How employers kill worker motivation and what they can do to change

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• ALISON STEWART:

  But first: With a new year comes new resolutions both at home and at work, but many of us aren't motivated enough to get through our to-do lists. In fact, more than half of American workers feel disengaged at their jobs.

  Our economics correspondent, Paul Solman, looks at what could motivate us into action. It's part of his weekly series, Making Sense, which airs Thursdays on the "NewsHour."

• DAN ARIELY, Author, “Payoff”:

  I think we could get people to both be more productive and happier.

• PAUL SOLMAN:

  Behavioral economist Dan Ariely, who's joined a chorus of economists bemoaning America's productivity slowdown.

• DAN ARIELY:

  We're less productive as individuals. We're less productive as companies, and we're more miserable.

• PAUL SOLMAN:

  But Ariely thinks there's something corporate America can do to boost productivity: better understand human motivation.

• DAN ARIELY:

  Motivation, basically getting people to be happy at work, everybody — everybody benefits.

• PAUL SOLMAN:

  Thus his new book, "Payoff."

  But before the specifics, a bit of backstory. As a teen, Ariely spent three years in the hospital, horribly burned. But it was just recently, when a stranger called him after her son suffered a similar fate, that he realized why people make an effort.

• DAN ARIELY:

  And she asked me to send her son an optimistic note about life. I didn't know what to say. You know, I — he was so badly burnt and…

• PAUL SOLMAN:

  As badly burned as you had been?

• DAN ARIELY:

  Worse.

• PAUL SOLMAN:

  Even worse?

• DAN ARIELY:

  Worse — worse than I was.

  And I wasn't sure that staying alive is better for him than not. Pain is just terrible, pain and desperation and hopelessness. And if it happened again today, I wouldn't want to continue.

• PAUL SOLMAN:

  Recalling his own cruel trial, Ariely broke down, out of the patient's sight.

• DAN ARIELY:

  And, eventually, I said, you know, life is going to be difficult and complex, and you will never have a normal life. But I also told him that technology is on the side of the disabled, because we can do things that we wouldn't be able to do without it.

  Even though it was a very difficult time with this kid, right, it gave me a sense of, I'm giving back, I'm helping somebody else, and I'm connecting with this kid, and I'm doing something that I'm supposed to do in some ways.

• PAUL SOLMAN:

  The lesson for Ariely: Our behavior is driven by emotion, not the conventional rewards like money.

• ALEC BALDWIN, Actor:

  Have I got your attention now?

• PAUL SOLMAN:

  And he thinks corporate America would do well to take note.

• ALEC BALDWIN:

  We're adding a little something to this month's sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize? The second prize is a set of steak knives. Third prize is, you're fired.

• PAUL SOLMAN:

  Money, threats of no money, Ariely has found they don't inspire hard work.

  Consider this experiment he ran at a computer chip production line in Israel. Workers who made their chip quota got either $30 or a voucher for pizza to take home to the family or a "well-done" text from the boss.

  We asked New Yorkers to guess the experiment's results. Which do you think would be most motivating?

• WOMAN:

  The voucher for the pizza.

• MAN:

  Cash in the wallet. It always works.

• MAN:

  The text from the boss. That would motivate me more.

• WOMAN:

  The bonus.

• MAN:

  Well done more often is definitely more motivational.

• PAUL SOLMAN:

  In the actual experiment, workers who made the quota and received the $30 and those that got a pizza voucher and the group that got a compliment were all more productive than workers who received nothing.

• DAN ARIELY:

  Money was slightly worse than the other two, but they were all much better.

• PAUL SOLMAN:

  But, on the second day, when the workers who'd gotten the $30 were not paid a bonus, regardless of how many chips they turned out, their productivity actually dropped below those who'd gotten zilch.

• DAN ARIELY:

  In total, by giving people $30 bonus, Intel lost almost 5 percent of productivity. That's a lot. Now, think about it. You give money because you think this would increase motivation. It actually decreases motivation.

  The real issue is, how much goodwill do you invest in the work? And goodwill is not something that we can buy with money. It's very hard to buy goodwill with money.

• PAUL SOLMAN:

  Ariely has highlighted another payoff using, of all things, origami.

  It's already a little sloppy.

• DAN ARIELY:

  Indeed.

• PAUL SOLMAN:

  But you have got time constraints, so…

• DAN ARIELY:

  I see. You're doing it for me. You're being sloppy for me. That's so kind of you.

