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Why People Aren't Mainly Motivated by Money (Dec. 30, 2011)

By Dennis Loo

I just found this delightful video today (it has over 7.3 million hits) that shows in about 10 minutes why the central tenet of neoliberal thought is dead wrong. It originally appeared on Business Insider.

It’s entitled: RSA Animate – Drive: The surprising truth about what motivates us.

It shows how very conventionally-minded economists at the University of Chicago, Carnegie-Mellon and MIT found out in studies they designed and ran (and paid for by the Federal Reserve Bank) that the accepted wisdom that giving people more money to get them to work harder and better only works for the most mechanical of tasks and has a reverse effect on any task that requires even the most rudimentary kind of thinking.

What people are motivated by in life, in other words, isn't mainly material incentives but engagement, autonomy, purpose and contributing to something larger than themselves. When subjects in a poor rural area of India (Maduri) were given two months more salary as a bonus for harder work they did WORSE than those who were given less bonus cash. This replicated what they found when they carried out this experiment on MIT students.


0 # Jessica Rodriguez 2014-06-09 02:32
i would assume that if your getting paid less and then given more money that they would work hard since they are getting something for there hard work. and those who get paid great, depending on the job would care as much since they have good money. yet even though they arent motivated by money, people would almost do anything for it
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0 # FAVELA001 2014-06-12 04:17
Why is it that when it came to mechanical skill then those performed above average to receive their reward? However when it came cognitive skill larger reward lead to poorer performance? This is a concept that doesn't make sense to me.
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0 # FAVELA001 2014-06-12 04:28
There was a very valid point that this video brought up that can be seen heavily in corporate America, especially when it comes to creative thinking. Money is a motivator, if you don't pay people enough they wont be motivated, but if you pay people enough they will forget about money and focus on the work. It talked about autonomy, the direction of one's own life. Mastery, and Purpose. One company that fails to mention is Pixar. Pixar ultimately was a company that did not focus on profit but rather focused on technological innovation and storytelling. When Steve Jobs invested within this company and took the worry of financing this project off the table it led to twofold results. The first being a technological breakthrough in the motion picture world, and the creation of a multi-million dollar company where money was no longer an issue.
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