all we have is the impending doom of a slow death in the manager’s office, we do not have autonomy, status or fairness. We do not feel we belong, and we have the wrong kind of certainty: we are uncertain that we know what we are doing, or how we are supposed to be doing it.

 

Give us a challenge, with a fighting chance, and we thrive. Your options may include finding new, interesting and (positively) challenging ways to do your current job. Take a new course. Expand your skillset. Try taking on a new project, or create one. Think like an entrepreneur inside the business. And if your current organisation does not allow for that, maybe it is time to for you to fire them. Seek a new job, or even a new career, or lifestyle. Breaking out and becoming an entrepreneur may be your salvation. Whatever the outcome, do something that excites, challenges and grows you.

 

So the next time you are told how well you are getting paid to do your job, just think: you could be doing something else much more rewarding than just paying the bills.