Money, Meaning, and Motivation

While there is a great deal of research that looks at the impact of money (an external reward) versus meaning (an intrinsic reward) on motivation to work, I just want to share one of my favorite examples of this.

The following example is based on some research by Dan Ariely, one of my favorite behavioral economists (although apparently that’s actually a misnomer, he’s a psychologist). If you have not read any of his books, I highly recommend them; he also has a column on most Saturdays in the Wall Street Journal.

Anyway, in this experiment, the researchers created a sheet of paper with a random sequence of letters on it and asked the participants to find instances where the letter S was followed by another letter S. The subjects were told that each sheet contained ten instances of consecutive Ss and that they would have to find all ten instances in order to complete a sheet. We also told them about the payment scheme: they would be paid $0.55 for the first completed page, $0.50 for the second, and so on (for the twelfth page and thereafter, they would receive nothing).

In the first condition, referred to as acknowledged, students were asked to write their names on each sheet prior to starting the task and then to find the ten instances of consecutive Ss. Once they finished a page, they handed it to the experimenter, who looked over the sheet from top to bottom, nodded in a positive way, and placed it upside down on top of a large pile of completed sheets.

In the second condition, referred to as ignored, students were not asked to write their names at the top of the sheet. After completing the task, they handed the sheet to the experimenter, who placed it on top of a high stack of papers without even a sidelong glance.

In the third condition, referred to as shredded, once the participant handed in their sheet, instead of adding it to a stack of papers, the experimenter immediately fed the paper into a shredder, right before the participant’s eyes, without even looking at it.

Ariely notes that the researchers were impressed by the difference a simple acknowledgment made. When they looked at how many of the participants continued searching for letter pairs after they reached the pittance payment of 10 cents (which was also the tenth sheet), we found that about half (49 percent) of those in the acknowledged condition went on to complete ten sheets or more, whereas only 17 percent in the shredded condition completed ten sheets or more. Indeed, it appeared that finding pairs of letters can be either enjoyable and interesting (if your effort is acknowledged) or a pain (if your labor is shredded).

But what about the participants in the ignored condition? Their labor was not destroyed, but neither did they receive any form of feedback about their work.

The results showed that participants in the acknowledged condition completed on average 9.03 sheets of letters; those in the shredded condition completed 6.34 sheets; and those in the ignored condition (drumroll, please) completed 6.77 sheets (and only 18 percent of them completed ten sheets or more). The amount of work produced in the ignored condition was much, much closer to the performance in the shredded condition than to that in the acknowledged condition.

The experiment showed that taking the meaning out of work is surprisingly easy. If you’re a manager who really wants to demotivate your employees, destroy their work in front of their eyes. Or, if you want to be a little subtler about it, just ignore them and their efforts. On the other hand, if you want to motivate people working with you and for you, it would be useful to pay attention to them, their effort, and the fruits of their labor (and it doesn’t take a lot of money to do this, but it does take some basic acknowledgment of their work).

There is one more way to think about the results of the finding pairs of letters experiment. The participants in the shredded condition quickly realized that they could cheat, because no one bothered to look at their work. In fact, if these participants were rational, upon realizing that their work was not checked, those in the shredded condition should have cheated, persisted in the task the longest, and made the most money. The fact that the acknowledged group worked longer and the shredded group worked the least further suggests that when it comes to labor, human motivation is complex. It can’t be reduced to a simple “work for money” trade-off. Instead we should realize that the effect of meaning on labor, as well as the effect of eliminating meaning from labor, are more powerful than we usually expect.

The results seem to support Maslow’s hierarchy of needs. Yes, people need to be paid a fair amount so that they can meet their basic needs. But beyond that, it is much more effective to motivate people intrinsically. In Ariely’s experiment that motivation is accomplished through simple acknowledgement.

After reading about this a few years ago, I tried to think how I might incorporate such findings into my teaching. One change I’ve tried to make is to write simple comments on every student’s homework, such as “good job” or “nice attempt”. Previously, I would just typically put a check mark on the paper indicating that I had logged it into my gradebook. The students were getting the same grade either way, but I’m hoping the simple comments may provide better motivation towards putting an honest effort into their assignments.

