Sales people are sooooo competitive! They love winning an beating each other!
Have you ever asked yourself if this is true? In fact, evidence from the field and from science shows that competition and commissions wreak havoc with your business goals. Long term damage, high burnout, annoyed customers, bad relationships between employees, gaming the system, name calling, and colleagues not helping each other are effects of competition in a sales environment, where collaboration should be a top priority.
This presentation, as shown at the Sales 2.0 Conference in San Francisco in 2014, questions the conventional wisdom of sales contests, sales commissions, and points to Gamification as a way to use better suited techniques to create a high performance sales team.
The “Course Topics” series from Manage Train Learn and Slide Topics is a collection of over 4000 slides that will help you master a wide range of management and personal development skills. The 202 PowerPoints in this series offer you a complete and in-depth study of each topic. This presentation is on "Power and Negotiations".
Presentation on mediating bullying and harassment - the challenge of power, by John Crawley & Nigel Singer of Conflict Management Plus, at CMP's 'Aiming for excellence' conference, 5 December 2008, London.
The “Course Topics” series from Manage Train Learn and Slide Topics is a collection of over 4000 slides that will help you master a wide range of management and personal development skills. The 202 PowerPoints in this series offer you a complete and in-depth study of each topic. This presentation is on "Power and Negotiations".
Presentation on mediating bullying and harassment - the challenge of power, by John Crawley & Nigel Singer of Conflict Management Plus, at CMP's 'Aiming for excellence' conference, 5 December 2008, London.
#BR4041UL is a Broadening programme looking at Social Media for the Social Good. This is a background lecture on gamification, from definitions to criticisms to design considerations.
The MTL Professional Development Programme is a collection of 202 PowerPoint presentations that will provide you with step-by-step summaries of a key management or personal development skill. This presentation is on "Unshared Certainty to Shared Uncertainty" and will show you how successful teams develop with visionary leaders.
We are trained to look for social acceptance and follow conformity. Our everyday actions are determined by our need to be socially accepted. Right or wrong doesn’t matter. Where should we throw the trash, how should I drive in the rains, how to board an airplane, eating popcorns during cinema- many such things are determined not by our independent preference, but by our need to conform.
The MTL Professional Development Programme is a collection of 202 PowerPoint presentations that will provide you with step-by-step summaries of a key management or personal development skill. This presentation is on "What Is Assertiveness?" and will show you why assertiveness is both a simple concept and a much deeper one.
The gaming industry is huge, and it can keep its audience consumed for hours, days and even weeks. Presentation shows how it all started, some best and worst practices and main principles of gamification.
How to give your sales meetings an extreme makeoverJohn Mayfield
John Mayfield, Professional full-time speaker presents his popular "How to Give Your Sales Meetings an Extreme Makeover at the Century 21 National Convention. Do you know what your sales agents really expect and want from your weekly sales meetings? During this session, John Mayfield will give you the tips, tools and strategies to increase your attendance and make an impact each and every week with your team members. You will also discover a wide variety of ways to get new ideas and suggestions for your sales meetings, and how to effectively hit a home run each and every week with your group. By the conclusion of this session, you will know exactly what your sales agents want and expect from you each and every time you offer a sales meeting.
#BR4041UL is a Broadening programme looking at Social Media for the Social Good. This is a background lecture on gamification, from definitions to criticisms to design considerations.
The MTL Professional Development Programme is a collection of 202 PowerPoint presentations that will provide you with step-by-step summaries of a key management or personal development skill. This presentation is on "Unshared Certainty to Shared Uncertainty" and will show you how successful teams develop with visionary leaders.
We are trained to look for social acceptance and follow conformity. Our everyday actions are determined by our need to be socially accepted. Right or wrong doesn’t matter. Where should we throw the trash, how should I drive in the rains, how to board an airplane, eating popcorns during cinema- many such things are determined not by our independent preference, but by our need to conform.
The MTL Professional Development Programme is a collection of 202 PowerPoint presentations that will provide you with step-by-step summaries of a key management or personal development skill. This presentation is on "What Is Assertiveness?" and will show you why assertiveness is both a simple concept and a much deeper one.
The gaming industry is huge, and it can keep its audience consumed for hours, days and even weeks. Presentation shows how it all started, some best and worst practices and main principles of gamification.
