Customizing Work Environments for Creative Workers [Archive.org URL]

It’s often difficult in creative fields to set specific deliverables to which you can attach incentives. And the very fact that a manager focuses so much on money can strip away workers’ own intrinsic motivations or blind them to other goals that don’t come with a bonus attached.

In the search for other solutions, Harvard Business School professor Karim R. Lakhani and London Business School professor Kevin J. Boudreau started with a simple hypothesis: instead of seeing the individuality of creative workers as an impediment, what if it could be used as a strength. Through a 10-day field experiment involving over 500 high-powered computer programmers, the researchers sought to determine just how employees would respond to working in environments somewhat customized to how they like to work. They divided the participants into virtual “rooms” of 20 people, competing against each other to solve a complex algorithmic engineering problem. In each room, only 5 participants were declared winners.

Rather than sort participants into rooms based on their inherent skills, however, the researchers sorted half of them based on their responses to a questionnaire about how much they liked working in a competitive environment versus working with others as a team. A person who selected “like competition” was teamed with other competitors.

Once the results were tabulated, Lakhani and Boudreau found a dramatic difference in the output from the rooms. Those sorted participants who liked competition performed twice as well on the test, putting in more hours and coming up with better results than the unsorted groups.

At the same time, the researchers inserted another wrinkle into the experiment: varying the amount of the prize participants would win from a high of $1,000 to a low of $0. The extra money did have an effect—but not nearly as much as the preference sorting. Among higher-skilled workers, the number of engineers who worked a minimum number of hours increased along with the prize purse, but those who were already working hard didn’t increase their number of hours; and lower-skilled workers didn’t work more at all.

The application of formal cash incentives worked in a different way than the sorting effect. The absolute effect of cash incentives was significantly greater for higher-skilled participants than for lower-skilled participants, consistent with high-skilled workers having a greater chance of winning cash prizes. In addition, the cash incentive acted most acutely by increasing the fraction of subjects who worked more than the minimum.

“Workers’ ability to fit into the regime of their choice accounts for a lot of the effort they put in and also the performance their performance,” concludes Lakhani. “The effect is as strong as paying them for their work.”

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