I have no way of knowing if that is the case, but if the results of the experiment above are any indication, my guess is that it does.

It also gives me an idea for a future April Fools’ Day prank…

Appendix: if you would like to read some more about this experiment, here are some details:

The subjects were MIT students who responded to announcements about the experiment that were posted in the student center, where the experiment also took place. Each subject participated in the experiment alone, without the presence of other subjects. Subjects were randomly assigned to one of three conditions: Acknowledged (N= 35), Ignored (N= 35), or Shredded (N= 34). Subjects were unaware of the other conditions. The basic task was the same in all three conditions: subjects were initially given a sheet of paper with a seemingly random sequence of letters and told that they would be paid $0.55 for finding 10 instances of two consecutive letters ‘s.’ Having completed the first page, they were then asked whether they would be willing to complete a second page for $0.50 (5¢ less). The process continued, with wages declining by 5¢ per sheet, until the subject decided to stop working. This ended the experimental session. Subjects then received payment for all sheets. Since we paid the subjects on a per-unit rather than per-hour basis, we accordingly measure labor supply in terms of units produced, not hours worked.

In the Acknowledged condition, the subjects were asked to write their name on each sheet prior to starting the task. The instructions explained that after completing the task, they would hand the sheet over to the experimenter who would examine it and file it away in a folder.

In the Ignored condition, the subjects were not instructed to write their name on the sheets, and in fact none did so. Moreover, the instructions explained that, after the subject completed the task, the experimenter would place the sheet on a high stack of papers. The experimenter in fact did so without examining the completed sheets.

The Shredded condition was the same as the Ignored condition except that the instructions explained that the completed sheets would be immediately put through a paper shredder. As the subjects turned in the sheets, the experimenter shredded them without a glance.

The subjects could cheat in all the conditions, given the absence of monitoring. Moreover, the incentives to cheat are arguably higher in the Ignored condition and even higher in the Shredded condition where the lack of monitoring was particularly salient. Moreover, in the Shredded condition, cheating was not only impossible to detect, but is obviously of no consequence since the sheets were immediately destroyed. To the extent that economic theory makes any directional predictions here, it would seem to predict the highest reservation wage in the Acknowledged condition, which requires more conscientious attention to a dull task, and lowest in the Shredded condition, where cheating is both possible and apparently inconsequential.


The results were exactly opposite of these predictions: the subjects exhibited the lowest average reservation wage in the Acknowledged condition (14.85¢), a higher one in the Ignored condition (26.14¢), and the highest in the Shredded condition (28.29¢). In other words, in the three conditions the subjects completed an average of 9.03, 6.77, and 6.34 sheets and received an average total of $3.01, $2.60, and $2.42. Fig. 1 shows the histograms of the number of sheets completed in each condition. As the histograms show, almost half of the subjects in the Acknowledged condition were willing to work until the wage dropped all the way to zero.

The Wilcoxon rank-order test reveals that labor supply was significantly greater in the Acknowledged than in the Ignored condition (exact one-sided p-value <0.001), while the difference between the Ignored and Shredded conditions is not statistically significant (exact one-sided p-value = 0.24). The magnitude of the difference between the Acknowledged and the other two conditions is quite striking: the subjects exhibit a reservation wage that is almost twice as large when their work is not acknowledged. The difference between Acknowledged and Ignored condition is not nearly as strong, which is somewhat surprising. The act of shredding the sheets without even looking at them is such blatant, unnatural violence toward the product of subjects’ labor that one might expect the subjects to respond much more to it than to the treatment in the Ignored condition, yet the difference between those two conditions is minor while the effect of being acknowledged is strikingly high.

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Jim Borden

Accounting Prof. at Villanova; happily married for 30+ years; father of 3 outstanding young men; vegan; interests: fitness, creativity, education, blogging, social media.

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