Management Perspectives

Why is Dan Ariely important?

Dan Ariely is a professor at Duke University, a trained psychologist, and a behavioural economist who is widely regarded as one of the most important scholars in his area. He is noted for his wide-ranging and incisive research on human behaviour and psychology and has authored three best-selling booksPredictably Irrational, The Honest Truth about Dishonesty, and The Upside of Irrationality. Principal ideas emanating from his research on Behavioural Economics and Psychology are held in high regard in the academic circle.

Dan Ariely shot to notice when he challenged the basic notions of motivation in the organisation through his research. One of his most famous experiments was conducted at a semiconductor factory of Intel in Israel (Research was published in the paper titled- It’s (not) all about the Jacksons: Testing different types of short-term bonuses in the field, 2014) where employees, at the end of their workday, were given either a bonus of $30, a pizza voucher, or a text message complimenting their work by the boss. Pizza turned out to be the best motivational reward but eventually as the week passed, Ariely and his team found that the compliment received from the boss had the best effect on the employees. The study concluded with the notion that employees prefer to be valued and appreciated, and their performance primarily dwelled upon appreciation by the boss over monetary benefits.

Ariely’s research on organisational motivation rocked the management diaspora and paved the way for several management theories revolving around the ideas of intrinsic motivation at work. Ariely has argued that monetary benefits do not actually motivate employees in the long run; a sense of purpose, work autonomy, and optimum acknowledgments are the key forerunners for employees’ performance. The article put forth his intricate theories in a simple form, and if imbibed well, can help organisations understand the basic nuances underlying employee motivation.

Ariely’s genesis of organisational motivation

Dan Ariely’s prior inspiration to work in motivational theories dates back to his teenage years when he was horribly injured in an accident, wherein 70 per cent of his body succumbed to third-degree burns. Consequently, the next few years of his life were spent in hospital beds with nurses trying their best to heal his wounds. Miraculously, Ariely survived the ordeal and attributes this period of pain and tribulations as his inspiration for his lifetime work on human behaviour and motivation. Finding meaning in tough times helped him sail through the agonising trauma of the psyche afflicted by the wounds of dismay. He has always emphasised the fact that human motivations are affected by several dynamic variables and one among them is whether we generate a sense of meaning in whatever we do or not. Research conducted by BetterUp labs in 2017 corroborates that employees’ motivation at work is directly proportional to them finding their work to be meaningful. (Reference- https://www. betterup.com/press/workers-value-meaningat-work-new-research-from-betterup-showsjust-how-much-theyre-willing-to-pay-for-it)

According to a poll conducted in 2019, involving more than 3,500 workers in the United States and the United Kingdom, meaningful work outranks income, bonuses, and other criteria in career relevance across all age groups. Meaningful work becomes increasingly essential to us as we age, concluded in a poll commissioned by a software company called Workhuman. Those who had a sense of significance and purpose in their work were four times more likely to enjoy their work and live a productive life. (https://www.workhuman.com/ press-releases/meaningful-compensation/employee/)

Money is not always the best motivator, since it puts a monetary value on qualities like dedication, zeal, punctuality, politeness, and ambition which are not easily quantifiable. Good incentives, on the other hand, focus on acknowledgment and the development of relationships. People who are rewarded for quantifiable achievements are more likely to search for methods to accomplish the goal from various means which can be unscrupulous and dishonest; this is also one of the reasons that monetary rewards do not add much value to employee motivation after a certain point.

Ariely’s Four Laws of Organisational Motivation

Law 1: Meaningful work is the source of employee motivation

A. Generate a sense of meaning. Employees are more motivated when their work has meaning. Simply understanding that there is a sense of purpose in the work they do is enough to enhance employees’ productivity. The productivity boost is even greater when people find intrinsic enjoyment in their work, and they will continue to do that work even when monetary rewards have diminished.

B. Motivating an employee is hard, demotivating him/her is easy. People can be forced to do meaningless work or can have their existing work become meaningless when they are asked to dismantle it. When work is meaningless, the performance of people who enjoy the work is as low as that of people who do not. When projects are abandoned because they are no longer in a company’s best interests, its employees can lose motivation if they feel that their work on that project is viewed as meaningless by the management. The research by Ariely revealed that it is easier to destroy meaning for employees than it is to create it.

C. Accountable leaders. Many business leaders fail to reinforce meaning in order to create motivation. Companies that reinforce employee hierarchies fail to make employees feel unique and valuable. An added investment in meaning generates increased productivity. It is the leader with whom the onus lies to create motivation at the workplace.

Law 2: The desire to create is one of the deepest yearnings of human soul
A. Creativity is next to divinity. People associate value with the things they put effort into even if those things are not particularly unique. The greater the effort, the more value they assign to the results, even if they are of objectively worse quality. Employees feel a greater attachment to products they assembled or chose to design themselves. Thus, creativity at the workplace is an important cornerstone of employee motivation. Workers who are motivated to be creative are often more productive and inventive than those who are not.

Law 3: Non-monetary rewards are the true motivational rewards
A. Personalised rewards. The offer of a reward can be a strong motivator as long as the reward supports the meaning of the work. Leaders must think constantly about the rewards they give to their workers and how they are motivating their teams. It is recommended that rewards should be personalised rather than keeping it the same for every person regardless of interest or suitability. This ensures that employees feel that the leadership recognises them individually, is interested in them specifically, and cares that they feel comfortable and accepted in the workplace.

Some rewards are unquantifiable. Applying monetary value to interpersonal relationships is often upsetting to both parties because it can imply that the entire relationship has been about an exchange of goods rather than about helping one another to achieve a mutual goal. Rewards like attention, recognition, responsibility, credit, equity, fairness, freedom to exercise creative independence, growth opportunities, etc. can never be equated with money. The human brain deals with money differently than it deals with other objects of value. Even if someone brings a pie worth $60 to a family dinner, the impact is more rewarding to the relationship than if that person wrote a check for $60 and gave it to the host.

Law 4: Nothing lasts forever, not even motivation.
A. Beyond ephemera. We all know the eternal truth, that everyone who is born on this planet shall see an end, and that death is a stealth motivator. The reality is that we are perishable, and somebody no sooner can replace us and take our place in the organisation when we have reached fate’s end. Being able to work on something meaningful is a very crucial aspect between life and death. Employees may ease emotions of worthlessness in the job by generating purpose for themselves and others. Building meaning can also be connoted to leaving a legacy, it does not necessarily mean doing something great that no one else has done. This could also mean repairing ties with colleagues in the organisation, revisiting the way we approach our work, or establishing a program or foundation that continues to assist others after the originator has passed away.

The desire to make a lasting impact shall motivate employees to do meaningful things as employees, in the end, are more scared of a pointless existence than of death.

Epilogue
The crux of Ariely’s idea of motivation revolves around ‘meaning’. If employees find meaning in their work and are valued for whatever they do, their motivation levels will always be at their peak. The best that any organisation can do is attach meaning to the employee’s work as a sense of meaning will win over the impediments that hinder employees’ growth in the organisation.

A great psychiatrist and author, Viktor Frankl, has noted how the inherent human yearning for meaning is so strong that people search for their life’s purpose even in the direst of circumstances. As a result, meaningfulness is more important to employees than any other aspect of their job, such as pay and perks, growth opportunities, or working conditions.

Work that is meaningful, will always be very motivating, resulting in greater productivity, devotion, and satisfaction. Organisations that instill the notion of meaningfulness in employees will always outlast and triumph over the organisations that don’t.