I’ve just come across a survey, comparing what employees want and what employers think they want.
Here is what employees said, starting with what’s most important to them:
1. Full appreciation for work done
2. Feeling “in” on things
3. Sympathetic help on personal problems
4. Job security
5. Good wages
6. Interesting work
7. Promotion/growth opportunities
8. Personal loyalty to workers
9. Good working conditions
10. Tactful discipline
Sounds about right, doesn’t it?
Now take a look at what managers think employees want, starting with the highest value:
1. Good wages
2. Job security
3. Promotion/growth opportunities
4. Good working conditions
5. Interesting work
6. Personal loyalty to workers
7. Tactful discipline
8. Full appreciation for work done
9. Sympathetic help with personal problems
10. Feeling “in” on things
The discrepancy in findings is shocking, isn’t it? What’s even more astonishing is that the survey came out in 1946(!) in Foreman Facts from the Labor Relations Institute of New York and was produced again by Lawrence Lindahl in Personnel magazine in 1949.
These studies have been replicated with similar results by Ken Kovach in 1980, Valerie Wilson, Achievers International in 1988, Bob Nelson, Blanchard Training & Development in 1991, Sheryl and Don Grimme, GHR Training Solutions in 1997-2001.
The survey reveals a decided lack of empathy on the part of managers, especially in relation to intangible rewards, such as appreciation, 'being in the loop’ and personal sympathy. Good wages are not what’s motivating performance.
What about incentive pay? Bonuses, share and option schemes and earn-outs are popular and prevalent mechanisms among young and established companies to motivate their top talent. As an economist, I fully approve of incentivising executive roles with performance-related pay, designed to align the interests of managers with those of the company’s shareholders. It, therefore, came as a surprise to come across a Ted talk by career analyst Dan Pink, who questioned whether performance incentives work in creative industries.
Pink talked about the so-called candle problem, created in 1945 by a psychologist Karl Duncker.
In his experiment Duncker gave people a candle, some pins and a box of matches and asked to fix a candle to a cork board wall, so that it does not drip to the table below. In this classic experiment participants usually try to fix a candle to a wall with a pin (which does not work), melt the wax and then fix the candle (does not work either), before finally realising that a box holding matches can be fixed to a wall with a pin and a candle can be put inside so it does not drip.
What’s interesting is that later on Sam Glucksberg, a scientist at Princeton University, repeated the experiment with two groups. In one group participants were offered a monetary reward, if they can solve the problem quicker than an average participant. No reward was offered to another group. Participants, offered a dangling carrot, arrived at the solution on average 3 1/2 minutes later, than those, who weren’t given a monetary incentive.
How about that?
It turns out that rewards work really well for tasks with a simple set of rules and a clear destination to go to. Rewards, by their very nature, narrow focus and concentrate the mind, which is why they work in so many cases. If the goal is clear, zoom in and go for it.
However, with creative tasks a clear incentive to come up with a new television format or to invent a new product, a ‘carrot’ does the opposite: it dulls thinking and dampens creativity. There is no clear solution to creating something new or innovative. Instead of focussing, a creative executive must look around, imagine broad possibilities, think ‘outside the box’.
Having worked in television, it is surprisingly enlightening to consider performance incentives traditionally put in place by production companies in a different light, inspired by Pink’s Ted talk. Pink argues that intrinsic motivation, autonomy, mastery and purpose are the real drivers of performance in creative fields.
It makes sense, especially in the context of entrepreneurs, who are autonomously motivated to get their ideas to succeed. Such conclusion is not, however, straightforward for a senior executive planning new hires or working on a new incentive plan. You can’t very well welcome a new executive with a contract, promising “a sense of purpose”, upon joining your company. Still, it’s apparent that effective compensation in creative fields must rely less on bonuses and earn-outs and instead deliver creative freedom, autonomy and permission to take risks via a comfortable flat salary and non-financial perks.
Do you work in creative industry? What do you think about my conclusions? Jot your thoughts below.