Essay

The Science of Intrinsic and Extrinsic Motivation, and the Implications for Society

By Duff McDuffee on September 22nd, 2009 1

I recently watched a very interesting, much-linked-to-and-discussed TED talk with Dan Pink entitled “on the surprising science of motivation.” Pink presents a case for why extrinsic motivation—rewards and punishments—worked great for manufacturing and compliance, but is counterproductive for knowledge work and creativity. He cites many interesting psychological studies as to why intrinsic motivation—a desire for autonomy, mastery, and purpose—works much better for engagement and self-direction, critical factors for contemporary knowledge work.

Pink presents two kinds of radical changes to workplaces that increase intrinsic motivation: 20% time and the Results-Only Work Environment (ROWE). 20% time is famously employed at Google, where employees get to work on whatever projects they want for 20% of their designated hours. This unusual work structure has been said to have given birth to many of the cool Google features many people love, such as Gmail. ROWE is an even more radical idea, which is that employees are given full autonomy to work whenever they want, from wherever they want, and meetings are optional. The only things that matter are getting results defined by the company.

Many blogs in the personal development/marketing sphere have covered ROWE and 20% time, usually very positively, and rarely covering any socio-cultural, economic, or political aspects of these ideas besides that of increased productivity. What would be the likely implications for society if such measures were much more widely implemented? How might they benefit society, and what potential risks or drawbacks would there be?

I consider these to be important questions for the future of personal development. Many people in developed nations cite work as their number one stress in life. Reducing stress and increasing meaningfulness of work would benefit many people, and could be a source of rich personal development. But these innovations in management could also have potentially negative downsides for the individual and society.

Much of the online personal development blog sphere is dedicated to finding meaningful work, usually through small-business entrepreneurship. Many buzzwords and catch phrases have been created to capture the spirit of doing what you love and getting paid for it, such as solopreneur, ittybiz, career renegade, the 4-hour workweek, black sheep, biggification, the art of nonconformity, and escape from cubicle nation. Most personal development bloggers are not seeking meaningful work within existing workplaces, but many are excited about 20% time and ROWE, as these business structures promise much of the same opportunities for autonomy, mastery, and purpose as entrepreneurship, without as much of the risk.

The Good

Dan Pink defines autonomy as “the urge to direct our lives,” mastery as “the desire to get better and better at something that matters,” and purpose as “the yearning to do what we do in the service of something larger than ourselves.” These are self-actualization needs as defined by Abraham Maslow. It could hardly get better for human beings to have all of our basic needs met and to feel like we are contributing to society by doing what we most love.

20% time allows employees to work on what they find most interesting, bringing out creative ideas that we want to work on. No worker would rationally object to that. ROWE allows employees to work in ways that fit their energy levels and lifestyles (e.g. family life), while encouraging creative solutions to problems instead of just putting in your hours at the office. These strategies create conditions for the best of entrepreneurship to be enjoyed by employees of existing businesses.

ROWE and 20% time have been shown to be better for productivity and creativity, which if implemented generally would benefit the economy as well. Existing management that emphasizes extrinsic rewards is bad for creativity and productivity, as Pink argues.

External motivation creates massively unequal pay scales between the highest-paid executives and salesmen and the lowest-paid administrative and service workers. If intrinsic motivation was taken very seriously, there would be no rational justification to pay CEO’s thousands of times more than janitors and customer service workers. Indeed, more and more CEO’s, lawyers, and high-powered executives are quitting their financially lucrative jobs to find or create more meaningful and personally satisfying work (Jonathan Fields and Pam Slim are two great examples).

Taking intrinsic motivation seriously, it would be more rational to have salary caps and could lead to a more equitable distribution of wealth between rich and poor—or at least between rich and middle-class.

The Bad

On the other hand, since it is unproductive to motivate knowledge workers with financial rewards, owners and shareholders of companies might exert pressure to pay employees less and profit off of them more. Even though technically this is irrational behavior according to the intrinsic motivation theory, the structures of publicly traded corporations that require maximizing quarterly returns are not likely to change overnight. Companies will still legally be required to maximize profit, and paying employees less is an immediate boost to profit margins. In addition, people in power have throughout history acted irrationally to maintain their own selfish interests.

