Money and Motive

Why do we work? This morning I read a very good piece on on experiment about CEO pay and how it ties in to actual corporate performance. It doesn't: it's actually counter-productive to higher performance. This researcher went to India to conduct his first test. He offered money incentives for delivering results. The groups were divided into three and each was offered the same work for a different bonus. The high bonus offer was $50, equivalent to six months pay for an Indian middle level worker and the low bonus offer was 50 cents, an equivalent in India to a day's wage. The winners were all in the 50 cent group and the losers were the $50.

He took the experiment to a group of seniors at MIT and offered $60, $300, and $600, respectively. When it was purely mechanical performance the $600 group won, but at the cognitive level they failed. The $60 group won in that category. Then when they were asked to perform their work under public scrutiny, the $600 group failed. The private work of the $60 group made them the front-runners.

What does it say, other than the obvious, that CEO pay at a level 450 times the lowest employee of the firm should be punishable by death when the company fails? Perhaps this small experiment indicates we work for something more than money, that we strive to achieve less under pressure and more for the pure satisfaction of achievement as its own inherent reward. 

People need money and are definitely happier when rewarded with a fair wage, but exorbitant bonuses just put us to sleep, make us take our eyes off the ball and get just a little too comfortable. 

We are living in uncomfortable times in the wake of our ailing world economy. We mustn't recover too quickly, lest we lose the opportunity to know what it means to wake up and keep our eyes on the ball. It doesn't take a rich CEO to have a clear head and a cool moral fiber. We are all in this together now, so let's keep our eyes wide open!