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View Full Version : Is money really what motivates businesses towards progress?




ronaldo23
12-24-2012, 06:03 PM
saw an interesting TedTV video by daniel pink.


http://www.youtube.com/watch?v=rrkrvAUbU9Y

In a nutshell, he argues that money isn't the greatest incentive to motivate businesses and to create innovation. He says for 21st century tasks (where you aren't moving towards only one specific goal), the whole reward/punishment approach of money incentives simply doesn't work, and in fact for tasks that require higher cognitive function, money incentives are not useful after a certain point. Rather, he argues that intrinsic motivations are what drives us forward. The three important factors are

1. autonomy, the urge to direct our own lives. While is crucial to pay people adequately and fairly, at some point there is a cutoff where increasing monetary incentives has diminishing to no value in productivity, and where autonomy, mastery and purpose are more important than money. An example would be google, where they tell employees to use 20% of their work time on their own to work on whatever project or task they feel like. Each year, half of the products released from google are from this down time where people have the freedom and creativity to pursue what they want (gmail, google news, and the staples of google came from this.) He also compares Microsoft Encyclopedia to Wikipedia- the former used all the traditional incentives- paid professionals to write/edit articles, well compensated managers. WIKI comes along where people write articles for fun, and do it because they like to do it and see purpose. Wouldn't we think Microsoft Encylopedia would have smoked Wikipedia if motivation was just about money?

2. mastery, the desire to get better and better at something that matters. "If then rewards" that focus solely on money stifle creativitiy.

3. purpose, the human desire to be a part of something greater than oneself, to have meaning in one's work.


what do you guys think of this argument? watch the video, it probably explains better than my cliff notes lol
on a side note, I believe Daniel Pink is a libertarian- at least he is a contributor to reason magazine.

KCIndy
12-24-2012, 06:12 PM
Personally, I have yet to give up a high paying job in favor of a job offering a lot less money and a lot more challenge.

But that's just me. :)

MoneyWhereMyMouthIs2
12-24-2012, 06:20 PM
He is right to some extent, and this would be no news to any economist.

VIDEODROME
12-24-2012, 07:16 PM
Doesn't involvement with the Stock Market steer companies toward appeasing share holders by striving for profit? Sometimes at the expense of sensible long term planning?

MoneyWhereMyMouthIs2
12-24-2012, 07:22 PM
Doesn't involvement with the Stock Market steer companies toward appeasing share holders by striving for profit? Sometimes at the expense of sensible long term planning?


Most of that is useless paper either way. If they were really share holders, they'd have profit motivations as well as other motivations.

Some people's idea of "sensible long term planning" is to just sell a bunch of paper.

Zippyjuan
12-24-2012, 07:43 PM
Those can be reasons for starting the business but it won't be able to be sustained as a business unless there are profits in it. Otherwise it is just a hobby.

Tpoints
12-24-2012, 07:50 PM
Personally, I have yet to give up a high paying job in favor of a job offering a lot less money and a lot more challenge.

But that's just me. :)

I think what he means is, once you have the money you need, taking risks and challenges is the added fun when earning money isn't a concern. Like that's news to anybody.

VIDEODROME
12-24-2012, 08:23 PM
Most of that is useless paper either way. If they were really share holders, they'd have profit motivations as well as other motivations.

Some people's idea of "sensible long term planning" is to just sell a bunch of paper.

Well suppose we include Mutual Funds and such? Then the share holder is only vaguely interested as long as their portfolio is doing well?


On the other hand, I hear advice that you should only invest in what you know. I mean if you really understand an industry you might be interested in seeing it thrive as well as be profitable rather than squeeze it dry with only a thought for maximum short term profit.

I mean hell investing in something you understand would be more fun anyway.

awake
12-24-2012, 08:34 PM
Money is simply a medium of exchange. The exchange, and what it represents, is the desire of one human being fulfilled by another. Each of us who produce is sacrificing their work and life to the needs and satisfactions of others. In turn we get the pleasure and happiness that we give in kind. "Do onto others...". We all work for the happiness and life of others...then there are the parasites...