How to give your sales meetings an extreme makeoverJohn Mayfield
John Mayfield, Professional full-time speaker presents his popular "How to Give Your Sales Meetings an Extreme Makeover at the Century 21 National Convention. Do you know what your sales agents really expect and want from your weekly sales meetings? During this session, John Mayfield will give you the tips, tools and strategies to increase your attendance and make an impact each and every week with your team members. You will also discover a wide variety of ways to get new ideas and suggestions for your sales meetings, and how to effectively hit a home run each and every week with your group. By the conclusion of this session, you will know exactly what your sales agents want and expect from you each and every time you offer a sales meeting.
Definition of sales promotion
SALES PROMOTION:
Consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade.
*FACTORS CONTRIBUTE TO THE RAPID GROWTH OF SALES PROMOTION
*PURPOSE OF SALES PROMOTION
*MAJOR DECISION IN
SALES PROMOTION
*SELECTING CONSUMER-PROMOTION TOOLS
*SELECTING TRADE-PROMOTION TOOLS
*SELECTING BUSINESS &
SALES FORCE PROMOTION
TOOLS:
Looking to pump some excitement into your sales team,? Sales incentives, sales contests, increase sales, increase revenue, to your company. Your sales team will love these promotion ideas to help get them excited about winning new accounts.
5 Steps for Empowering Your Diverse Leadership - UpdatedKaruana Gatimu
Updated presentation on empowering your own diverse leadership skills. From SharePoint Conference North America, Las Vegas May 2018 Diversity & Inclusion track.
MGT 4600 FINAL EXAM1. Answer all questions. The entire final .docxARIV4
MGT 4600: FINAL EXAM
1. Answer all questions. The entire final should be 1500 words minimum.
1. Define the following terms in a sentence each:
· Leveraged Buyout
· Downscoping
· Functional Structure
· Related Diversification
2. We have discussed the 2008 hostile takeover battle between Microsoft and Yahoo (read about it anywhere you like, for example at http://massivegreatness.com/turning-purple-into-red). Name two ways in which Microsoft hoped to benefit from the acquisition. Can Yahoo’s perpetual raising of the price be considered a “poison pill”?
3. The following article on executive compensation suggests that some executives are earning nearly $40,000 an hour (http://www.nytimes.com/2014/04/13/business/executive-pay-invasion-of-the-supersalaries.html)! The following figure shows that much of the compensation comes from stock options, which is considered a good instrument of "corporate governance" (http://www.nytimes.com/interactive/2013/04/05/business/the-highest-paid-ceos.html; also see our ppt in the course documents section). The data is a few years old, but the trend toward overpayment of CEOs has remained stable, and even intensified as we move into 2017. Do you think such compensation is fair? Should we move away from a stock option model to a straight salary model for CEOs and top managers? Discuss the pros and cons of both.
4. Do takeovers work? Read the following article in the context of the controversy that surrounded HP’s 2012 acquisition of Autonomy. Based on your experiences and other readings why do you think HP paid so much for Autonomy? Was it a doomed strategy, or was it a good idea that did not pan out? http://www.forbes.com/sites/robertsher/2012/11/28/the-lesson-of-h-p-for-mid-market-companies-with-acquisitions-really-do-your-homework/?ss=strategies-solutions
5. Read this article about activist shareholders pressurizing Yahoo: http://www.forbes.com/sites/adamhartung/2016/03/30/yahoo-case-study-in-why-activist-investors-exist-and-succeed/#30bee16728a6. Our discussion on corporate governance identified four mechanisms of corporate governance (ownership concentration, board of directors, executive compensation and the market for corporate control). Which two mechanisms are most apparent in this article? Elaborate.
Chapter Five
How to Lead Virtual Teams — Tips,
Techniques, and Best Practices
for High Performance
‘‘Out of sight, foremost in mind. How do you
manage people whom you don’t see regularly?’’
— Charles Handy1
We’ve already established that quality leadership is essential for a
virtual team’s success. And that it’s not an easy job. Virtual team
leaders face challenges similar to those of leaders of co-located
teams. However, for the former, many of those challenges are
exacerbated by distance and time zone differences.
As Jay Moldenhauer-Salazar, vice president of talent man-
agement at Gap, Inc., suggests, ‘‘The things that are good for
virtual teams are the same as with traditional tea ...