Seen in this light, 20% time could be a way for management to be not less but more authoritarian, managing not just external actions but internal feelings too, for the benefit of an elite minority. Getting slaves to love their slavery is the ultimate act of coercion. This would prevent any meaningful political changes. It is already difficult enough to organize a populace saturated in spectacle and infinite consumer distractions.

ROWE could create hypercompetition for low-paid but meaningful jobs, as currently is the case in the non-profit sector. ROWE could also exacerbate the ageist trend of firing higher-paid, older employees in exchange for young, results-producing and meaning-driven Gen Y workers.

If implemented by itself, ROWE might transfer business risk from owners to employees, like partners of a firm without any stock. Those who do not get results will get fired, even if they put in far longer hours but just had bad luck with their particular solution, or suffer from a medical condition like Chronic Fatigue Syndrome. In countries like the United States that have little-to-no social net, this could create massive anxiety for individual employees, thus making work much more unpleasant. It could be potentially disasterous to get fired in a society with little social net where nearly all companies have ROWE, for companies would engage in even more fierce competition for the most productive employees, creating a kind of Social Darwinism.

Meeting all one’s needs in one workplace could create a corporate cult. Google’s campus has a cafeteria, gym, and even a Buddhist-inspired personal development center. Getting fired or laid off would be as devastating for the individual as being excommunicated from the Catholic Church in the Middle Ages, losing all of one’s income, meals, friends, social network, meaningful activities, gym membership, and religious services all at once.

Hypercompetition of ROWE could encourage cheating and cutting corners not just by corporations, but also by individuals within corporations. On the other hand, lots of employees cut corners as it is. But with potentially less oversight by management, with fewer policies and procedures, what would stop someone from doing the minimum amount of work on a project? Or to put it another way, what kind of results will we value—short-term or long-term? High quality or low quality? Tim Ferris, ROWE supporter and author of the 4-Hour Workweek, is famous for cheating at martial arts. Is this the kind of result we want to encourage in business?

Some tasks and projects and even job roles are things that nobody in any society enjoys doing. I often wonder if very few job roles exist that are inherently meaningful and deeply fulfilling. Most people seeking meaningful work end up as some kind of Life Coach or Marketing Consultant. Working one-on-one with intelligent and creative people to help solve their problems and seeing results is much more meaningful for most people than working on problems that might never be solved, that deal in complete abstractions, that involve repetitive and monotonous tasks, or that require grueling physical labor.

There will still be need for manufacturing work and physical labor (unless we start mass-producing robots!), which is still best under the traditional management of external rewards. Increasing the meaningfulness of white-collar jobs may create an even larger wage and even meaning gap between white-collar and blue-collar jobs.

Accounting for the Social Costs of Intrinsic Motivation

Many of these potential costs of motivating employees with intrinsic motivation must be dealt with at a collective level, not simply by corporations or individuals. Here are some of my ideas as to potential solutions that could integrate such things as ROWE and 20% time while accounting for their potential problems.

Change the structure of publicly-traded corporations to eliminate the legal requirement for maximizing quarterly profits. This is of course a massive change but would be necessary to prevent against abuses of employees by owners. Whether or not we implement intrinsic motivation structures within business, I think this is an important step towards creating a more just and sustainable world.

Create a very solid social net. To prevent anxiety from hyper-competitiveness and to ensure basic needs of individuals are met, we need to ensure that sick and unemployed people are taken care of. If we can implement one radical idea like 20% time or ROWE, then we can implement other radical ideas like universal health care (hardly radical of an idea in most developed nations) and even guaranteed minimum income. These programs are best if publicly funded to prevent cannibalization from corporate entities. This extends the idea of “paying people adequately and fairly, then giving people lots of autonomy” to beyond a single workplace to society generally. Providing a guaranteed minimum income could create conditions for massive innovation and entrepreneurship.