MoneyWhereMyMouthIs2
12-24-2012, 08:56 PM
Well suppose we include Mutual Funds and such? Then the share holder is only vaguely interested as long as their portfolio is doing well?


Sure. They want someone else to handle their stuff for a % of share. Nothing wrong with that.

But at the root, if you have a piece of paper that gives you no right to direct a company, liquidate it, or a specific % of profits... the long term value of that paper will most likely be the paper. Do it with math, even. It's a musical chair circle jerk in a lot of cases where you have to hope someone wants the paper more than you do later. Of course, the companies and funds have an interest in keeping their paper prices high. But at the end of the day, a lot of people hold rather worthless stock certificates.

tttppp
12-24-2012, 10:57 PM
saw an interesting TedTV video by daniel pink.


http://www.youtube.com/watch?v=rrkrvAUbU9Y

In a nutshell, he argues that money isn't the greatest incentive to motivate businesses and to create innovation. He says for 21st century tasks (where you aren't moving towards only one specific goal), the whole reward/punishment approach of money incentives simply doesn't work, and in fact for tasks that require higher cognitive function, money incentives are not useful after a certain point. Rather, he argues that intrinsic motivations are what drives us forward. The three important factors are

1. autonomy, the urge to direct our own lives. While is crucial to pay people adequately and fairly, at some point there is a cutoff where increasing monetary incentives has diminishing to no value in productivity, and where autonomy, mastery and purpose are more important than money. An example would be google, where they tell employees to use 20% of their work time on their own to work on whatever project or task they feel like. Each year, half of the products released from google are from this down time where people have the freedom and creativity to pursue what they want (gmail, google news, and the staples of google came from this.) He also compares Microsoft Encyclopedia to Wikipedia- the former used all the traditional incentives- paid professionals to write/edit articles, well compensated managers. WIKI comes along where people write articles for fun, and do it because they like to do it and see purpose. Wouldn't we think Microsoft Encylopedia would have smoked Wikipedia if motivation was just about money?

2. mastery, the desire to get better and better at something that matters. "If then rewards" that focus solely on money stifle creativitiy.

3. purpose, the human desire to be a part of something greater than oneself, to have meaning in one's work.


what do you guys think of this argument? watch the video, it probably explains better than my cliff notes lol
on a side note, I believe Daniel Pink is a libertarian- at least he is a contributor to reason magazine.

Thats really old news. Basically what I think he is saying is once you can buy what you need and want, money is less important. Which is true. However our financial system forces companies theoretically to innovate or else they go out of business. So without the money motivators, none of the other motivators would count.

tttppp
12-24-2012, 11:00 PM
Doesn't involvement with the Stock Market steer companies toward appeasing share holders by striving for profit? Sometimes at the expense of sensible long term planning?

It can if all they look at is net income. If you have intelligent people on tne board, thats not a problem.

Czolgosz
12-24-2012, 11:22 PM
I wish more American companies, at least to those I've been exposed, thought more rationally rather than within the limited band we normally see.

liberty2897
12-25-2012, 12:25 AM
I definitely agree with his statements regarding autonomy and schedule. I've had jobs with no fixed schedule in the past few years. I can definitely say that I feel much happier and more productive when my work is not tied to a clock or location. I would be willing to take a huge cut in pay if my current employer was like this.

Zippyjuan
12-25-2012, 01:21 AM
I definitely agree with his statements regarding autonomy and schedule. I've had jobs with no fixed schedule in the past few years. I can definitely say that I feel much happier and more productive when my work is not tied to a clock or location. I would be willing to take a huge cut in pay if my current employer was like this.

Depends on your personality. Some people like the security of things staying the same and knowing what will happen. They are content to work just a few jobs until they retire (in the olden days they were known as the "40-40's"- working 40 hours a week at the same job for 40 years and retiring with a full pension. Pensions are fading away now. Others get bored easily and seek out new challenges.

Neil Desmond
11-05-2013, 06:17 AM
Here's a version with that popular animation style of presentation:



http://www.youtube.com/watch?v=u6XAPnuFjJc