Drive by Daniel Pink

Drive-Daniel Pink

Daniel Pink is going to make you think! This book challenges all of our traditional thinking about motivation and the role of compensation. No longer the old world of manufacturing or industrialization, modern psychology, economics, sociology and management literature is littered with studies that challenge our outdated thinking on compensation. Yet few companies are changing their compensation strategies. Why?

Summary:

Management thinking around compensation hasn’t changed in decades. While we have become real sophisticated about stock options, variable compensation schemes, the thinking behind them hasn’t changed. Pink proves two fundamental things:

1. That rewarding things that we want to happen doesn’t always make them happen and,
2. That punishing behavior that we don’t want doesn’t always stop that behavior.

Pink is not arguing that compensation isn’t important. Indeed, he argues that we must pay people fairly and must pay them enough to take worries about compensation off the table and allow them to focus on the job. However, if we think we can bonus all jobs to get better results, we are using flawed thinking.

MacGregor’s old work on Theory X and Theory Y in large part still holds true today. Extrinsic motivation (Theory X)is needed for some types of work and intrinsic motivation (Theory Y)is needed for other jobs. For jobs that are repetitive in nature (assembly line, construction , etc.) extrinsic motivators of a bonus for increased outputs works. For jobs requiring sophisticated problem solving (investment banking, software programmers, etc.) bonus structures will exacerbate the situation and in many cases will actually diminish productivity.

Pink’s book is full of case studies of companies who have broken the mold and are meeting with considerable success. He holds to his theory that individuals need to have three emotional needs satisfied:

1. Autonomy-some degree of control over their job (often referred to the how something gets done or not being micro-managed)
2. Mastery-most people have a desire to be expert at something. It is for this reason that many people have hobbies outside work to fulfill that need. Anyone know a great musician who toils in a dead end job?
3. Relatedness-people want to be part of a bigger whole and to have safe secure connections, whether those are in the workplace or in their personal lives.

Applying this to our Work:

For the CEO and an organization’s compensation program it is a must to read and understand the fundamental research behind Pink’s book. You may be pouring money down the drain and possibly causing lower productivity. Engagement in the workplace requires us to put in place leaders and processes that get’s the discretionary effort out of our most valued workers. That effort can’t be bought or sold!

Drive by Daniel Pink
 

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