Implement intrinsic motivation fully throughout society, from top to bottom—globally. This would result in a radical leveling of income from rich to middle class (the poor will likely still be involved in low-paid manufacturing, physical labor, and service jobs, which perhaps can be subsidized and given more external motivation with the excess revenue from capping salaries). Cap executive and management salaries across the board for all companies to some reasonable amount like $100k. This would make salaries consistent with both intrinsic motivation research as well as positive psychology research that shows diminishing returns for personal wealth above subsistence levels. While this may seem like a radical notion, reducing the income gap in this way would be the most rational course of action for our economy based on current psychological science. Our existing paradigm of economics is lagging far behind our understandings of what makes people happy and productive (unless there is other contradictory research I am not aware of). By reducing the wage gap, we will free up billions of dollars for paying employees living wages in developing nations.

It may even be more rational to pay employees much more for those meaningless jobs that require compliance and straightforwardness, since these jobs are the only ones apparently more productive with the use of extrinsic motivation. In a meaning-based economy, the meaningless jobs are the ones that are rational to reward financially. This of course contradicts the “do what you love and get paid oodles of $$$ for it” philosophy of most Life and Marketing Coaches, which is irrational based on the psychological research Dan Pink has presented.

Revive local communities and the public sphere. To avoid the corporate cult that enslaves employees by controlling their social and religious lives, we need non-commercial local communities that are rich with social connections and meaningful activities once again. Online communities play some role in an individual’s life, but nothing like flesh-and-blood social networks that used to bond individuals for life. Since many jobs will probably always lack intrinsic meaningfulness, community is a strong requirement for finding that connection and sense of purpose. Positive psychology research has also shown that meaningful work is far less important to living a meaningful and happy life than we often think, while intimate relationships and community make a much bigger difference. Perhaps if we implemented lower salaries, we could have much higher taxes on corporations, making available large funds for public works and common spaces for community to form once again.

Changing these structures would require mass political and social action, as well as an enormous shift in how we think about motivation. In fact, these changes would take no less than a revolution, since they would massively overthrow existing power elites and radically restructure society and economics. Whether you agree with my conclusions or not, the implications of research on intrinsic and extrinsic motivation certainly have very significant implications for society and culture.

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27 responses to “The Science of Intrinsic and Extrinsic Motivation, and the Implications for Society”

  1. @mrteacup says:

    It seems like a lot of what Dan Pink is writing about was covered by Alfie Kohn's Punished by Rewards, which was first published in 1993. I like both authors and I think there's room for both books, but I feel like Pink presents it as a new revelation, which it is not.

    Whatever the benefits of intrinsic motivation are, I don't think implementing it would lead to a more just society. As I've probably mentioned before, we should distinguish between the romantic/artistic critique of modern society (monotonous, unfulfilling, uncreative, alienating) and the social critique of capitalism (an exploitative, unjust system containing class divisions). Since these two ideas were fused together in the 60s, we've come to believe that we can achieve the goals of the latter by overcoming the problems of the former, but I think this is ultimately mistaken. The fact that progress is being made in building a more creative, fulfilling society is actually a sign that the system can continue to be exploitative despite integrating that part of the critique.

    These ideas about intrinsic motivation seem to say otherwise: since no-one needs more than $100k per year to be fulfilled (and there are even studies that show that a salary over $50k doesn't create extra happiness), that extra money can be redistributed to improve the lives of the poor. But isn't there circular reasoning here? If high salaries don't improve productivity or creativity, and they also don't provide greater happiness among employees, then our compensation system is simply irrational. But if these two things were true, then employees would never seek higher compensation and employers would never provide it, and this situation wouldn't exist at all.

    The flaw comes from the assumption that greed lies at the heart of capitalism, a fantasy which is necessary to provide a closure in our anti-capitalist ideology. Greed is the foreign object which intrudes into our society, disrupting the Ideal Ego of our just, fair and good society and instead generating suffering and exploitation. Even though we are fighting against exploitation, the idea that human culture is still innately friendly, loving and generous is a fantasy that must be preserved at all costs, which leads us to believe that radical change is unnecessary, we just need to eject the foreign object.

    The only way to understand intrinsic motivation is to realize that the Wall Street stock trader making hundreds of thousands of dollars a year is self-actualized and intrinsically motivated. Since a salary over $50k no longer provides substantial differences in material well-being, we can only explain the desire for a higher salary as a way of symbolizing to yourself that what you are doing is valuable to society, you are contributing in meaningful ways that benefit people, participating in something significant that's larger than yourself, etc. That's why rich people are extremely defensive of the idea that they, through hard work and talent, are responsible for their success. If they were just greedy, why would they care if they just got lucky?

