Chiswick Consulting Work today is organised upon principles outlined by Adam Smith 150 years ago and that’s not serving us well.
As a reminder, Smith believed that people are inherently lazy and won’t do anything unless motivated or bribed, preferably with a salary. As individuals don’t enjoy working, the best thing we can do for them is to make work as efficient as possible. Efficiency means we can continue to afford to pay people and we get to spend as few hours as possible doing something we don’t really like to do.
Working from this premise has distorted the world of work. All our efforts, resources and imagination go into making work more structured and efficient with little or no emphasis on building up those characteristics which make organisations more fulfilling, interesting and creative. Ignoring the humane characteristics leads to poor engagement and suboptimum performance. Jeffrey Pfeffer, author of “The Human Equation – Building Profits by Putting People First”, found that across all industries organisations with the most humane work practices were always the most profitable.
Focusing on salaries is also problematic. Barry Schwartz, Professor of Psychology at Swarthmore College, Pennsylvania and author of more than 10 books and 100 articles, believes financial incentives are profoundly disrespectful. They assume that employees need to be bribed to do a good job. Moreover using financial ‘bribes’ to motivate individuals can produce the opposite result as sometimes the second motive, getting paid, weakens the first. For instance, when kids are awarded a prize for great drawing their interest in drawing often drops off – drawing becomes a chore. When a fine is introduced to incentivise parents to pick up their kids from nursery promptly, the result is a greater incidence of lateness. The fine gives a let out clause and diminishes the sense of responsibility parents have towards their child’s nursery teacher.
Our overreliance on the economic view of the world means we ignore the individuality of people. Not everyone is motivated by the same things. Google, where everyone makes plenty of money, need to make more effort in individualising rewards. Extra time off or an opportunity to spend more time with friends and colleagues, might be a better reward for an individual who earns ‘too much’. Google knows that if you are going to attract the best person, a great salary is the starting point. Retaining them requires a far more nuanced approach.
In order for organisations to become more humane we need to create opportunities to experience:
- Discretion and autonomy
- Variety
- Respect from supervisors and peers
- Opportunity to learn on the job and do interesting work
- Potential to find meaning (defined here as making someone else’s life better)
And whilst the opportunity to create meaningful work lies within every organisation, organisations must create space for individuals to choose the more meaningful action. For instance, anybody who works in retail has the possibility of thinking about what they do every time they have an interaction with a customer. Their task could be –”how do I make a sale?” or it could be “how do I meet their needs?”. The latter means that every interaction is a potential partnership between the salesperson and the customer to figure out what their needs are and how to meet them. Taking this approach could help 100 people every day. But the organisation needs to give permission to employees to take the meaningful action for them regardless of the risk of a lost sale.