Gamification is transforming the way businesses engage customers and motivate employees. By applying the same principles that inspire people to play games (achievements, status, and rewards) to websites and other online experiences, businesses can dramatically increase the size of their audience, boost engagement, and increase revenue.
This month, Kasey McCurdy, Director of Engineering at Bunchball, will discuss how game mechanics can engage your fans and users, increase customer loyalty and sales, and motivate employees and partners.
Bunchball is the industry leader in gamification and has provided solutions for customers like Warner Bros., Comcast, NBC Universal, ABC Television, Stella & Dot and LiveOps.
Kasey will cover the history of gamification, why it works and sometimes doesn’t, and how the combination of data, motivation, and gamification can strengthen loyalty. He’ll also discuss customer and employee engagement, how to motivate the unmotivated, and what the future of human motivation looks like.
Gamification Design for Training and Talent DevelopmentMonica Cornetti
Monica Cornetti
Founder and CEO of Sententia Gamification
www.SententiaGames.com
An introduction to the Sententia Level 1 Gamification Apprentice Certification program for Training and Talent Development.
The ONLY Gamification Certification that earns you recertification* credits with HRCI, SHRM, and ATD.
This certification program takes you through the proven 5-step process of gamifiying a corporate training or adult learning program. By following the 5-step plan, you are essentially assured a successful outcome.
Learn more at: www.SententiaGames.com/certifications.html
Innovation Differences - Silicon Valley Versus EuropeMario Herger
While Silicon Valley creates new billion dollar companies every year, Europe lags behind. What are the approaches on innovation, creativity, and new ideas in Europe and Silicon Valley that lead to these drastic differences?
This slide deck examines 17 differences compiled from countless discussions with startup founders, investors, corporate people, and my experience of living in both Europe and Silicon Valley for many years.
Contact me on: http://www.enterprisegarage.io/
Encouraging employees to innovate can be achieved with innovation management systems and communities that use gamification. This slide deck explores a number of gamification examples that can be used in the enterprise.
Ever wondered how to create a viral blog or deck for any topic? Look no more. Here are a few steps of how to shamelessly use Steve Jobs to promote your cause.
Gamification in Banking & Financials ExamplesMario Herger
Many banks and financials institutions have been gamification in the past years. This slide deck compiles a number of examples from different organizations. Through many example screenshots a great overview is given of how engaging banking and finance can be made for employees and customers.
These and many more examples can be found in the book "Gamification in Banking & Financials" by Mario Herger, available on Amazon.
To contact Mario, visit http://www.enterprise-gamification.com/
Enterprise Gamification And The Blue Collar WorkerMario Herger
Gamification in the corporate world so far has looked mainly at employees - or specifically white collar workers - who use computers and digital devices to interact with business systems. Blue collar workers, like those who are at an assembly line in the automotive industry, seamstresses, room maids in the service industry, or garbage collectors, present a different challenge for gamification designers. They may not use digital tools such as computers for their work on a regular base, and they often perform monotonous and mind-numbing tasks that cannot be changed or varied much. To understand them and their motivations, as well as their specific needs, we need to look at how blue collar workers see themselves, what their values are, and how they deal with monotony.
Blue-collar workers, while they operate the machines know that they do not have control over production tools and facilities. The owners decide what is produced, by whom, and where. What sounds like coming from Karl Marx directly, is in fact coming from him (and others). Before you go into a lengthy discourse about communism vs. capitalism, stay calm. Knowing this and understanding how blue-collar workers see themselves and what they value, gives us a clue of what a gamification-design for them needs to accomplish.
Because of the perception of their jobs, blue-collar workers respond to praise from a supervisor or manager different than white-collar workers. Especially if the praise seems not result from what blue-collar workers value most. What they value is meaning, dignity, and self-determination of their work. This does not mean that white-collar workers are not valuing those as well. But blue-collar workers tend to compare themselves to lower and higher status professions more often than white-collar workers do. And they tend to mistrust white collar workers.
When those values are not satisfied, they lead to job alienation, disengagement, and in the worst case to outright sabotage. However, those values are coming close to what gamification is about. Let's take a closer look at those values.
HR #IN10YEARS - The Gamification ScoreMario Herger
Companies spend billions of dollars every year to measure their employees, but the results are very poor: we don't get good data. With Gamification - the use of game design elements in non-game context - we track activities, achievements, and the progress of players in systems. This data is not only big, accurate, and a timely snapshot of a players skills and performance, but will also be a goldmine for HR, recruiters and the employees themselves.