    • But if these two things were true, then employees would never seek higher compensation and employers would never provide it, and this situation wouldn't exist at all.

      The additional assumption needed to account for the seeking and providing of additional compensation is that human beings are rational and have all available information. Dan Pink seems to imply (by giving a presentation at all on this subject) that if more people knew about the science of motivation, that they would act rationally and change. A different argument is that people are not in fact rational, which would lead to a discussion of how to account for the fact that people do not do what makes them happy. And a third position would say that actually human nature is such that people ultimately seek power, not happiness.

      I'm not sure how you conclude that if human culture is innately friendly, radical change is unnecessary. The argument I presented here is that basically if people are rational, and the science of motivation as presented by Pink and others is true, then radical change is necessary!

      I agree that the Wall Street stock trader is self-actualized, and I think it is rational to take away or cap incomes nonetheless, for making more money is not the only or even best way to symbolize value to society.

    • "But if these two things were true, then employees would never seek higher compensation and employers would never provide it, and this situation wouldn't exist at all."

      The additional assumption needed to account for the seeking and providing of additional compensation is that human beings are rational and have all available information. Dan Pink seems to imply (by giving a presentation at all on this subject) that if more people knew about the science of motivation, that they would act rationally and change. A different argument is that people are not in fact rational, which would lead to a discussion of how to account for the fact that people do not do what makes them happy. And a third position would say that actually human nature is such that people ultimately seek power, not happiness.

      I'm not sure how you conclude that if human culture is innately friendly, radical change is unnecessary. The argument I presented here is that basically if people are rational, and the science of motivation as presented by Pink and others is true, then radical change is necessary!

      I agree that the Wall Street stock trader is self-actualized, and I think it is rational to take away or cap incomes nonetheless, for making more money is not the only or even best way to symbolize value to society.

      • @mrteacup says:

        I have a hard time believing that you could justify salary caps and higher taxes on the wealthy with the argument "money doesn't buy happiness".

        That idea is thousands of years old, and a core teaching of the same religion that capitalism is rooted in. The whole idea of investment is that spending your money is a temporary pleasure at best, but building a business and providing for your family is much more satisfying.

        • It may not be practical, but it salary caps do seem to be an implication of this research, since high salaries come from the assumption that more money is a motivator for productivity.

          But solutions aside, what did you think about the pros and cons I listed? Did this get to the heart of the matter or miss what's most important?

          • @mrteacup says:

            I think the implication is that people aren't motivated by money as something that can buy them stuff. But it also works as an indicator about what society values, and I do think people are motivated by that. The idea of doing something that is personally meaningful doesn't take into account the way that meaning is socially constructed, and salary is a (abstract and sometimes arbitrary) way that value is signaled to members within a culture.

            One way of looking at it is Olympic athletes. On one level, they are trying to win a gold medal, but wouldn't it be naive to say "Why would you train for decades just to get a small amount of gold?" There's a distinction between getting a reward (you are now X dollars richer) and being rewarded (a social institution signals that you deserve X dollars).

            This is why there is always that problem with people who have money through birth, luck or cheating – wealth functions as an abstract signifier of value, but that means it can easily be disconnected from what it is intended to signify, so the culture is heavily policed for "inauthentic" forms of wealth: manufactured pop stars, rich heiresses, welfare queens driving caddilacs, people who lie and cheat to make money. Even anti-corporatism, like insurance companies who rip us off and pocket the profits fits into this narrative.

            There is a sense that these people are playing outside the rules, and we need to prevent that from happening. The only problem? Playing inside the rules is still capitalism, so this isn't really an anti-capitalist position.

            As for ROWE, I think you're absolutely right to point out that there are downsides. Even though there are some benefits, it's not a panacea.

          • Interesting. Lots of food for thought, as always.

