In the book (and film) ‘The Devil Wears Prada’, protagonist Andrea Sachs takes up a seemingly impossible job as second assistant to Miranda Priestly, driven purely by the lure of a better job. Rather than enjoying the work she does, she chooses to grin and bear it in anticipation of other rewards. Or so it seems. In reality, though, Andrea actually rises to the challenge, finding fulfilment in her style makeover, being able to please a difficult boss, and succeeding at the toughest of tasks. While the motivation to work is seemingly straightforward – a stepping stone to another job – there are many intrinsic factors, such as job satisfaction, that drive Andrea. What she essentially faces is Extrinsic Incentives Bias.
“Extrinsic Incentives Bias is when we tend to assume that someone who works hard in their job is solely motivated by monetary factors, rather than other factors, such as intellectual stimulation,” says career counsellor, Reshma Kondapalli. “There are two kinds of motivation in a job. One is extrinsic, which is driven by external factors – mostly rewards. The other is intrinsic, which means the incentives come from within. When we undervalue the intrinsic incentives of people, and instead choose to believe that they’re driven solely by extrinsic incentives, this is bias.
“Managers and colleagues in organisations overestimate the value that employees place on money and sometimes end up neglecting the other factors that make the job worthwhile. On the other hand, the same managers and colleagues end up attributing ‘nobler’ reasons, such as personal growth, to themselves.”
The term Extrinsic Incentives Bias was coined by management scientist Chip Health from Stanford. In one of his experiments, he requested 25 managers from a Citibank call centre to pick 29 customer service representatives and to then attribute intrinsic and extrinsic rewards to each of them. The managers believed they knew the reps well, and were confident in their assessment using rewards such as salary and job security on top, while skill development and satisfaction ranked low. Health then asked the reps to rank their own rewards. It turns out that intrinsic factors featured higher on the list.
“This bias doesn’t just apply in the workplace. Even in schools or colleges, the general perception is that student behaviour and performance is driven by tangible rewards, such as grades or prizes,” says Reshma. “Sometimes, this can even be to avoid a negative outcome such as a punishment. However, the joy of learning and doing well is often overlooked. People get the job done when they’re extrinsically motivated, but they get the job done well when they’re intrinsically motivated. Whether it is sports, art class or writing an essay, there are other factors such as curiosity, the challenge, autonomy and overall recognition, which can motivate as much as grades.”
In short, there are three basic factors that contribute to Extrinsic Incentive Bias. The first is the high value we place on extrinsic rewards. The second is to overlook motivation that comes from within. And the third is the misperception of motivation. So how can we avoid this bias, or at least learn to recognise it? Human Resources consultant Tariq Sengupta has a few pointers:
1. Don’t focus only on bonuses and promotions
Yes, bonuses and promotions are important, and it can be disheartening when you’re overlooked for them. However, this doesn’t mean that an employee needs just that to be satisfied. You also should focus on other aspects of the job and workplace – building a suitable office culture, ensuring that there is creative and intellectual stimulation, or factoring in the opinions and ideas of employees with merit.
2. Everything isn’t quid pro quo
Give and take is not transactional unless you’re complete strangers. At work, there needs to be a culture of support and care as well. Perhaps you’re offering a bonus or commission for a job well done. But your employees may prefer a stronger PoSH policy or flexible timings, so that childcare is easier.
3. Don’t dismiss extrinsic rewards entirely
Look at each situation uniquely, and ensure that external rewards and internal ones are balanced. The former can motivate people for uninteresting or boring projects. Make sure they’re specific to the particular job or behaviour, and phase them out once that job is done. Too much reward may decrease motivation, as the employee then feels entitled to it on a regular basis. In most cases, people are in the job for a mix of both internal and external satisfaction, so balance the two equally.
4. Communicate
Effective communication can change the way your employees work and respond. Hold feedback sessions every month on what each person’s motivating factors are and keep them in mind to help optimise performance.
5. Practice empathy
If we believe that our own motivators are creating meaningful work and being satisfied, then it is important for us to believe the same of our peers and colleagues. Empathise and put yourself in their shoes.
A system of intrinsic rewards seems ideal, since it comes from within and doesn’t need reinforcement from the environment. However, we don’t live in a bubble, so recognition and financial rewards are just as important. The key for managers and peers to avoid Extrinsic Incentive Bias is to focus equally on the two aspects rather, than overvaluing one and dismissing the other.