Common Criticism of Gamification (and how to respond to it)Mario Herger
Many people have an opinion of Gamification - the use of game concept for non-game applications - although they don't lnow much about the topic itself. The following slides contain responses that I got in many encounters with colleagues, customers and friends, and my own responses to it.
Company Valuation webinar series - Tuesday, 4 June 2024FelixPerez547899
This session provided an update as to the latest valuation data in the UK and then delved into a discussion on the upcoming election and the impacts on valuation. We finished, as always with a Q&A
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
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"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
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Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
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Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
The key differences between the MDR and IVDR in the EUAllensmith572606
In the European Union (EU), two significant regulations have been introduced to enhance the safety and effectiveness of medical devices – the In Vitro Diagnostic Regulation (IVDR) and the Medical Device Regulation (MDR).
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6. … empathizes with people
by adding gameful experiences to work and life,
helping them to fulfill their interests and motivations
for the benefit of all involved parties.
Enterprise Gamification
7. Gamification Design Elements
EGC Wiki: http://www.enterprise-gamification.com/mediawiki/index.php?title=Gamification_Design_Elements
13. Competition is the Opposite of Collaboration
Competition in ecology and sociology is
a contest between individuals and entities
for territory, a niche, or a location of resources, for
resources and goods, for prestige, recognition, awards,
mates, or group or social status, for leadership.
It is the opposite of cooperation.
Wikipedia
①
15. Competition doesn’t last
[..] the same contest or even different contests that always last one day
or always last three days or always last one week will become boring
based on predictability and redundancy.
[..] The longer a contest lasts the harder it is to maintain the motivation
linked to it.
[..] running a short-term contest day after day until people get tired of it
will run it literally to death. Some people will lose their interest in that
contest forever [..]
Even a book praising sales contests talks mostly about
problems and how to fix them and how to fix the subsequent
problems…
Source: David L. Worman; Motivating with Sales Contests: The Complete Guide to
Motivating Your Telephone Professionals with Contests That Produce Record-
Breaking Results
③
16. Competition disadvantages Women
Men compete, when there is
any chance to win.
Best-achieving men may make
other men depressed
Men work in groups
Women compete, when there is a
high chance to win (they are better
judges of their own capabilities)
Best-achieving women serve as
“shining light” for other women
Women work in dyads, which
discourage competition but
emphasize relationship
During hormonal cycles people tend to overload faster, because of
already high dopamine/hormonal levels.
Sources: Po Bronson & Ashley Merryman: Top Dog – The Science of Winning and Losing
④
17. Competition leads to negative behaviors
Make people less likely to help each other1
(e.g. Microsoft’s stack ranking2)
Aggression towards winner3
Narcissistic self-enhancement, where the winners would feel a
malicious superiority over the losers3
Name calling4 – Muppet, Clancy, Bobblehead, Checkbook,
Clampett
1. Bryant, B.K. (1977). The effects of the interpersonal context of evaluation on self- and other-
enhancement behavior. Child Development, 48(3), 885-892.
2. http://www.vanityfair.com/online/daily/2012/07/microsoft-downfall-emails-steve-ballmer
3. Martá Fülöp, Mihaly Berkics, “Patterns of Coping with Winning and Losing in Adolescence“
4. New York Times: Name It; Clients Are Called It, March 14th, 2012
⑤
19. Competition creates administrative headaches
“20-30% of management time was occupied by the competition
and commissions management”
“..also sales people spent signification amounts of their time on
tracking their compensation and competition status.”
Source: Debunking the Myth of Sales Commissions
http://bit.ly/1avK3HP
⑥
21. When Commissions Wreak Havoc
Study Reward Result
Rhesus Monkeys solve puzzles Raisins Made more errors
Soma puzzle cubes $1 Spent 3min less on puzzles
Children play ribbon Spent less time playing
Playing game 4-400 Rupees Worse performance
Candle problem $5 Took 3.5min longer
Creativity commission Paid work less creative
Blood donation 50 kronor ($7) ½ of people volunteered
Day care $3 penalty 2x as many parents late
Radioactive Waste Storage $2,175 Agreement dropped by ½
The paid GMAT 2.5c / answer 15% less correct answers
Commie High 12% bonus GPA from 2.71 -> 2.14
Sources: http://tinyurl.com/on8rvte
⑧
22. Sales reps LOVE competition!
They love winning!
