4 Secrets to Keeping Your Employees Motivated, According to a Duke Behavioral Economist

4 Secrets to Keeping Your Employees Motivated

Dan Ariely, the famous Duke behavioral economist and author of multiple New York Times Bestsellers, such as “Predictably Irrational,” just released a short, new book on motivation, “Payoff: The Hidden Logic That Shapes Our Motivations.”

Here are some of the top lessons from the book that you need to know:


According to Dan, one of the key drivers to motivation is a sense of meaning in what we do: If we feel like we’re toiling away on a never-ending treadmill, we quickly become actively disengaged from our jobs. We want to feel like what we’re doing is important and has an impact. If we can see the impact of our project, and see it in use by the key stakeholders, even better.


There’s a magic in human connection, especially between a boss and a subordinate. One of the fastest ways to make sure someone loses motivation is by ignoring their work. As Ariely writes, “…if you really want to demotivate people, “shredding” their work is the way to go, but that you can get almost all the way there simply by ignoring their efforts.” Conversely, one of the fastest ways to motivate someone is by acknowledging what they’ve done. However, in the faceless bureaucracy that characterizes so many organizations, acknowledgement is virtually nonexistent. Make sure that you create a culture of appreciation and that you, as a leader, reach out and show that you see what your employees are doing; and that you appreciate it.

Ownership is key

We humans take delight in producing something tangible and real. We want to see our tasks come to a point of completion. If you get rid of this, you can quickly destroy motivation. Canceling a project that a team has been working on without working hard to acknowledge their efforts (or even showing them how their efforts have sparked a new project, or are being folded into a new project) is motivational kryptonite. This is especially true given the fact that the more effort we put into a project or creation, the more attached to it we become; and the more we’ll value it. This is called the IKEA effect.

Are monetary rewards are a doubled edged sword?

Finally, Ariely points out how monetary rewards can actually diminish motivation and performance. Don’t assume that any incentive is a good incentive. The world of motivation is tricky. In an experiment that Ariely covers in the book, he shows that a monetary incentive increases performance on the day it’s promised, but causes motivation and performance to crash the rest of the week–until the next week, when the bonus is offered again. The same study, however, also tested out a number of different reward schemes, including a compliment from one’s boss and a pizza voucher. How do you think these rewards compared to the monetary reward? Read the following passage to find out:

“…we indeed found that the cash, pizza, and a compliment all did better than the control condition. All three approaches increased motivation to a similar degree. But here was the surprise: the pizza voucher boosted productivity by 6.7 percent, almost identical to the 6.6 percent boost from the verbal reward. Of the three incentives, cash performed the worst, coming in slightly behind at 4.9 percent. The results from the first day of the work cycle were clear. Any incentive is better than no incentive, and the types of incentives we used (money, pizza, and a compliment) weren’t very different from one another. But this analysis focused only on the first day of the work cycle. What about the next three days of the work cycle? Would there be a residual effect of the bonus on performance?

This is where things got more interesting. On the second day of the work cycle, those in the money condition performed 13.2 percent worse than those in the control condition. It was as if they were saying to themselves, “Yesterday they paid me a bit extra, so I worked harder. But today they aren’t offering me anything special, so I don’t care.” On the third day, the news was slightly less bleak; those in the money condition dropped their performance by only 6.2 percent relative to the control condition. By the fourth day, productivity had drifted back toward the baseline, with only a small decrease compared with the control condition (2.9 percent). Overall for the week, the monetary bonus condition resulted in a higher pay (the bonus) and a 6.5 percent drop in performance compared with no incentive at all.”

What about the compliment and pizza conditions? As we mentioned earlier, performance in the compliment condition rose 6.6 percent on the first day of the work cycle. From there, it slowly drifted down toward the control condition over the next three days. And the pizza condition? It fell somewhere in the middle between the monetary bonus condition and the compliment condition. I suspect that if we offered a real pizza with a crispy crust and the smell of baked dough and melted cheese, we would have seen an effect similar to that of the compliment condition (perhaps with an even higher performance). And if a representative from Intel were to deliver the pizza personally, the employees would have probably been extra delighted. On the other hand, if Intel framed the pizza voucher in a more transactional way (for example, by mentioning its cost), its motivational power would have been more like the monetary bonus condition.

One important lesson from our experiments at Intel is that different types of motivations don’t add up in a simple way. In particular, adding money to the equation can backfire and make people less driven.”

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