Rewarding sales teams with money has long been a motivational tactic used by employers. Whether it’s high salaries, large commissions, incredible bonuses, or other financial rewards, the prospect of riches has long been thought to incentivize sales teams to bring in bigger deals more frequently.
Yet in recent years, this school of thought has been called into question. In a Ted Conference talk, later animated by RSA Animate in the video below (which we originally covered here), Daniel Pink, author of To Sell is Human: The Surprising Truth About Moving Others, discussed what research and experience tell us truly motivates people personally and professionally.
Pink discusses a study conducted by researchers at MIT in which they looked at the correlation between financial reward and performance of cognitive functions. The results repeatedly showed that when large financial rewards are at stake, performance on complex tasks is consistently poor.
Instead, Pink points to three keys which will help you get the most out of your workforce:
This is the desire to be self-directed and direct our own lives. In many ways, Pink says, traditional management runs afoul of this. Traditional management is great if you want compliance, but if you want engagement, self direction is better. One example is the company Atlassian, which each quarter gives developers 24 hours to work on anything they want without any supervision. That one day has led to a whole array of fixes to existing software and new products that would not have otherwise emerged.
Mastery is the urge to get better at stuff. This is why, Pink says, people play musical instruments on the weekend. It’s irrational; it’s not going to make them any money, so why are they doing it? Pink says that it’s fun, and that you get better at it, which is satisfying. He also gave an example of people doing highly skilled work around the world, volunteering their time to a cause that would give away a product rather than selling it. It may have seemed crazy 30 years ago, but examples like Linux and Wikipedia fly in the face of conventional wisdom run by people who have other jobs. Challenge and mastery, along with making a contribution are powerful motivators.
This all leads to what Pink calls the “purpose motive.” Organizations want to have a transcendent purpose. This is partly because it makes coming to work better, and party because it attracts better talent. When the profit motive gets unmoored from the purpose motive, Pink says, bad things happen. You might get ethical problems, bad products, lame service, and poor work environments. Companies and organizations that are flourishing are animated by these purposes, such as Skype (being disruptive but in the cause of making the world a better place) and Apple (want to put a ding in the universe).