Toyota Way: Motivating Work Groups Through Intrinsic ?? Rewards Or Extrinsic ?? Or Both?

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??How to motivate our teams to go beyond the minimum effort and make suggestions for improvement?

??What seems to automatically come to mind is extrinsic rewards and punishments—which means you give people something if they perform well, or you take something away if they do not.

??With repetitive manual work, you would think rewarding people with pay per piece would make sense. Or if you want creative ideas for improvement, why not pay per idea?

??For example, American auto companies used to provide a bonus for implemented suggestions proportional to the cost savings. Some workers even got cars.

??It led to conflict over whose idea it was and union grievances over the proper amount of the bonus, but it did produce some good ideas.

?? Karl Duncker published a study in 1945 that looked at how extrinsic versus intrinsic rewards impacted how subjects performed a task focusing on speed.

?? The challenge was to attach a candle in some way to a wall as fast as possible.

?? He divided subjects into an experimental group that received intrinsic rewards—doing this for the benefit of science—and a control group offered extrinsic rewards—money if the subject won.?

?? In experiment 1??, he provided some supplies laid out, including tacks in a box. Subjects ended up trying various things that failed, like melting wax and trying to use the wax to stick the candle to the wall.?

?? Nothing worked until they discovered the simple solution of removing the tacks from the box, tacking the box to the wall, and using it as a holder for the candle.?

?? Who did better??Surprisingly, those with intrinsic motivation won, by a lot. Money actually hurt performance, and the financially incentivized subjects on average took longer to discover the secret.

?? In experiment 2??, the box was empty and the tacks were laid out separately.?

?? In this case, it was more apparent how the box could be used, and subjects often went right to the correct solution.

?? Those incentivized by money easily beating out subjects not offered money.

?? His conclusion was that

?Extrinsic rewards can be powerful motivators when the work to be done is very clear and creative thinking is not required. 

?When “outside the box” thinking is needed, money causes people to try to rush toward the goal, and they think less deeply.        

Source: Liker, Jeffrey K.. The Toyota Way, Second Edition: 14 Management Principles from the World's Greatest Manufacturer (p. 225). McGraw-Hill Education. Kindle Edition.?