Sales Managers’ Statement
23. How long did competition last?
How often did you have to fix it?
Did all of your sales reps participate – or
always the same few?
Did your sales reps help each other?
How long did you stay at average with your
sales teams?
Because you may have destroyed it
for everyone else…
Sales Managers Should Ask:
24. Transient Managers Create Addiction
Source: Anton Suvorov “Addiction to Rewards”
Long Term
Manager
Transient
Manager
Rewards Few
Low
Many
High
Information
Disparity
Lower disparity Higher disparity;
confusing signals
Employees keep interest
feel up to the task
accept delayed gratification
loose interest
feel not qualified for task
prefer instant gratification
25. How many people can win? ⑨
Answer: 1, and everyone else loses
26. Sales Competitions - Summary
① Competition is the opposite of collaboration
② Only a handful of people compete
③ Competition doesn’t last long
④ Competition disadvantages certain demographics
⑤ Competition leads to negative behaviors
⑥ Competition leads to administrative headaches
⑦ Competition makes sales people hated
⑧ Only one person can win, but all others lose
⑨ Short term boost, long term damage
27. Gamification in Sales
① Give them Meaning
② Let them Collaborate
Reframe the Question “Who’s the competitor?”
(Hint: not your co-workers, and also not other companies; the
customer’s problem is)
③ Give them an excuse to Socialize
④ Let them Learn
⑤ Give them all 3 Types of Feedback
(appreciation, coaching, evaluation)
⑥ Gamification does not replace a compensation plan!
⑦ Let them have Fun!
8 Examples Of Monetary Rewards Leading To Worse Outcomes
http://tinyurl.com/on8rvte
Dan Pink quotes in his book “Drive – The Surprising Truth About What Motivates US” a number studies that looked at how tangible rewards influenced the motivation to solve and engage with tasks.
Example 1 – Rhesus Monkeys
In 1949, psychology professor Harry F. Harlow from the University of Wisconsin experimented with eight rhesus monkeys on learning. They gave the monkeys a simple puzzle device that required the monkeys to pull out a pin, undo the hook, and lift the hinged cover. For monkeys a pretty advanced task. The monkeys became quickly interested in the topic, played determinedly with the device, and figured out how the mechanism worked. During these activities the monkeys displayed signs of enjoyment.
The monkeys had done all this without having gotten any rewards, no food, affection or otherwise for what they were doing. According to the theories back then, offering rewards would certainly lead to better results.
When Harlow gave the monkeys raisins for solving the puzzles, the monkeys actually made more errors, and solved the puzzles less frequently.
Example 2 – Soma Puzzle Cube
In 1969, psychology graduate student Edward Deci at Carnegie Mellon University used the popular Soma puzzle cube as prop for study participants. He divided the male and female participants into two groups. One group A, and a control group B. Over three consecutive days, the participants received at the beginning of every one-hour session three drawings of configurations that they had to create out of the puzzle pieces. The drawings where the same for both groups at the given day, but every day there were thee drawings that differed from the day before.
On Day 1, both groups didn’t get a reward. On Day 2, participants of Group A were promised $1 for every configuration they successfully reproduced, but Group B didn’t get and wasn’t promised any rewards. On Day 3 none of the groups was promised and given any rewards.
Every day, once the participants had completed the first 2 configurations, Deci explained to the participants that he needed to enter the data in the adjourning computer room, and left them with a fourth drawing. This of course was a setup, as Deci monitored the participants in the adjourning room through a one-way mirror for exactly 8 minutes.
On the first day, participants of both groups continued the puzzles during the secretly watched period , and worked on them for an average of three and a half and four minutes. On the second day, “unpaid” Group B behaved like the day before, while participants of the Group A seemed really interested in the task. This group now spent on average five minutes on the puzzle. But on the third day, with no reward promised to both groups, Group A spent significantly less time on the puzzle: three minutes. Group B’s time was slightly higher than the two prior days.