  2. Chris Edgar says:

    Thanks for this. Just a couple of observations. I'm skeptical of "implementing intrinsic motivation," which I understand means government policies like a compensation cap premised on the idea that people are intrinsically motivated. If most workers really were primarily driven by passion, I would think employers wouldn't be so focused on using financial incentives to motivate their workers under the status quo. That is, unless we believe psychology can be reshaped through policy — that mandating a compensation structure that assumes intrinsic motivation will make people more intrinsically motivated.

    I think this is where the (ideal) role of personal development comes in — showing people the futility of chasing material things for fulfillment, and helping them live life from a place of fulfillment such that their careers, relationships and so on are an expression of their preexisting wholeness. Much of the personal development work out there doesn't have this orientation, and I think this site is valuably pointing that out.

    • I understand your skepticism, but I'm curious to try and push the argument a little further just for a thought experiment.

      We have a government mandated minimum wage, why not a government mandated maximum wage? I do think that all sorts of economic and social policy is based on assumptions of extrinsic motivation—the very presuppositions of classical economics assume such.

      I also agree that personal development ideally can play a role in showing people the futility of chasing material ends, and that this should be one of its primary purposes.

  3. Fraser says:

    How about the implications for education? School is "carrot and stick" motivation taken to the extreme. The emphasis on grades, and punishment for non-conformity is absurd. Creativity and intrinsically motivated learning could hardly be more stifled.

    To its credit, the school system is perfect preparation for life as a wage slave. That may have worked 50 years ago. It's exciting to think of the changes that are coming. Grades are becoming less and less meaningful. In the UK (where I am) everybody able to spell their own name attends university, totally undermining the value of a degree.

    The biggest change to manifest so far, is arguably in the music industry. The greed driven middle men are being removed by file sharing, and the growing ability for anyone with an instrument and computer to produce and distribute their own music. Without multi-million dollar marketing campaigns, the emphasis is on creating something that genuinely resonates with its audience.

    • Excellent points. Education is lacking in many ways. Chris Hedges has a great chapter on education in his new book Empire of Illusion, where he talks about the elite American Universities are now mainly a game to see who can become part of an elite minority who gets all straight A's but can't think about the big questions.

      I do think the music industry is changing dramatically, although I wonder if the power brokers will simply change to distribution networks like iTunes/Apple rather than the producers. But there do seem to be more innovative experiments of musicians selling straight to consumers that are hopeful.

  4. Koushik says:

    I like your blog–a much needed counterpoint in this web age of anyone and his brother starting a personal development website. Some of the points you mention are related to Steve Pavlina's philosophy that "A fixed income is a sucker bet". I have responded on his forum mentioning the same points as you elucidate in your post–e.g current reality (assuming that we do not acheive singularity till the end of the century) is that we have a lot of "low purpose" jobs–and if we start looking down on the people performing these jobs as unconscious human beings, we lose empathy in society.

    –Contd.. in next comment

    • Thanks, Koushik! I was hoping our blog would be that counterpoint, which I agree is "much needed."

      Yes, totally agree. Most jobs are low-purpose right now. I hope that we can move towards more high-purpose jobs globally, but I think we should be concerned that in seeking our own purposeful jobs we don't just outsource the meaningless jobs to people we don't know in developing countries.

      • Koushik says:

        I see where you are coming from @outsourcing, but I believe that the demographic reality of the world is such that one cannot stop re-distribution of jobs to other countries (maybe I am biased since I am originally from India but living in the US).

        I actually believe that we *should* move towards more automation for low-purpose jobs–but automation for cleaning public toilets and sending postal mail is still a technological mirage (unless we stop investing in Wall-street like short-term interests which brings us back to your post). The current reality for *our* lifetime is that we would continue to see such jobs being done by humans. Hence we should not lose empathy for such people, and be grateful to them for doing such jobs so that we can carry out out "high-purpose" activities. Steve's position lacks this empathy.

  5. Koushik says:

    However, I would like to point out the key difference in your points vis-a-vis PD authors. You are looking at the issue from a social justice POV whereas most PD authors somehow do not want to deal with "social equality" – sometimes I feel that the implicit argument in their ruminations is that Social Darwinism (I like that term !) is a reality, there will masses of people who would continue tolieve "unconsciously" (never mind that they may have biological problems), and so we have to look at the issue from a subjective reality standpoint.

