Why the Current Incentives for Work just Don't Work

An analysis of how incentives drive behavior.

opinion

There are all kinds of people — some who find work to be a chore, others who say they like what they do (out of social pressure — because everyone believes that only people who like what they do end up doing it well, and no one wants to be the person that is shamed for not doing what they like), and a few (very few) who actually like what they do.

Imagine you’re given a task to do. Suppose you can do it within 4 hours by yourself. But now imagine you’re given access to the solution of the task (you have some superpower that tells you the correct answer immediately). Would you use the superpower and solve the task instantly or work on it for 4 hours by yourself and come up with the solution?

I haven’t asked this question to enough people to get enough data points but amongst those I asked, most said they’d use the superpower. What I found interesting was that there were, in fact, some people who would rather do it by themselves. 😮

When probed for their reasoning, they gave explanations such as “it’s the right thing” or “it seems unfair to take shortcuts”. Some mentioned that work was a major source of their identity — but then I’d argue that you’re still doing the work by completing the task; you’re even doing it faster. So, it wasn’t directly about work. It was about something else — something commonly mistaken to be synonymous with work, but entirely different.

Effort. At the heart of all of those explanations was a single underlying reason — they didn’t want to appear that they weren’t working hard.

The keyword here is appear. So, these people were becoming less productive (i.e., taking more time to solve a given problem) simply because they wanted to show others that they were putting in a lot of effort.

This is puzzling — shouldn’t people’s work be measured by the end results rather than effort? 🤔 If you judge someone based on their efforts, you’re incentivizing them to take longer and spend more time (hence, showing that they’re putting in effort) rather than being more productive and actually completing the task.

If I can finish a task in 1 hour that someone else takes 1 day to complete, should I be paid less because it took less of my time? Absolutely not! This would be ridiculous — you would end up penalizing talent and everyone would intentionally slow things done. And although this is not done with regards to pay (at least, not that I’ve heard of), it is very often done with regards to recognition — people are praised for working longer hours rather than for the output of their work. But it’s equally wrong and foolish — why would you even have such an incentive that seems so obviously counter-productive in retrospect? 🤔

More importantly, why is it that whenever we see someone working very hard, we naturally assume that they’re a “good” person — in literature, this is called the “moralization of effort”. We assume that effort correlates with morality because they often go hand-in-hand (but not always — and that makes all the difference!). It does make some sense: Hard-workers have great self-discipline and do things that need to be done — whether they’re in the mood to do them or not. Wouldn’t you like to have someone like that on your team or as your business partner? 😄

So, the problem lies not so much with our initial assumption, but with the effects of this assumption — which incentivize people to do the wrong thing, which quickly evolves into a vicious cycle — everybody tries to show that they’re working the hardest. And once this happens, our assumption becomes flawed because we can no longer claim that people who work hard are better people to work with, because people are now working (very) hard to show that they’re working hard so that you think they’re better than others.

Phew. Was that a lot of meta-reasoning? Think about it in terms of financial markets: information about a stock is useful to decide whether to trade or not only if you’re the only one who has this knowledge. Once this information becomes public, everyone uses it to make the necessary trades and the market corrects itself. In the same way, once people have realised (and they definitely have) that others like hard-workers, this information becomes practically useless as they try to “game the system”.

For example, being the last one to leave office seems to be something that many working adults (or even interns) take great pride in. It’s as if the act of simply staying back in the office somehow makes them a better person than someone else who finished the same tasks much before and went back home to spend time with his/her family.

I’ve seen other examples of this too: people intentionally reply at ungodly hours to give others the impression that they were up working till then. Unsurprisingly, some people just use the “schedule send” feature of email clients to do this for them, and are fast asleep 😴 — probably dreaming about how others will see them in a good light.

All the above are examples of cases when people intentionally become less productive to gain “moral points” from others.

In case it has to be said, I’m not advocating against hard work — I sincerely believe that hard work is essential for progress and success. What I’m advocating against are the incentives that motivate people to appear to be working hard instead of actually working hard.

This brings us to the question: what can we do about this? The most obvious solution is to stop placing emphasis on effort alone.

If you pay a plumber on a per-hour basis, he has an incentive to take a very long time to fix the issue. So, you don’t pay the plumber for banging on the pipes — you pay him for knowing where to bang (source: unknown).

In the same way, rewards should be based on results and output rather than effort. Productivity, rather than effort, should be measured.