Example 3 – Children Play
Psychologists Mark Lepper, David Greene, and Robert Nisbett watched preschoolers for several days and choose the kids who liked to draw during their “free play” time as study participants. With other words: they selected children who clearly enjoyed drawing. The divided then the children into three groups. The first group was the “expected-award” group, who would get a “Good Player” certificate if they wanted to draw. The second group was the “unexpected-award” group, which weren’t told that they would get a reward. The third group was the “no-award” group, no awards were promised, no awards were given. The two first groups, would get the certificated handed out at the end of the drawing session, where the firsr group would expect it because they were told, while the second group would get the certificates unexpectedly. That reward-experiment was done one time on day only.
Two weeks later the researchers visited the classroom of preschoolers again, an watched the free play time. When the teachers handed out paper and markers, the children from the previous “unexpected-award” and “non-award” groups, were drawing with the same energy and interest as they had two weeks before. But the children from the former “expect-award” group showed much less interest and spent much less time drawing.
Example 4 – Playing Games
Economists Dan Ariely, Uri Gneezy, George Lowenstein, and Nina Mazar from MIT, Carnegie Mellon, and the University of Chicago recruited eighty-seven participants in Madurai, India and asked to them to perform several exercises – including tossing tennis balls at targets, unscrambling anagrams, recalling a string of digits – that required motor skills, creativity, and concentration. The participants were separated into three groups. The first group could earn a reward of 4 rupees (equal one day’s pay in Madurai) for reaching the goals, the second group 40 rupees (10 days’ pay), the third group 400 rupees (nearly five months’ pay).
The result was that the people offered the small- and medium-sized bonus did perform the same, while the group with the largest bonus performed worst. According to the researchers, they lagged in nearly every measure behind the two other groups. The researchers wrote,“In eight of the nine tasks we examined across the three experiments, higher incentives led to worse performance.“
Example 5 – Candle Problem
Psychologist Sam Glucksberg from Princeton University tested in the early 1960, how rewards influence the problem-solving prowess of study participants. The task given was the “candle problem”, developed by psychologist Karl Duncker in the 1930s, which requires participants to overcome what’s called “functional fixedness.“ The task is to attach a candle to the wall so that it doesn’t drip wax on the table. As tool participants receive a candle, a box of matches, and a box of tacks. Figure 25 demonstrates of what has to be done. Typically, test subjects would try to tack the candle to the wall, until they understand that the box in which the tacks are can be used as well to reach the desired outcome.
Glucksberg now divided his participants in two groups, timing each groups duration to come to the solution. The second group however, was offered incentives. If the participant’s time was among the fastest 25% of all the people tested, the participant would receive a reward of $5. If the participant’s time was the fastest, the reward would be $20. Adjusted for inflation this is a pretty nice sum.
The result was that the incentivized groups’ time took nearly three and a half minute longer.
Figure 26: Duncker, Karl (1945): Candle Problem
Example 6 - Creativity
Three studies show the effect of extrinsically driven motivation for two professions: artists and scientists. In the first study, Harvard Business School professor Teresa Amabile recruited twenty-three professional artists, and asked them to randomly select from their work ten commissioned and ten non-commissioned works. These works were then handed to a panel of artists and curators, who didn’t know anything about the study nor the background of the works, and were asked to rate the pieces on creativity and technical skill. The panel rated the commissioned works as significantly less creative than the non-commissioned works, though the technical quality was rated as equal.
The second study conducted in the early 1960s amongst sophomores and junior at the School of the Art Institute of Chicago surveyed them about their attitude toward work and whether their motivations were more intrinsically or extrinsically focused. A follow-up study in the early 1980s compared the success of these students with their original dominant motivation. The result for men was that “The less evidence of extrinsic motivation during art school, the more success in professional art both several years after graduation and nearly twenty years later. [..] Those artists who pursued their painting and sculpture more for the pleasure of the activity itself than for extrinsic rewards have produced art that has been socially recognized as superior. [..] It is those who are least motivated to pursue extrinsic rewards who eventually receive them.“
The third study conducted in 2009 by Pierre Azoulay from the MIT, Joshus S. Graff Zivin from the University of California in San Diego, and Gustavo Manso from the MIT looked at the creative output and the impact rate of similarly accomplished scientists, who had received grants from either the US National Institute of Health (NIH) or the Howard Hughes Medical Institute (HHMI). The first funding process from the NIH emphasizes “short review cycles, pre-defined deliverables, and renewal policies unforgiving of failure,“ while latter one from the HHMI “tolerates early failure, rewards long-term success, and gives its appointees great freedom to experiment.“ The rate of high-impact from research funded by the HHMI was much higher.
Example 7 – Blood Donation
In 2008, Swedish economists Carl Mellström and Magnus Johannesson decided to test the bold theory from British sociologist Richard Titmuss, who had stated in 1970 that paying for blood donation was not only immoral, it was also ineffective. He speculated that this would reduce the blood supply. Mellström and Johannesson built on that and conducted a field experiment at the regional blood center in Gothenburg. From the 153 women interested in donating blood, they divided them into three groups. The first group donated blood without being offered a reward, the second group was offered 50 Swedish Kronor ($7), and the third group was also offered a 50 Kronor reward with the option to donate the reward to a children’s cancer charity. 52% of the first “non-award” group went ahead and donated blood, 30% of the “expect-reward“ group women donated blood, and 53% of the third group with the option to donate the reward donated blood. However, for men the offered rewards did not have a statistically significant effect.
The interesting thing is that not all rewards seem to be bad. The third group’s option to immediately donate the money negated the effect that the second group experienced. Similarly, a reward that removes an obstacle to altruism – like the Italian government giving blood donors aid time off work – increased blood donations.
Example 8 – Day Care
Economists Uri Gezner and Aldo Rustichini studied over a period of twenty weeks in Haifa, Israel in 2008 a child care facility that opened from 7am to 4pm during week days (which is from Sunday to Thursday in Israel). Parents were supposed to pick their children up at closing time, otherwise the teachers would have to stay late. The economists recorded the number of parents who arrived late each week. After the fifth week the researchers changed the procedure and introduced a penalty that had to be paid by late coming parents. For every time a child was picked up after 4:10pm, a fine of approximately $3 per child had to be paid.
The result was that the number of parents picking their children up late doubled after the fine was introduced. And it stayed at this rate, even after the fine was removed and the late-pickup-policy reversed to the original one.
Example 9 – Radioactive Waste Storage
In 1993 the Swiss government identified two small towns as potential locations for nuclear waste storages. How would the residents react to the news? Would they understand that with nuclear technology, some areas would have to take one for the team, or would they resist like it happened in many other countries?
To find out, the Swiss government asked two researches from the University of Zurich to organize town hall meetings and talk to the residents. Of course the people were concerned, but national pride kicked in and a slight majority of 50.8% said they would accept the nuclear waste storage. But the amount of people that disagreed was still too much for the politicians, so the Swiss government sweetened the deal by offering 5,000 Swiss (approx. $2,175)francs for every resident per year.
From a rational perspective any amount paid should make it easier to swallow the prospective of living beside a nuclear waste facility. While not everyone of the 49.2% can be convinced, at least a certain amount should switch the side to accept. But what happened was totally unexpected. The number of residents agreeing to the storage in their town dropped by half down to 24.6% (from 50.8% without being compensated). When the government increased the compensation to first $4,350 and then $6,525 per year per resident, the number of people agreeing remained stuck at about 25%.
Example 10 – The paid GMAT
Students at an Israeli university were asked to take a mock version of the Graduate Management Aptitude Test (GMAT), that students who apply for business schools have to take. Now these students had no intention to apply for business school, but volunteered for this research to take it. As usual in such kind of studies, the researchers split the subjects into two groups. One group was just told to go ahead and take the test, the other group was told that for every correct answer they could earn 2.5 cents. Nothing to really get drunk, but better than nothing.
With all the prior examples, you will be able to guess easily which group performed better. The first group of unpaid students performed with an average score of 28.4, while the paid group fared worse with 23.1. Also the top 50% performers in the unpaid group outperformed the paid group with an average of 39 vs 34.9.
Example 11 – Commie High
Community High School in Ann Harbor, MI was the city’s first alternative education school. The school didn’t have many rules, and even those that were in place were routinely overlooked. Students could skip classes or not miss them, average attendance was at 51%. But that didn’t have much effect on the GPA, which was at 2.71.The starting salary for teachers was in 1996 at $22,848, so heavy workload and low salary showed the commitment of the teachers. And the school had a long waiting list of students who wanted to get in.
