“Moneyball” And Why What We Assume About Employee Motivation is Wrong

This weekend, I saw the extraordinary new film by Social Network writer Aaron Sorkin, Moneyball. Starring Brad Pitt and Jonah Hill, the movie tells the true story of Billy Beane, the General Manager of the Oakland A’s, who decided to challenge the conventional wisdom that professional baseball should purchase players based on reputation rather than on performance. With the inspiration of a frumpy Yale graduate, Beane changed the rules of baseball because he became convinced that the pay structure was based too much on the person and not on the statistical data. When a franchise looked at data on actual performance, and not public perception of a player, real possibilities emerged for players that had been overlooked and underpaid. Beane traded some of his highly paid players, picked up undervalued ones, and went on to win the record for the most successive wins in baseball. All because he was willing to rethink the system of rewards, based not on tradition, but on math.

I was sitting at lunch with a friend who owns and manages one of the nation’s leading boutique accounting firms. He is a good and fair man, and he has built a successful practice because of it. But he took me to lunch because he is experiencing what other managers around the country are facing in the aftermath of the Great Recession: unmotivated and disengaged employees. Exasperated, Bob said, “I’ve tried everything. I give our employees more vacation time than other comparable firms. I pay more and increased bonuses this year. I pay 100 percent of their health insurance. And yet, they all seem not to care and to be looking for their first chance to get out the door. I don’t understand it.”

Bob and other managers keep trying to build successful businesses using the conventional wisdom: “If you pay them more, they will work harder, and you’ll win.” Managers who use this same reward system as in the past will find themselves with unmotivated employees, and they will watch as the employees run out the back door at the opportunity. A recent survey shows that 65 percent of employees are looking for new opportunities. Why? The changing nature of work, and the changing generations and what motivates them. Creativity and innovation, in contrast to mundane tasks, are not rewarded by money alone. Generation X and Millennials are motivated more by purpose than pay. These employees consider an adequate salary a base line for job satisfaction. But once it is in the right range for their needs, it is off the table and no longer the source of their motivation. In fact, studies show that an increase in monetary rewards can have the opposite effect of what was intended when it comes to right-brained tasks. So, what does motivate employees?

Daniel Pink explores this issue in his remarkable book Drive: The Surprising Truth About What Motivates Us. He persuasively argues that leaders make one faulty assumption about work, and this operating system is driving their entire rewards system. They assume that work is not inherently enjoyable, and therefore managers must “coax people with external rewards and threaten them with outside punishment.” But what if work is enjoyable? What if employees believe that their relationships, their creative tasks, and the meaning of their work are a source of motivation in and of themselves if they are given the right conditions to thrive?

Pink points to three conditions that motivate employees doing non-menial and creative work:

  • Autonomy: People want to do good work, so trust them to do it in the places and conditions that are most conducive to it. If women desire to work and have children, let them work from home on their own hours. If a 30 year old would rather work from Starbucks than a cubicle, trust that they will work best where they feel best. This requires that managers focus more on results than process. As Beane learned, it’s about getting on base, not paying for a player to look good on the team. (Law firms and accounting firms that still require employees to be present in an office and bill hours as a measurement of results, beware.) Here are some great suggestions for creating a flexible workplace.
  • Mastery: People want to get better at what they do, so create opportunities for learning and advancement. Invest in training, offsite education, and be creative in designing situations where the employee feels they are developing a specialty that is being rewarded, not with titles only, but with new opportunities.
  • Purpose: People want to know why they are doing what they are doing, so help them to understand context and the greater good. “Do it because I say so” doesn’t work for employees anymore, if it ever did. Every study points to enormous increases in employee engagement when employees understand the purpose of their work, and they are even more motivated if the purpose connects them with others or benefits the greater good.

Behavioral science has proven that these three elements motivate employees to bring their best to work. Yet, business, firms and nonprofits continue to ignore what science has proven time and time again. Companies that want to thrive need to rethink their outdated operational systems. Employees and customers want to be engaged, but the old ways won’t cut it.

Trust your employees, give them freedom, opportunity and purpose. Everyone else may keep playing the game the old way. But if you pay more attention to the science than to habit, you’ll keep getting on base, and you will create conditions where your employees and your company will thrive in the 21st century.

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8 Responses to ““Moneyball” And Why What We Assume About Employee Motivation is Wrong”
  1. Nancy Hartzler says:

    Dan Ariely wrote about this in his book, The Upside of Irrationality. He researches behavioral economics and shows interesting results from studies on motivation (smaller rewards work better than large ones = big bonuses are counter-productive) and the necessity of purpose in our work.

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