INTRODUCTION

Harry F. Harlow (late 40s)

Studied primate learning behavior
Monkeys learned how to use puzzles without food or reinforcement
When given raisins as reward, monkeys made more errors and solved puzzles
less frequently
2 drives: biological drive, external drive: rewards/punishments
3rd drive performance of task provided intrinsic reward
Edward Deci (late 60s)
Two groups: experimental and control
Using soma puzzle cube, drawings of configurations, newspapers
Round 1: had to assemble soma pieces to fit drawings
Round 2: paid for assembling based on drawings
Round 3: assemble soma pieces (no comp-like 1st time)
Midway through made up excuse to leave, participants could do whatever
they wanted
Round 1 no difference between groups
Round 2, those paid way more involved with puzzles
Round 3, when not paid significantly less time w puzzles
Suggested that money as external reward, decreases intrinsic interest
CHAPTER 1- Rise and Fall of Motivation 2.0
Motivation 1.0=survival
Motivation 2.0=seek reward, avoid punishment, carrots & sticks, work is not inherently
enjoyable
Sometimes it works but very unreliable
Frederick Winslow Taylor
Scientific Management, all about efficiency
Reward good behavior, punish bad behavior
Douglas McGregor=argued that humans have higher drives
Motivation 2.1=recognition that EEs require more, dress codes relaxed, schedules more
flexible
Open source business model: volunteers, unpaid labor
Wikipedia, Firefox, Linux, Apache
Volunteers gain experience, reputation
Volunteers reached optimal challenge flow, fun of mastery
Rise of businesses with a purpose= purpose maximizers
Low Profit limited liability company L3C
Social Businesses: raise capital, develop products, sell in open market but do so
for social mission
For-benefit org: economically self-sustaining, driven by public purpose
B-Corporation: values long term social impact rather than short term $ gain
Daniel Kahneman
Won nobel prize, argued ppl dont bargain for wealth-maximization

Ex: when offered portion of $10, ppl dont accept 2 or below (ideas of fair play, revenge,
irritation override)
People are irrational
Jobs have become more complex, interesting, self-directed, heuristic tasks=experiment
with possibilities, derive solutions
Computers replacing simple intellectual labor
70% future growth of heuristic work (artistic, empathic, nonroutine)
Ex of satisfaction of work=Vocation vacations (ppl pay to try being a cook, run bike shop)
Millions telecommute everyday, beyond mgr sight
CHAPTER 2- Seven Reasons Carrots and Sticks (Often) Dont Work
Peoples baseline rewards must be satisfied (earning a living)
Beyond this baseline, carrots and sticks can have negative affect
Sawyer Effect: practices that turn play into work or turn work into play
Lepper, Greene, Nisbett
Studied children who spent free play drawing
Separated into:
Expected-award (asked if they wanted to draw for certificate with childs
name)
Unexpected award (just asked if they wanted to draw)
No award group (just asked if they wanted to draw)
Children in expected-award group drew way less, had turned play into work
Reward itself didnt have negative effect BUT contingent reward did
Testing extrinsic incentive effects on performance:
4 economists
Rural India
87 participants asked to play different games
Rewards:
Third earned small reward, third medium, third very large
Higher incentives led to WORSE performance
Candle problem
Participants given candle, box of tacks, matches
Told to attach candle to wall without dripping (must use box as platform for
candle)
Groups told 1) timing to see how long on avg 2) given incentive if in top
percentage
Incentivized group took LONGER
Clouded thinking, limited creativity
Art examples
Commissioned vs. Non-commissioned art
Commissioned works rated less creative but not different in technical
quality
Study of Art Institute students

