Here’s a riddle for you: How can you attach a candle to a wall using only a box of tacks? This problem was given to two groups of volunteers. The experimental group was told that the person with the fastest time would receive $20 and those in the top 25 percent would receive $5. The control group was told to solve it as quickly as possible.
The correct answer was to attach the box, which contains the tacks, to the wall using the tacks and place the candle inside.
The result was surprising and counterintuitive. The experimental group took almost 50 percent more time to solve the problem than the control group. According to Sam Glucksberg, the psychologist who conducted the experiment and is now a professor at Princeton, the study suggests that the financial incentive model — a model that has been widely accepted almost everywhere including our universities, Wall Street and the workplace — may in fact be counterproductive.
Many other experiments have supported this finding. In another experiment conducted by Beth Hennessey, a professor at Wellesley, a group of children were told that they would be given a monetary reward for telling a story while another group of children were offered nothing. The children who were offered no reward told much more creative stories.
Glucksberg followed up his experiment with another version. This time, he asked the subjects to attach the candle to the wall using a box and tacks — note the subtle change in wording. When given a straightforward problem, those offered the monetary reward were the ones who did better. It seems, then, that monetary incentives work only when the problem is simple and one dimensional. That is, money can make us do a task but not necessarily make us better at doing it.
Why these revolutionary experiments have not made headlines is a mystery and startling, for they have far-reaching implications. What they suggest is that our reward model is unsuitable for certain situations, specifically for those that require creativity and higher thinking, a viewpoint popularized by author Dan Pink in his recently published book, Drive.
In fact, it could be convincingly argued that our Great Recession is the ultimate experiment that proved our reward model is incorrect. When our CEOs and investment bankers were faced with problems that needed a creative solution, they ended up in the same group as the experimental group in Glucksberg’s study. With the prospect of earning absurd bonuses, they gave unsatisfactory solutions that culminated in the current economic crisis.
Unfortunately, no one listens to the data. In fact, some of us are doing the exact opposite of what the data suggests. Harvard economist Roland Fryer takes the aggrandized reward model to the extreme, instituting a monetary reward system at public schools. Currently, he is offering children at underperforming schools in Dallas, Washington D.C., New York and Chicago a monetary incentive for better test scores and grades, improved attendance or fewer classroom outbursts. The preliminary data is flowing in, and according to a recent report released by Fryer’s lab, it does not look promising. When the school children were told that they would be rewarded with money for attending class and having good behavior, class attendance increased significantly, but when they were given a monetary incentive for higher test scores and grades, the impact, according to the report, was “statistically zero and substantially small.”
These results should not be surprising. When the children were offered a task that was straightforward and could be completed with little mental grind — attending school and behaving well — the monetary incentive worked. But when faced with a problem that required intrinsic motivation to summon the necessary creativity to solve — such as understanding a math problem or a reading passage in a test — the monetary reward had no impact. No matter how much money you throw at a student — or employee, doctor or Wall Street banker for that matter — you will not make him improve.
We have witnessed an array of experiments, from those conducted by Glucksberg to the unintentional one on Wall Street, all producing strong evidence that indicate financial incentives do not work in situations requiring higher thinking.
It is disturbing to see this model gain so much momentum and blind faith when, in truth, it may be more harmful than beneficial.
The University should take note of the data as it continues to search for a replacement CIO, and should consider adopting a more progressive, logical salary policy. We won’t be able to afford anything else.
Steven Zhang is a junior in the College of Arts and Sciences. He may be reached at firstname.lastname@example.org. The Bigger Picture appears alternate Tuesdays this semester.