Human Economics

Routine, not-so-interesting jobs require direction. 
Non-routine, more interesting work depends on self-direction. 

Extrinsic Motivators
Extrinsic motivation comes from outside of the individual. Common extrinsic motivations are rewards like money and grades, and threat of punishment. Competition is in general extrinsic because it encourages the performer to win and beat others, not simply to enjoy the intrinsic rewards of the activity. A crowd cheering on the individual and trophies are also extrinsic incentives. The concept of motivation can be instilled in children at a very young age, by promoting and evoking interest in a certain book or novel. The idea is to have a discussion pertaining the book with young individuals, as well as to reward them.

Intrinsic Motivators
Intrinsic motivation refers to motivation that is driven by an interest or enjoyment in the task itself, and exists within the individual rather than relying on any external pressure. Intrinsic motivation is based on taking pleasure in an activity rather than working towards an external reward.

Students who are intrinsically motivated are more likely to engage in the task willingly as well as work to improve their skills, which will increase their capabilities. Students are likely to be intrinsically motivated if they:
  • Attribute their educational results to factors under their own control, also known as autonomy. 
  • Believe they have the skill that will allow them to be effective agents in reaching desired goals. 
  • Are interested in mastering a topic, rather than just rote-learning to achieve good grades. 

Algorithmic Tasks
An algorithmic task is one in which you follow a set of established instructions down a single pathway to one conclusion. Algorithmic jobs therefore are ones where the same task is done over and over. Algorithmic jobs are becoming easier to replace with technology or done with cheaper manpower.

Heuristic Tasks
A heuristic task involves trial and error and discovering the solution by yourself. Heuristic jobs involve creativity and doing something new often. Heuristic jobs; especially those that involve personal contact, creativity and problem-solving; are more difficult to replace with technology.

We humans are intrinsically motivated purpose maximizers and not only extrinsically motivated profit maximizers.
“Artists who pursued their painting and sculpture more for the pleasure of the activity itself than for extrinsic rewards have produced art that has been socially recognized as superior. Persons who are least motivated to pursue extrinsic rewards who eventually receive them.”
“What is true is that mixing rewards with inherently interesting, creative, or noble tasks—deploying them without understanding the peculiar science of motivation—is a very dangerous game. By neglecting the ingredients of genuine motivation—autonomy, mastery, and purpose—they limit what each of us can achieve.”
“Goals may cause systematic problems for organizations due to narrowed focus, unethical behavior, increased risk taking, decreased cooperation, and decreased intrinsic motivation. Use care when applying goals in your organization.”
Seven Deadly Flaws of Rewards and Punishments
  1. They can extinguish intrinsic motivation. 
  2. They can diminish performance. 
  3. They can crush creativity. They can crowd out good behavior. 
  4. They can encourage cheating, shortcuts, and unethical behavior. 
  5. They can become addictive. 
  6. They can foster short-term thinking.
Effectiveness of Rewards and Punishments On Algorithmic Tasks
“Rewards do not undermine people’s intrinsic motivation for dull, non-cognitive mechanical tasks because there is little or no intrinsic motivation to be undermined.”
Offer a rationale for why the task is necessary.
A job that’s not inherently interesting can become more meaningful, and therefore more engaging, if it’s part of a larger purpose. Explain why the task is so important and why the task's completion is critical to your organization’s mission.

Acknowledge that the task is boring.
This is an act of empathy, of course. And the acknowledgment will help people understand why this is the rare instance when “if-then” rewards are part of how your organization operates.

Allow people to complete the task their own way.
Think autonomy, not control. State the outcome you need. But instead of specifying precisely the way to reach the outcome; give them freedom over how they do the job.

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