    Again, I will visit this blog frequently–and might start one of mine too along these lines !

    • Yes–one of the reasons for this blog is that social justice, and in fact any consideration of culture or society at all, is left out entirely from discussions of personal development. I find that this leads to all sorts of strange conclusions, like the "subjective reality" arguments Pavlina is fond of. Seeing reality as basically subjective can lead to ignoring the feelings and needs of others, and from seeing reality as collective reality.

      I do tend to agree that there are many people living somewhat "unconsciously," this is often the case because their basic needs aren't being met. I think this is much more due to massive inequalities in wealth globally and socio-economic-political structures than any individual efforts or attitudes.

      I hope you do come back often! You can get free email updates by subscribing in the upper right corner. And if you do start a blog like this, please let us know about it! We'd love to have more conversation along these lines in the PD blog world.

  6. Hi, Duff, This discussion is fascinating and being carried on at a profound and intelligent level. I wasn’t aware of ROWE. It winds up leaving me at the same place I was when I left the radical movement as a young idealist back in the 1960s–with a deep awareness of the unlikelihood of reforming society along any rational or humanistic lines.

    However, it does have profound implications for those of us like myself who wound up in self-improvement type careers. (I am an MSW from Columbia who shortly after social work school discovered astrology and ultimately left social work for self-employment these past 40 years.) If extrinsic rewards are largely ineffective in motivating people to change, and yet our methods are in some part influenced by an extrinsic-reward culture, we must think through how we approach clients and keep them motivated for doing the often painful self-examination that growth requires. Thank you–you’ve given me much to think about. Donna

  7. Haider says:

    This article deals with a number of issues, but I don't agree with the way they've been connected.

    Salaries aren't simply paid as a motivational tool. Employees are paid for the value (a.k.a. results) they bring to the company. Whether external motivations are used or intrinsic ones is besides the point (i.e. it shouldn't influence salaries and is certainly not a reason to introduce salary caps).

    We should also try to turn our cynicism down a notch: when companies expect their employees to simply do their work, we complain; and when they try to offer more facilities, we complain.

    What I find especially unsettling about the article is that it presents happiness and money as a dichotomy: either be happy or make money. If you're not enjoying your job, then you deserve more money. If you do enjoy your job, then you deserve less money. Now that's a spiritual crisis and a moral crime capitalism would never dare commit.

    • Thank you for your comment, Haider.

      Why are employees paid for the value they bring to the company? Either this is to motivate employees to bring more value (through rewards), or to make them happy. But psychology research shows that rewards do not increase value produced, nor does more money make people happy. The research shows that people are happier working on things they love than getting paid enormous sums of money. Therefore it is irrational to pay people excessively large amounts of money.

      Do you have a rational reason why employees should be paid more for creating more value that is based in psychological science, or is this simply your irrational bias?

      The second line of argument is more Marxist: who is creating the value, really? Workers all create the value–the people at the top simply coordinate value-creation by employees. Therefore value is created by all employees and should be shared equitably.

      It's not either be happy or make money, according to psych research, but making more than abotu $50k does not in any way whatsoever increase happiness. This has been shown again and again. It is one of many irrational biases we tend to hold, but does not fit the science.

    • Thank you for your comment, Haider.

      Why are employees paid for the value they bring to the company? Either this is to motivate employees to bring more value (through rewards), or to make them happy. But psychology research shows that rewards do not increase value produced, nor does more money make people happy. The research shows that people are happier working on things they love than getting paid enormous sums of money. Therefore it is irrational to pay people excessively large amounts of money.

      Do you have a rational reason why employees should be paid more for creating more value that is based in psychological science, or is this simply your irrational bias?

      The second line of argument is more Marxist: who is creating the value, really? Workers all create the value–the people at the top simply coordinate value-creation by employees. Therefore value is created by all employees and should be shared equitably.

      It's not either be happy or make money, according to psych research, but making more than about $50k does not in any way whatsoever increase happiness. This has been shown again and again. It is one of many irrational biases we tend to hold, but does not fit the science.

  8. Haider says:

    Duff, just so I can understand your thinking a little better:

    1- Why would a company want to make its employees happy?

    2- How do you classify who is "at the top" and who's at the bottom? For example, is an architect considered a worker or a coordinator?

