These slides were prepared by Swati Chaturvedi under the supervision of Prof. Sameer Mathur.

2. • Born: 1964
• Education: Northwestern
University, Yale University, Yale
Law School, Bexley High School
• Movies: A Whole New Mind
• Nominations: Goodreads
Choice Awards Best Nonfiction
• Daniel H. Pink is the author of
five books about business,
work, and management that
have sold two million copies
worldwide and have been
translated into 34 languages
About Dan Pink

3. Attach the candle to the
wall so the wax doesn't
drip onto the table
Created by a psychologist named Karl Duncker in 1945

4. SOLUTION #1
Trying to thumbtack the
candle to the wall
Doesn’t work!

5. SOLUTION #2
Light the match, melt the
side of the candle, try to
adhere it to the wall
Doesn’t work!

6. SOLUTION #3
WORKS 

7. SOLUTION #3
–Overcome what's called
functional fixedness
–Box was seen as a receptacle for
the tacks
–Can be a platform for the candle

8. EXPERIMENT: Power of Incentives
2 groups are given the Candle
Problem
Objective for Group #1 –
– To establish norms, averages for
how long it typically takes
someone to solve this sort of
problem
Objective for Group #2-
– If you're in the top 25% of the
fastest times, you get five
dollars.
– If you're the fastest of everyone,
you get 20 dollars

9. RESULT?
Group #2 took 3.5 min longer than
Group #1
Doesn’t make sense!
Why didn’t Incentives WORK?!

10. CONTRADICTORY TO OUR BELIEFS?
If you want people to perform better, you
reward them. Right? Bonuses, commissions,
their own reality show. Incentivize them. That's
how business works.
Then why didn’t Incentives WORK?!

11. BUT THAT DIDN’T HAPPEN HERE
You've got an incentive designed to
sharpen thinking and accelerate
creativity, and it does just the
opposite!
It dulls thinking and blocks creativity

12. This Experiment has been
replicated over and over again
for nearly 40 years…

13. MISMATCH BETWEEN
SCIENCE AND BUSINESS
Alarming that How we motivate in
regular business, is built entirely
around these extrinsic motivators

14. GLUCKSBER’S EXPERIMENT
2 groups are given the Candle
Problem
Objective for Group #1 –
– To establish norms, averages for
how long it typically takes someone
to solve this sort of problem
Objective for Group #2-
– If you're in the top 25% of the
fastest times, you get five dollars.
– If you're the fastest of everyone,
you get 20 dollars
Attach the candle
to the wall so the
wax doesn't drip
onto the table

15. RESULT?
Incentivized group kicked the other group's butt!!

16. WHEN DO REWARDS WORK?
• TASK: Simple set of rules and a clear
destination to go to
• Rewards, by their very nature, narrow our
focus, concentrate the mind

17. WHEN DON’T REWARDS WORK?
• For the Real Candle Problem,
• Solution is on the periphery
• You want to be looking around
Rewards actually narrows our focus and restricts
our possibility

18. Everybody deals with their own version
of the Candle Problem

19. SUMMARIZED SOLUTION
• For tasks that require Mechanical skill, Bonuses
worked as they would be expected
– The higher the pay, the better the performance
• But once the task called for even Rudimentary
Cognitive Skill,
– a larger reward leads to poorer performance.

21. BUILDING BLOCKS FOR NEW BUSINESS
THREE KEY ELEMENTS
• Autonomy: the urge to direct our own lives
• Mastery: the desire to get better and better at
something that matters
• Purpose: the yearning to do what we do in the
service of something larger than ourselves

22. Research at MIT, Carnegie Mellon, University of Chicago,
London School of Economics
RESEARCH RESULTS
Financial incentives
can result in a
NEGATIVE IMPACT
On
Overall Performance

23. REAL LIFE EXAMPLES?

24. Australian software company
–“Go for the next 24 hours and
work on anything you want, as
long as it's not part of your regular
job. Work on anything you want.”

25. • 20% of their time working on
anything they want.
• Autonomy over their time,
their task, their team, their
technique
• Radical amounts of autonomy

26. • No schedules
• No fixed time to come or go
• Just get the work done
• How? When? Where? – Upto the
employee
• Meetings are optional
RESULTS ONLY WORK ENVIRONMENT

27. RESULT?
• Productivity goes UP
• Worker engagement goes UP
• Worker satisfaction goes UP
• Turnover goes DOWN

28. Wikipedia
• Do it for fun
• No one gets paid a cent,
or a euro or a yen
• Do it because you like to
do it
Microsoft
• Deployed all the right incentive
• Paid professionals to write and edit
thousands of articles
• Well-compensated
• On budget & on time
CASE STUDY
WE ALL KNOW WHAT WORKED!!

29. SUMMARY
• How do we effectively motivate people?
• Do incentives always work?
• No, only for task that require Purely Mechanical Skills
• But NOT ALL tasks are purely mechanical
• Now what?
• Study and Research show that we need to go beyond
Extrinsic Rewards
• 3 Key Elements for Motivation – AUTONOMY, MASTERY,
PURPOSE
• Incorporating these three elements in tasks yields BEST
RESULTS!

30. Sameer Mathur
Marketing Professor 2009 – 2013
Ph.D. and M.S. (Marketing) 2003 – 2009
Marketing Professor 2013 –
Indian Institute of Management,
Lucknow
Swati Chaturvedi
Indian Institute of Management,
Lucknow
MBA Student