The Mismatch between what science knows and what business does

By: Gerrit Betz

The news is in, and the way we have been incentivizing work for decades has been proven to be harmful to productivity. Carrots and Sticks are on the way out. Worker autonomy is on the way in.

That is the gist of a recent talk by Dan Pink, a former speechwriter to Al Gore, a published author, and a contributing editor to WIRED magazine.

Dan makes a compelling case for reevaluating how we structure incentives for employees and even ourselves. He describes a social science experiment called the "Candle Problem," designed in 1945, where participants are asked to accomplish a simple task. The task has a very simple solution that requires some creativity to discover. So when a modern experimenter revived the experiment and timed two groups to see which could solve it faster, the results were surprising.

When participants are told that fastest participants received a cash reward, they do significantly worse. It takes them, on average, three minutes longer to reach the solution than people who were simply told the average time it should take to find the solution.

Dan explains that traditional rewards work well when there is a "simple set of rules and a clear destination" because "rewards . . . narrow our focus, concentrate the mind. Where you just see the goal right there, zoom ahead straight to it, they work well . . . . But for the real candle problem . . . the solution is on the periphery." In fact, as the cash prize increases, people do even worse.

The implications for modern work of all kinds are staggering. We've seen straight-forward jobs like manufacturing either go overseas or become automated by machines and computers. We're left with nothing but "Candle Problems" with no clear rules and many possible solutions.

The presentation really hits home for me, because my candle problem is often legal research, or crafting arguments, and trust me-rushing in head-first on either of those is a great way to spend a long time going nowhere.

You'll have to watch the rest of the clip (runtime 18:40) for the juicy details and snappy jokes, but in the end Dan suggests that intrinsic, internal rewards (like granting employees greater autonomy) are more effective than extrinsic, carrot-and-stick incentives.

What are your "Candle Problems?" How are you going to approach them from now on?

Gerrit is a legal intern with Exemplar Law Partners, LLC.