    • 1. I don't know why others would want to make employees happy, but I'd do it because it is the right thing to do. I'm a person, and I want to be happy. If business could be done in a way that all stakeholders are happy, this is a good thing–is it not?

      2. At the bottom is people who are paid less, often much less.

  9. Haider says:

    OK, this is interesting, Duff.

    The points you raised about why it's "irrational" to pay employees more money has nothing to do with psychology research. At least, that's not the stand point I'm arguing from. I'm speaking from a business point of view.

    Private companies are created by individuals who would like to make money, and who sometimes have a vision for the value they wish to share with the world. I can have a spa to make money, but also because I care about well-being and love to give people the opportunity to relax.

    I would usually require the support of other people in my endeavor to offer such services, and so I hire others (my employees) to help me out with my vision. I would like to make money, and they would like to make money. They can share my vision, or couldn't care less about my vision. All they might want is to afford a place to sleep and some food to eat. They could enjoy their job or hate their job.

    What matters to me isn't how much they love or hate their job, but how much of a contribution they are making to the company, which in turn translates to better services and more sales (and inching closer to the vision I have). However, if I would like to make others happy (like you do, and I share this value with you), then I'd be concerned about my employees, their well-being and the happiness they are experiencing. Usually, a passionate employee is able to contribute more to a company than an employee who is simply enduring the agony of a job in order to get paid at the end of the month. The contribution these two employee types can make is different. I would like to help my employees enjoy the experience of working with me so that they don't look for work elsewhere, so they can contribute the most they can and so they can experience happiness on an individual level.

    But the value of an employee for my business depends on the value he is able to bring to the business. If my business model is sound, then it would mean that I'm making more money as I progress towards my vision (i.e. the two are in alignment). Therefore, the value of my employees would be tied to the amount of money they help me make.

    (cont.)

  10. Haider says:

    I should note that my concern isn't to provide employment for citizens. That's neither my aim nor my obligation. I am entitled to have as few employees as I see fit for the running of my business.

    Now, salaries are intended to correlate with the value employees bring to a company. Management is serious business. It plays an extremely important role, which no individual employee can play on his own while sticking to their own role in the company. In web development (as in many other fields), you can have a couple of developers and a good project manager outperform a team with a thousand developers and no manager. To say that managers don't provide value (and only coordinate value-creation) is false. Their coordination is an irreplaceable value. It takes a certain mindset and a number of qualities to be able to manage a team. These qualities are valuable to companies, and those who possess these qualities should be paid handsomely.

    It's not the business of government to decide who is most valuable to a company and how much employees should get paid. If I'm worth a million to a company then I'm entitled to earn a million. Whether any of that money will make me happy or not is none of anybody's business. It's my decision how I spend that money.

    As for how you drew the line between who's at the bottom and who's at the top, do you honestly believe that the people who bring more value to a company are simply the ones who are being paid LESS? So a janitor brings more value to an architecture firm than an architect?

    Apologies that my comment is long, but I found the topic of this post (and your business views) interesting! 😀

  11. Great TED video from Dan Pink about ROWE.

    It's so true what he says, in a nutshell if you do mechanical work like moving boxes from one side of the room to another, you can financially reward your workers based on how fast they get it done because the solution of how to do it is clear.

    However, if you if you have more boxes then what that room can hold and you try to financially reward your team based on how fast they can figure out how to get all those boxes in there, all you do is stress them out because the solution needs time to flourish in their minds so financial rewards in this case don't matter.

    I'm in software and for over 15 years I've been telling my managers that my job can be done anywhere but it's that old 1900's mentality that if I'm not in my chair banging away at the keyboard, then I must not be doing anything. Such a downer for moral.

    It's time to move ahead and compete in new ways in this new global economy. It's time to stop spending company profits on new cherry wood desks and company cars. Let your team out of the locks of the "butt in chair" syndrome and let them truly be part of your company by giving the reigns to lead and try new things.

  12. […] fact, my friend Duff — who, I suspect, shares many of Ehrenreich's political views — makes a similar point in […]

  13. This is the hotest blog I read on my new Mac. I’m bookmarking for nostalga.

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