• PAUL SOLMAN:

  I am. I am.

  There's pride in your own hard work, regardless of outcome.

  Anyway, that's good enough.

• DAN ARIELY:

  You put some effort into it. It doesn't look like the one in the book.

• PAUL SOLMAN:

  No.

• DAN ARIELY:

  But it's uniquely yours. And the effort that's gone into folding it and crumpling it is uniquely a combination of this magical moment between you and this piece of paper.

  (LAUGHTER)

• PAUL SOLMAN:

  Right.

• DAN ARIELY:

  Now, in the experiment, we came to people, we said, look, so, this origami actually belongs to us, but, if you're interested, we will sell it to you.

  So, for example, if it was 10 cents, would you buy it or not?

• PAUL SOLMAN:

  Yes. Yes.

• DAN ARIELY:

  Ninety cents?

• PAUL SOLMAN:

  A buck. It's got character. It's got a little runny nose. It's definitely unique, I would say.

  (LAUGHTER)

• PAUL SOLMAN:

  Unique.

• DAN ARIELY:

  There you go.

  And then if I came from the outside and I look at it, I would look at the same unique features in a different way, and I would basically say, I'm willing to pay maybe 10 cents.

  What we found is that people who build it were willing to pay more than five times more than the people who didn't.

• PAUL SOLMAN:

  Ariely has dubbed this attachment to things we have made ourselves the Ikea effect, and he says it can be harnessed by employers.

• DAN ARIELY:

  If you get people to feel that they are putting something, that they are creating it and so on, their love for the project would increase. The more something is yours, the more you're willing to invest in it.

  So, these are Bionicles, little LEGO robots.

• PAUL SOLMAN:

  But it's then more demotivating when others devalue that hard work, as in this experiment in which Ariely paid participants to build these characters.

  And one of these is like a wrap-around thing here. Hold on. Where do these go? Oh, these guys go at the end of this.

  What ages is this for, by the way?

• DAN ARIELY:

  Seven to 14.

• PAUL SOLMAN:

  Seven to 14, so I'm out of the age range, so…

• DAN ARIELY:

  Yes, after 14, it becomes increasingly harder.

  (LAUGHTER)

• DAN ARIELY:

  And let's say you finished, right?

• PAUL SOLMAN:

  OK.

• DAN ARIELY:

  I have it. And as you start building the second one, I break this into pieces.

  I'm just doing it here next to you. And then I say, would you like to build another one, the third one?

• PAUL SOLMAN:

  Right.

• DAN ARIELY:

  And if you say yes, I don't bring a third box in. I give you the one that you just built, and I disassembled.

• PAUL SOLMAN:

  Oh, that's cruel.

  In-your-face Bionicle dismemberment sure demotivated me, and, it turns out, the study's participants.

• DAN ARIELY:

  Very quickly, they said no more, this is not worth my time.

  This is what happens when we destroy people's work in front of their eyes, or when we don't let their work reach any fruition. So, imagine that you're working on some PowerPoint presentation, and I say, we're not going to present it to anybody, or you're working on a project, and I cancel your project. I just basically let you work, but I don't let the product of the work shine.

• PAUL SOLMAN:

  Too often, says Ariely, firms kill motivation by failing to notice what workers really care about. And yet it's so obvious.

• DAN ARIELY:

  The things that motivate us are to help other people, to feel that we're useful, to feel that we're getting better, to feel that we are kind of living to our potential, to get a sense of meaning. All of those things are positive.

• PAUL SOLMAN:

  And, above all, connection to others. Just ask people what most gratifies them, Ariely suggested.

• MAN:

  Watching my wife do things that are completely outrageous.

• MAN:

  Taking care of my family.

• WOMAN:

  My children.

• WOMAN:

  Watching my son dance.

• PAUL SOLMAN:

  And, in my own case, what keeps me doing this job, connecting with folks like Dan Ariely.

  That's cute.

• DAN ARIELY:

  How come the Japanese didn't think about this, right?

  (LAUGHTER)

• PAUL SOLMAN:

  This is economics correspondent Paul Solman, trying to connect with you from New York.

  It's a swan displaying. I have got a whole story in my mind now.

• ALISON STEWART:

  Online, we have more from Dan Ariely. Read an excerpt from his book where he recalls helping a burn victim by sharing his experience.

  That's at PBS.org/NewsHour.