Those with higher intrinsic vs. extrinsic motivation more successful in

career, produce superior quality
Blood Donation
First group voluntary (give blood but wouldnt receive payment)
Second group give blood and receive about $7
Third group give blood with payment but option to give to charity
Results: first group 50%, second group LESS, 3rd group similar
Tainted altruistic act
Goals imposed by others have negative side effects
Goal setting can encourage unethical behavior
Sears sales quota leads to overcharging customers
Fords release of unsafe Pinto due to rush to meet deadline
Day care in Israel imposed fee on parents for picking up children late
Increase in parents arriving late to 2x original
Shift from moral obligation to pure transaction
Principal-agency theory
principal=motivator
agent=motivatee
By offering reward, principal signals task is undesirable
No going back
Brain study-when ppl anticipated getting reward, surge of dopamine in brain, same place
as addiction
Rewards addictive qualities can distort decision-making
Rewards can lead to short term thinking
2008 financial crisis
In summary, 7 deadly flaws of carrots and sticks:
Extinguish intrinsic motivation
Diminish performance
Crush creativity
Crowd out good behavior
Encourage cheating, shortcuts, unethical behavior
Become addictive
Foster short-term thinking
CHAPTER 2A
Candle experiment revisited
When box of tacks emptied and money reward given, money group performed
better, race down obvious path
Extrinsic rewards good for routine tasks, mechanical tasks
Routine tasks:
Offer rationale for why task necessary
Acknowledge task is boring
Allow ppl to complete task in own way
Any extrinsic reward should be unexpected and offered only after task is complete

 Consider nontangible rewards (praise, positive feedback)

Provide useful info (specific feedback)
CHAPTER 3-Type I and Type X
Self-Determination Theory
Created by Deci and Ryan
Centered around universal human needs
Competence
Autonomy
Relatedness
When satisfied
Motivated
Productive
Happy
Focus on creating environments for innate psychological needs to flourish
Related to positive psychology: focused on well being and effective functioning
Type A personality: competition drive, aggressiveness, impatience, sense of time
urgency
Type B: may have drive but steady, confident and secure
McGregor argued work is as natural as play or rest, creativity across entire population,
under right conditions ppl will seek responsibility
Theory X: believe ppl must be forced to work
Theory Y: believe work is natural
Type X vs. Type I
Type X: main motivator extrinsic desires
Type I: main motivator intrinsic desires
Behavior is made, not born
Always outperform type X in long run
Do not disdain money or recognition
Renewable resource
Promotes greater physical and mental well being
Depends on: autonomy, mastery, purpose
CHAPTER 4-Autonomy
ROWE (Results only work environment): ppl dont have schedules, just have to get work
done, how/where/when up to them
Increase in productivity, decrease in stress
Autonomy is key component of self-determination theory
Autonomy is not going in alone, it is acting with choice
Study at Cornell found small bizes that granted autonomy grew at 4x rate of control firms
and had turnover
Suggests throwing out management and replace with self-direction

Atlassian=enterprise software company, encourages workers to spend a day working on

any problem they want once a quarter (many work through the night), often creates
products for company, vamped up to 20% of work time, FedEx Days
EEs should have autonomy over 4 Ts:
What people do (TASK)
3M (McKnight): hire good ppl and leave them alone, post-its came from
15% time projects
Google asks engineers to work on their own projects one day a week
(Google News, Gmail, Orkut, Google Translate
Georgetown University hospital gives nurses freedom to conduct research
projects, has led to changes in policy
When they do it (TIME)
Lawyers and billable hours, opposite of ROWE
ROWE: better relationships, more customer loyalty, more focus and
energy
How they do it (TECHNIQUE)
Call centers have 35% turnover rate, can make few decisions (scripts)
Zappos: one week of training, at end if they dont like it can take $2,000
and leave, those who stay get decent pay but total autonomy over calls,
serve customer well according to what they think, turnover is minimal
Homeshoring: Some ppl letting calls be taken at home like Jet Blue
(reduce commute, greater autonomy)
Whom they do it with (TEAM)
Whole Foods: candidate does 30 day trial, teammates vote whether to
hire person full time
Those working in self-organized teams happier than those in inherited
teams
Motivation 3.0 assumes ppl want to be accountable

CHAPTER 5- Mastery
Control leads to compliance, autonomy leads to engagement, only engagement can
produce mastery
mastery=desire to get better and better at something that matters
Gallup poll shows 50% of EEs not engaged at work, 20% are actively disengaged
Csikszentmihalyi: WWII survivor, studied creativity and play
Autotelic experiences (FLOW): often occur during play, activity is its own reward
Experience sampling method: page ppl 8x a day at random times (ppl would
record what they were doing, who with, and how theyd describe state of mind)
flow=highest, most satisfying experiences, goals are clear, feedback is
immediate, challenge isnt too difficult or too easy
Ericsson: Swedish telecom company
Creates flow environment
Clear objectives

