Dan Ariely, a Professor of Psychology and Behavioral Economics at Duke University wrote a book titled Predictably Irrational where he describes the difference between Intrinsic and Extrinsic Motivators and how these affect management decisions in driving employee behavior . Ariely suggests that moving from extrinsic motivators or rewards such as money, points or schedules, to intrinsic motivators or internal needs including friendship, commitments , and loyalty, is in essence making a move from a market relationship to a social relationship.
An extrinsic or market relationship in this case is defined by the exchange of monetary currency for a product or service. An Intrinsic or social relationship is the exchange of an intangible for a product or service. Ariely illustrates this differentiation in his book with a Thanksgiving dinner scenario, also retold by Jeff Monday in the video below:
Imagine you are at your in-laws house for Thanksgiving. At the end of the fantastic meal you walk over to your mother-in-law and instead of giving her the customary social payment of a big hug and thank you, you pull out your wallet and ask her how much she wants for the meal. Here is where the behavioral economics get interesting. Even if you were to offer her $1000 for the meal, a meal that only cost her only a couple hundred dollars and a few hours of her time, she and everyone else at the table will be offended because they will feel you cheapened the day.
Why? Well behavioral economics show us that the intangibles like love, gratitude, trust, and community that we receive in a social exchange are difficult to put a value on, so difficult in fact, that we can’t calculate them and value them as priceless. By offering the $1000 to your mother in law for the Thanksgiving dinner you are putting a cheap value on something that is priceless in her mind. This inequity is caused by trying to blend a social exchange with a market exchange and it is an important lesson for managers who are moving to a management style with greater intrinsic motivators.
Jeff Monday’s video discussing Ariely’s intrinsic and extrinsic motivation (approx 5 minutes):
The Thanksgiving dinner example can be described within a gaming context, as Sebastian Deterding presents in his slideshow Pawned. Gamification and its Discontents. Deterding shares a similar scenario where an extrinsic motivator interfered with intrinsic needs:
…adding explicit rule systems to a given conduct can mess with the implicit social rules, norms and meanings governing it. Take akoha, a service that tries to promote random acts of kindness by casting them as “missions” you collect awards and gifts for. Now a befriended game designer of mine tried this with another game designer friend of his and invited him for a coffee, as the mission required. When the friend curiously asked why he was invited, my friend replied in explaining the service and mission he was on. To which the friend furiously answered:
“Have you any idea how degrading that is, being invited not because you care about me, but because you want to progress in some game?”
We have learned that game rewards or points can cause conflict when it is the primary motivator in exchange for a friend’s intrinsic social needs. But what would happen if the motivations in this scenario were instead presented in this fashion:
“Would you like to meet for coffee and play this social game together?”
So rather than suggesting the points are the primary reward, the player presents an opportunity to build upon a social relationship as the main motivator. This is a similar positioning to the popular social game “Words with Friends”, where players can “catch up with friends as you kick their butts in a word game”. Taking it a step further and offering both parties added synergies in game play will enforce the link, emphasizing the importance of the relationship. The Washington Post reported on social bonds created in online games:
The most popular social games are collaborations. To progress quickly through the games, you need to help other players, and they need to help you. Such collaborations, according to game designers and users, foster a sense of community in an often-splintered world.
In our examples, shifting focus to an intrinsic value would probably have produced a stronger relationship, even when external motivators are part of the system. However, that doesn’t mean we ignore extrinsic motivators altogether, as Steven Reiss, a Professor of Psychology at Ohio State University argues,
“Individuals differ enormously in what makes them happy – for some competition, winning and wealth are the greatest sources of happiness, but for others, feeling competent or socializing may be more satisfying. The point is that you can’t say some motivations, like money, are inherently inferior.”
The illustration above offers a perspective where intrinsically positioned game mechanics can act as facilitators for social activity and exchanges. Games give us an effective framework to bond with others. Interestingly enough, as soon as we try to measure those intrinsic mechanics we move them into the realm of external motivators. That’s not necessarily a bad thing, as the number of Twitter followers or friends on Facebook influence us in different ways. But we want to try to build systems where externals aren’t the only things available. Internationally-known metagame expert and social game designer Amy Jo Kim describes game mechanics as the sauce or seasoning on the meat of the core game. Designers need a great core game and should use game mechanics to help improve it. Game mechanics as extrinsic tools like experience bars or achievements will push the player to reach the next goal. But things of intrinsic value will always provide greater incentive for the player.
Dan Ariely’s video discussing experiments in motivation:
Another part of Ariely’s discussion, Motivation in the Knowledge Economy: