The Risk of Using Money as a Motivational Tool

Managers, educators, parents and politicians are always looking for ways to motivate people.  That’s why when companies want employees to do something unpleasant or difficult they offer bonuses and other financial incentives. The most common practice to motivate people, also the easiest way to do it, is putting money in people’s pockets. It’s the most pervasive form of treat in our culture.

Money is is a good short term motivator. As soon as you get a check your motivation skyrockets. In other words, you get a motivation high. The problem is that it doesn’t last long.  The effect may last a day, a week, or at best, the time it takes you to burn that check on BestBuy or Macy’s. After that you’ll need another fix to be back on high spirits. In a way, you become dependent to it, addicted.

Here’s the interesting part.  Contrary to our intuition or common sense, offering financial treats can bring unintended consequences and turn out counter-productive to our long term goals. This is because there’s a deep relationship between motivation and reward; a relationship that has been coded in our primitive areas of the brain. To find out how deep rooted this connections are, we need to travel to Switzerland:

In 1993 the Swiss government identified two towns as potential nuclear waste depositories, but they didn’t know how the townspeople would react to this. Would they cooperate out of social obligation? Greater good? National Pride? Or would they openly reject the proposal? -Personally, I’d rather have an ancient indian cemetery than nuclear waste buried under my house-. So, the Swiss government popped the question in  a town hall meeting. The results were surprising (to me). Turns out that 50.8% of the people agreed to have the nuclear waste buried in their backyards, but the government was still worried about the remaining half so they tweaked the proposal a little bit by adding a financial incentive. Residents were offered U$D2.175 per year if they agreed to have the depository built in their town.

We normally assume that if we throw money into the equation people will be more prone to take any offer. After all, some money is better than nothing. The results,  %24.6 agreed to host the nuclear waste in their town. When the bet was raised to $6.525, only one person changed his mind within those 24.6%. So, instead of being  a driver for support, money operated as a disincentive.

There’s a study that has been done by researchers at the National Institutes of Health, which pinpoints the neurophysiology behind this paradox. They discovered that two areas of the brain are involved in our decision making process.  The nucleus accumbens, associated with our wild side, is triggered while we gamble, or ride a roller coaster. It is also triggered when using drugs such as cocaine. Scientists call it the pleasure center since it’s associated with the high that results from drugs, sex and gambling. Financial compensation also triggers this area and it’s also the center that drives addiction. Money works like doing a small line of cocaine. The more money is on the table, the more the nucleus accumbens fires up.

On the other hand, the center that gets activated by altruistic behavior is the posterior superior temporal sulcus. It’s the part of the brain responsible for social interactions. When we ask people favors, when favors are returned, when we donate, we are activating this region of the brain.

The most important finding in this study was the discovery that both centers can’t work at the same time. When both centers go face to face, the pleasure center hijacks the altruism center. This is due to a difference between the nucleus-a (for short) and the PSTS (you know what that is). The pleasure center requires a stronger stimuli than the altruistic center to be excited.

Let’s go back to our nuclear waste story. Most people agreed to have the inconvenient nuclear dump when the pitch was made appealing to their sense of nationalism (or altruism); when it was in the name of common good. The situation was processed differently when money was thrown into the mix. The pleasure center took charge of the decision making process. This is (roughly) how the proposition was weighed in both scenarios:

• Nuclear waste vs. the best interest of the nation
• Nuclear waste vs. a few hundred bucks in my pockets every month

Now, think about your work environment. If a co-worker asked you to stay until late to help him finish a task he’s having problems with, you’d be more inclined to walk the extra mile for your buddy and help his cause. But if instead, he offered you $15 bucks per hour, you’d be most likely to dismiss the request. 15 bucks is just not worth the effort and stress.

When looking for incentives to motivate employees, students or children, consider the impact of using money as a motivational tool and assess whether you are trying to achieve short term or long term motivation. Depending on your needs, using money as a treat may not be in your best interest.

Inspiration for this article from Sway: the irresistible pull of irrational behavior

Tweet with me @ftarnogol

Image credit, Life Hack

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Article by Fernando

The guy in charge of this blog - husband, Psychologist, former Manager, Blogger, Job Coach, Recruiter and Information Junkie. Yes, I am all that.

Fernando has written 237 awesome articles for us at FT Careers Blog

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