Image by jollyUK via Flickr
Once again, the James Randi Educational Foundation has picked the yearly recipients for their anti-rewards. That made me think about how much nonsense and known errors we face in our lives. JREF focuses on some prominent examples, but there are many more that are more widespread and provide less of a focus for attack.
What frightens me is how much politics, businesses and society are run according to rules that are either entirely unsubstantiated or known to be false. So in a way, this is the continuation of my earlier article No-Brains Politics.
Allow me to illustrate with an example. Does your company have an incentive system? It probably has, for many years now, incentive systems have been traded as solutions to most people problems companies face.
Now here’s the ugly fact: They don’t work. And by that I not only mean that they don’t work at all, but that in many cases they are actually counter-productive. And what’s more, to quote one of the actual (i.e. not-a-consultant) experts in the field:
At least 70 studies have found that rewards tend to undermine interest in the task (or behavior) itself; this is one of the most thoroughly replicated findings in the field of social psychology.[1]
If you don’t trust one source (rightfully so), you can find similar quotes all over, from reputed institutions like the London School of Economics to a study done for the Federal Reserve Bank of Boston, which is especially clear that for
A task that requires rudimentary cognitive skill a larger incentive led to poorer performance.
Yes, you read that right, not only do incentives per so not work, the larger they are, the more detrimental their effect. Or to put it really bluntly: Incentives do the opposite of what those consultants told you.
There’s even a fantastic TED talk about the subject:
So how is it possible that we still have those systems everywhere? This can not possibly have stayed unnoticed in the business world, can it?
A good approach usually is: When in doubt, follow the money. And indeed, that turns out to be true. When you make the proposal to do away with the incentive system, you quickly find out it’s not about the incentive at all, it’s about the money. Nobody wants to lose that extra on their paycheck, especially not the big guys who would have to make the decision on killing it.
And so we go on with, as the book title puts it perfectly well, Sex, Stupidity and Greed.
- [1] http://www.alfiekohn.org/managing/cbdmamam.htm ↩
