So, economics and statistics are the flavour of the month, or more specifically “Freakonomics” (Steven D. Levitt and Stephen J. Dubner, Penquin Books 2006). In a quote from Levitt’s website, “Through forceful storytelling and wry insight, Levitt and co-author Stephen J. Dubner show that economics is, at root, the study of incentives - how people get what they want, or need, especially when other people want or need the same thing.” And Levitt & Dubner do have many interesting, amusing and sometimes disturbing (at least to me) stories to tell.

For example, take the case of the child care centre that was having difficulty with a few parents picking up their children late. It was decided to institute a late pick up fee of $3. As you might have guessed, this did not stop the late parents and in fact their numbers increased from about 8 to 20! By introducing the fee, late pick ups had just been legitimised and ameliorated the parents feeling of guilt.

Levitt and Dubner suggest that incentives, to be effective, need to have three components – economic, social and moral. In the child care case, would increasing the late fee to $100, posting the names of the late parents on a public list and running discussion groups on the implications of late pick ups for children and parents, have changed the parent’s behaviour? The answer is unequivocally, “Yes”.

Another example given is cigarettes. Levitt and Dubner suggest that in the US, the tax of around $3 or so on cigarettes (economic), no smoking laws in restaurants (social) and publicising the profits being made by terrorist groups through black market cigarette sales (moral) have successfully combined all three incentive ingredients to stop people smoking. And they are right.

But (and in this case it’s a big “but”) do incentives work? Do they motivate people? On the cover of their book they suggest “Assume nothing – question everything”, and I’m taking them up on this challenge. I agree that incentives work – they can change people’s behaviour. However, what do you get when you introduce incentives (even those that include the three components)? Incentives produce compliance, they do not produce commitment. The second thing that happens once incentives are introduced, is that they need to be repeated! And repeated, and repeated! Once started they cannot be stopped – a right given is a right expected.

As an employer, manager, parent or teacher (or child care centre manager), do you want compliant people or committed people? Wouldn’t it be so much easier to be an employer, manager, teacher or parent if incentives really worked in the way that they are intended? Unfortunately, because the incentive has only changed behaviour and not motivation, when we take away the incentive, it is most likely that people will revert to their old behaviour. Whereas with committed people, even when conditions change, they are far more likely to remain motivated. (Mind you assume nothing – question everything, always be wary of equating correlation with causation. They are often not the same thing.)

Page 1 of 2 :: First | Last :: Prev | 1 2 | Next