“…the day is not far off when the Economic Problem will take the back seat where it belongs, and that the arena of the heart and head will be occupied, or re-occupied, by our real problems—the problems of life and of human relations . . .” These words were not written recently by any de-growth, new age, utopian moralist but by John Maynard Keynes, in his preface to Essays in Persuasion written in 1931.
This was a period of an ongoing debate within the economic world that one decade later led to the adoption of the GDP as a universal measure that assesses the degree of development. Within the GDP as a measure of happiness logic, the mainline of reasoning argued that by having more income people could satisfy more needs and, therefore achieve greater well-being. Hence, be happier. Although there was no direct observation of people’s experience of being well, it was assumed that more income was always better (Rojas, 2019). What the GDP as a measure of happiness debate ignored to emphasize was that it was based on an assumption.
Having work helps to define the purpose that moves us. But, it would be a mistake to think that money should be the final purpose because there is solid evidence showing that ‘people should be paid enough not to think about money, but about work’, as Slavoj Zizek (2012) well recommended.
His recommendation is inspired by the MIT research, carried out with different groups of students. The researchers chose a group to which they assigned different tasks to perform. These challenges consisted of memorizing long sequences of digits, solving word and geographic puzzles, even facing physical challenges. To incentivize performance, the researchers offered them three levels of rewards:
- If the results were modest they received a small incentive of money.
- If the results were medium, they received a somewhat better incentive.
- If the results were very good, they received a big monetary incentive.
What the researchers found was completely contrary to the logic of “more income is always better“, commonly assumed in the business world. When it was about performing purely mechanical tasks, the incentives responded as expected; more incentives generated better performance. But when the questions moved to the field of tasks that required cognitive effort, the results were opposite: the greater incentive led to worse performance.
On the one hand, to some these results can be interpreted as a type of Marxist ideology and propaganda, which rests on the motto ¡From each, according to his abilities; to each according to his needs!” But the fact that the study was financed by the US Federal Reserve Bank clears these doubts. To go further, thinking that perhaps the prize of around €50 would not be tempting enough for a student who can afford to study in an elite school, the researchers decided to head to a less developed country, specifically India.
There they were met with an even bigger surprise: people in the middle incentive range did not perform any better than those in the low range. But the big surprise came by looking at the results of the range of people who were offered high incentives. These were the worst performers of all. In their case, more incentives led to worse performance. The experiment was carried out many times by psychologists, sociologists, and economists in different countries and the result was always the same. For easy-to-perform, mechanical tasks the principle greater incentive = better performance works. But whenever the tasks require cognitive effort through creative and/or conceptual thinking, this model does not work. (Paragraphs were extracted from Conectar los puntos / Ch. 13 / El proceso como propósito)
If the logic behind “more income is always better” was true then the last people to complain would be the Wall Street analysts. The incentive of $150,000 or more straight out of college with the promise that within a decade compensation can reach seven figures, should be more than enough to provide happiness. And yet, it does not!
Last week, the New York Times reported on the group of disgruntled first-year analysts at Goldman Sachs who revealed an average of around 100 hours per week practice, while saying that they considered themselves victims of workplace abuse.
“The analysts rated their job satisfaction as two out of 10 and said they were unlikely to stay at Goldman in six months if working conditions remained the same. In addition to the long hours, the analysts cited unrealistic deadlines, being ignored in meetings, and micromanagement as major sources of stress.” NY Times. Even in the Temple of Money, the principle greater incentive = better performance failed to work.
The ‘Decent work and economic growth’ goal has a lot to do with Keynes’s call for having heart and head «occupied, or re-occupied, by our real problems—the problems of life and of human relations». It is for this same reason that the modern organizations that provide decent work and economic growth should be(come) learning organizations.
This way, through internalizing the idea that “organizations learn only through individuals who learn” (Senge, 1990), employers get additional incentives to offer to their employees. At the same time, employees get to think more about work than about money. They get to engage with each other within the context that stimulates greater individual sense, purpose, and hope.
Learning organizations are considered those that ‘facilitate the learning of all its members and consciously transform itself and its context’ (Pedler et al., 1989). By having more ‘enterprises made up of learners’ (Senge, 1990) learning becomes a stronger incentive than money. At the same time, it leads us away from the uncorroborated presumption that people’s well-being increases with the expansion of the consumption possibilities. By stimulating people to seek satisfaction in learning instead of buying things, learning organizations help to slow down the material loops and reduce overconsumption. This way, decent work leads to sustainable economic growth.
Boris Matijas 