When a new state law took effect that allowed schools to run more independently and try out new, innovative programs, the teachers and administrators brainstormed to find a new program. Now, there was not need to come up with a new program, but the staff felt obliged to do something. Lacking good ideas, the staff settled on the idea to increase attendance of students and not have them miss too many classes. To evaluate attendance, the teachers were told that they would get a bonus that was equivalent to 12% of their annual salary, if the attendance was at least 80%.
Remember, there was no need for the school to introduce this program, teachers hadn’t asked for salary increases. They had purely come up with a program because the state now allowed them to experiment. Long story short, the attendance rate increased from 51% to 72%. Big success, right? Nope, because the average cumulative GPA dived from 2.71 to 2.14. And there was no change in the GPA test standards, as well no change in the composition of the student body.
An after-image of the experiment showed that the focus of the teachers had shifted. Instead of focusing to inspire the students to achieve their true potential, they had focused on having students attend classes.
Meta-studies
In 2009, scholars at the London School of Economics analyzed fifty-one studies of corporate pay-for-performance plans. These economists’ conclusion: “We find that financial incentives may indeed reduce intrinsic motivation and diminish ethical or other reasons for complying with workplace social norms such as fairness. As a consequence, the provision of incentives can result in a negative impact on overall performance “
A meta-analysis of 128 studies examined the effects of extrinsic rewards on intrinsic motivation and came to the conclusion that engagement-contingent, completion-contingent, and performance-contingent rewards significantly undermined free-choice intrinsic motivation, as did all rewards, all tangible rewards, and all expected rewards.
When money is used as an external reward for some activity, the subjects lose intrinsic interest for the activity.
Rewards can deliver a short-term boost – just as a jolt of caffeine can keep you cranking for a few more hours. But the effect wears off – and worse, can reduce a person’s long-term motivation to continue the project.
Israeli entrepreneur Ori Brafman and his brother, the psychologist Rom looked at similar effect, but from a different angle. In their book “Sway – The irresistible pull of irrational behavior” they looked at surprising choices, when people where offered seemingly rational options.
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Dan Ariely, Uri Gneezy, George Lowenstein, Nina Mazar, “Large Stakes and Big Mistakes,“ Federal Reserve Bank of Boston Working Paper No. 05-11, July 23, 2005
Sam Glucksberg, “The Influence of Strength of Drive on Functional Fixedness and Perceptual Recognition,” Journal of Experimental Psychology 63 (1962): 36-41
Teresa M. Amabile, Elise Philips, Mary Anne Collins, “Person and Environment in Talent Development: The Case of Creativity,“ in Talent Development: Proceedings from the 1993 Henry B. and Jocelyn Wallace National Research Symposium on Talent Development (Dayton: Ohio Psychology Press, 1993), 273-74
Jean Kathryn Carney, “Intrinsic Motivation and Artistic Success“ (unpublished dissertation, 1986, University of Chicago)
Pierre Azoulay, Joshua S. Graff Zivin, Gustavo Manso, “Incentives and Creativity: Evidence from the Academic Life Sciences,” Dec. 30th,2011 http://pazoulay.scripts.mit.edu/docs/hhmi.pdf
Carl Mellström, Magnus Johannesson, “Crowding Out in Blood Donation: Was Titmuss Right?” Journal of the European Economic Association 6, no. 4 (June 2008): 845-63
Nicola Lacetera, Mario Macis, “Motivating Altruism: A Field Study,” Institute for the Study of Labor Discussion Paper No. 3770, October 28, 2008
Uri Gezner, Aldo Rustichini, “A Fine is a Price,” Journal of Legal Studies 29 (January 2000).
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Randall Eberts, Kevin Hollenbeck, Joe Stone, Teacher Performance Incentives and Student Outcomes, Journal of Human Resources 73 (2002): 913-27
“LSE: When Performance-Related Pay Backfires,“ Financial, June 25, 2009.
Edward L. Deci, Richard M. Ryan, Richard Koestner, “A meta-Analytic Review of Experiments Examining the Effects of Extrinsic Rewards in Intrinsic Motivation,” Psychological Bulletin 125, no. 6 (1999): 659.
Edward L. Deci, “Effects of Externally Mediated Rewards on Intrinsic Motivation,“ Journal of Personality and Social Psychology 18 (1971): 114.
Dan Pink; Drive
Ori Brafman, Rom Brafman, Sway – The irresistible pull of irrational behavior, Crown Business, 2008
Karl M. Kapp: The Gamification of Learning and Instruction, p.222