Quick feedback
Meet with mgr 6x a year (90 min)
Scientists found desire for intellectual challenge, best predictor of productivity
Jenova Chan and flOw
Video game that delivers flow experiences
Goldilocks tasks=challenges that are not too hard or easy
Turn work into play (new, more meaningful challenges)
Three Laws of Mastery
Mastery is a mindset
Dweck: what ppl believe(self-theories), affects what they achieve
Entity theory: intelligence is finite, cannot increase
Effort seen as bad
Helpless
Incremental theory: intelligence can increase
Effort is good
Mastery-oriented
Performance goals vs. learning goals
Students with learning goals scored higher on new
challenges
Mastery is a pain
Cadet basic training, 7 weeks
Grit predicted who would stay
Mastery is an asymptote
You can get close to mastery but never touch it
Csikszentmihalyi
Instructed subjects to get rid of play, all things noninstrumental
Headaches, difficulty concentrating, sleepy or problems sleeping
Ppl more likely to find flow at work than leisure

CHAPTER 6-Purpose
Purpose provides a context for autonomy and mastery
Most deeply motivated ppl driven by cause larger than themselves
Sharp rise in volunteerism
Motivation 3.0=equal emphasis on profit and purpose maximization
Goals
TOMS as for-profit company with giving mission
Goal is to pursue purpose, use profit as catalyst not objective
Words
MBA Oath at Harvard
Motivation 2.0=efficiency, advantage, value
Motivation 3.0=greater good, purpose, sustainable
Policies
Policies lead to ppl checking off boxes rather than pursuing purpose

Spending money on other ppl or cause can increase subjective well being
Offer opportunity for EEs to donate sums
Mayo Clinic: let doctors spend one day a week on aspect of job that is most
meaningful, reduces burnout
Deci, Ryan, and Niemier
Study of U of Rochester students after graduation
Those with profit goals vs. purpose goals
After 1-2 yrs, purpose goals better subjective well being, those who reached
profit goals no happier and more anxious, depressed, etc.

TYPE I TOOLKIT
Type I for Individuals
Flow Test
Get paged several random points
Record what youre doing, how youre feeling, if in flow
Look for patterns. How could you restructure day? What are intrinsic
motivators?
Whats your sentence? (purpose)
Ask a small question: were you better today than yesterday?
Take a Sagmeister (sabbatical)
Give yourself a performance review
Set both big and small goals
Think about how work relates to your purpose
Be brutally honest
Oblique Cards
Designed to help when stuck What would your closest friend do?
Deliberative Practice
Must improve performance (cant do the same thing every time)
Repeat, repeat, repeat
Seek constant, critical feedback
Focus ruthlessly on where you need help
Prepare for the process to be mentally and physically exhausting
Webbers Card
On one side write What gets you up in the morning
Other what keeps you up at night
Use answers as compass
Create your own motivational poster
Type I for Organizations
20% time to work on creative projects
Encourage Peer to Peer awards
Kimley-Horn and Associates, at any point EEs can award $50 bonus to
colleagues
Autonomy Audit

Tasks, time, team, technique

Relinquish Control
Involve ppl in goal setting
Use noncontrolling language
Hold office hours
Ask everyone to answer What is companys purpose? on card, read aloud
Reichs Pronoun Test
Do EEs refer to company as they or we
Promote Goldilocks for Groups
Begin with diverse team
Make team no competition zone
Task-shifting (dont have ppl do what they always do)
Animate with purpose; dont motivate with rewards
Create FedEx Days
Whole day for EEs to work on anything, but must deliver something next
day
Zen of Compensation:
Get compensation right and then get it out of sight
Ensure internal and external fairness
Pay more than average (attract better talent, reduce turnover, boost productivity
and morale)
If you use performance metrics, make them wide ranging, relevant, and hard to
game (make them varied: sales this year, customer satisfaction, new ideas all
together) s