In one of the most watched TED Talks of all time, career analyst Daniel Pink explains what he calls ‘the puzzle of motivation’. To date, the video has been viewed over 6.8 million times. Below, Ignitia highlights his key points.

Overcoming Functional Fixedness

In his video, Daniel lays out his case for rethinking how today’s businesses are being run. In order to illustrate his point, Daniel opens his talk with the classic psychological experiment known as the ‘candle problem’. In it the experimenter provides a candle, a box of thumb tacks, and a match, and instructs the participants to attach the candle to the wall in such a way that the wax does not drip onto the floor. Daniel then explains, the solution is to attach the box to the wall and to place the candle inside it. Daniel explains this time of solution is found by overcoming functional fixedness. Instead of seeing the box as only holding the tacks, a solution is found by looking beyond the box’s traditional use, and repurposing the item.

The Evidence Has Been Ignored

To further illustrate his point, Daniel related a story of a Princeton professor who conducted this same experiment. The catch however was that he offered half of his participates money as motivation to find a solution. Of the twenty participants he offered the reward to, he told them the five fastest would receive $5 and the fastest overall would receive $20. On average according to Daniel, the participants who were offered the reward completed the task 3.5 minutes slower. According to Daniel, this result is not uncommon. Although seemingly counterintuitive, these contingent motivators have been proved time-and-again not to work for over 40 years. And this research has been ignored.

How Money Harms Creativity

According to Daniel, this indicates a tremendous mismatch between science and the way most businesses are setup. According to Daniel, the type of motivation that works best depends on the task at hand. For menial tasks that require little thinking, external motivators such as money can work well. However, as soon as there is an element of creativity involved, external motivators lose their incentive. According to Daniel, the reason this idea applies so much to work in the United States is because by-in-large, the work we do here largely requires outside-the-box thinking.

To further emphasize this fact, Daniel points to another study conducted by a professor at MIT in which students were offered different sized rewards based on their performance. According to the study, ‘As long as the task involved only mechanical skill bonuses worked as they would expect: the higher the pay, the better the performance.’ Daniel then goes on to further relate, ‘But once the task called for ‘even a rudimentary cognitive skill’, a larger reward ‘led to poorer performance.’ This same study was repeated across the world, and across socio-economic areas. The conclusion is that financial incentives can result in a negative impact on overall performance.

Motivating Today’s Workforce

According to Daniel, the better way then to motivate employees in the 21st century is to provide three new motivators: Autonomy, Mastery, and Purpose. According to Daniel, the largest motivating factor for employees today is the ability to direct their own careers. For evidence of this, Daniel points to the Australian company, Atlassian. Once a year, this company allows its engineers to work on anything they want to. The only rule is that the employees must present what they have been working on at the end of the day. From this single day of freedom, a large number of the company’s annual innovations are born. This is the same concept that Google uses with their ‘20% time’. The idea is that for 20% of a Google employee’s time, they are allowed to work on any project they want. It is said that roughly 50% of all Google innovations every year are birthed in 20% time.

A Final Proof

As final proof of all this in action, Daniel points to Microsoft’s attempts to create an encyclopedia in the 1990’s called, Encarta. Microsoft paid well-managed teams tons of money to create for the project. Then Wikipedia came along. The model of Wikipedia was to allow people to write about what they love, for free. Today, Encarta is gone, but Wikipedia is one of the largest websites on the planet, simply because people working on things they truly care about will outperform even the highest paid workers under the right conditions.

In closing, Daniel states that if more businesses were to allow their employees to perform work they actual wanted to be doing, many more companies would enjoy success using this 21st century business model.