Staff incentives should consider extrinsic and intrinsic motivation

candle experiment incentivising employeesBusinesses need to realise that employee motivation has changed, the carrot and the stick approach no longer works in all cases and it can sometimes do more harm than good by destroying innovation and creativity.

Behavioural scientists have investigated the motivation behind people’s attitudes for many years. Have you ever come across the candle problem? For those of you that aren’t aware of it, Karl Dunker created an experiment where he brought people into a room, gave them a candle, some thumbtacks and some matches. Then he told them to attach the candle to the wall so the wax doesn’t drip onto the table.

Some people start by trying to tack the candle to the wall, while others melt the side of the candle to attach it to the wall. Eventually, most people realise that the box that holds the tacks can be used as a platform for the candle, which stops the wax dripping onto the table. It’s an experiment in creative thinking.

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Incentivising the candle experiment

The same candle experiment was repeated by a scientist named Sam Glucksberg, who took his participants and told them “I’m going to time you, how quickly you can solve this problem.” To the first group he said, “I’m going to time you to establish norms, averages for how long it typically takes someone to solve this sort of problem.” To the second group, he offered cash rewards. He said, “If you’re in the top 25% of the fastest times, you get $5. If you’re the fastest of everyone we’re testing here today, you get $20.”

Bizarrely, it took the second group three and a half minutes longer to solve the problem despite the cash rewards on offer. That’s not the way it should work, should it? If you want people to perform better you need to incentivise them, so why didn’t the second group solve the problem faster than the first group?

This result isn’t a one-off. The experiment has been repeated many, many times in the last 40 years, and all with the same result.


What is going on?

The problem is that contingent motivators, such as a cash reward, only work in some circumstances. And perhaps worryingly they can do more harm than good.

This is behaviour I see repeated in businesses across the UK. Senior leaders have a set of assumptions about what motivates their staff and their incentive programmes are built around this set of assumptions – that usually consider only extrinsic motivation.

In intrinsic motivation, motivation is built around the desire to do something because it matters, because it is interesting, because we like it or because we want to be part of something bigger or significant.

Intrinsic motivation is based on three elements: autonomy, mastery and purpose.

  • Autonomy: the urge to direct our own lives.
  • Mastery: the desire to get better and better at something that matters.
  • Purpose: the yearning to do what we do in the service of something larger than ourselves.

This is why it took the incentivised group in Sam Glucksberg experiment three and a half minutes longer to solve the problem.

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What should businesses do?

Self-direction increases motivationIf your organisation depends on creative, innovative or even just engaged individuals, then you need to rethink the way you motivate your employees. Yes, incentives will always play a part but you need to combine them with the ability for employees to have some self-direction. Giving employees control over their time, their task and their technique.

A great example is software companies. They combine recognition and reward schemes with self-direction – often they give employees dedicated time to work on any project they like as long as it’s not part of their normal job, before presenting what they’ve done to their colleagues. There are also more and more organisations moving to a Results Only Work Environment (ROWE): employees show up when they want, work when they want and work from wherever they want, as long as the work gets done.


Organisations that are moving their business towards these more flexible working models are finding that productivity goes up, employee engagement goes up, job satisfaction goes up and profits go up.

So, isn’t it about time for all organisations to consider a new way of motivating staff?


John Sylvester

John is responsible for the motivation division of p&mm ltd and a Director on the board of the IPM. Specialising in developing, implementing and directing many large scale staff motivation, recognition and employee communications programmes.
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