Are You Willing to Pay More for Products Someone Loved Creating?

Writing for Kellogg Insight, Dylan Walsh reports this month on some fascinating new research by Jake Teeny, Anna Paley, Robert Smith, and Daniel Zane. Teeny and his colleagues examined the relationship between willingness-to-pay and the level of enjoyment a seller derives from creating a product. Walsh summarizes the findings:

As a whole, the studies showed that buyers actually associated production enjoyment with greater product quality and value, consequently increasing how much they were willing to pay for it. And yet sellers often charged less for the products and services that they enjoy providing, even though they also believed them to be of higher quality.

The scholars argue that potential buyers seem willing to pay more for products when they believe that sellers have experienced high levels of intrinsic motivation while creating the products.  In other words, if the seller valued the process of creating the product as much, if not more, than the good itself, then buyers seem willing to pay a higher price for the product.  On the other hand, they argue that sellers price the product with their own enjoyment in mind.  If you are performing an unenjoyable task, you might charge more for a particular service.  If you are doing something very enjoyable, you may perceive some of your "compensation" has come in the form of that satisfaction and pride.  As a result, you may not expect as high of a price for the product from the buyers.  

What does this mean for sellers?  Think carefully about showing your customer how much effort and passion has gone into the creation of a good or service.  You might just command a higher price as a result.  And sellers... not shortchange yourself when placing a value on something you loved creating. 

Does this research have lessons for employees in larger organizations? Perhaps it does.  Do we demand less monetary compensation if we truly love our job?  Are we shortchanging ourselves in these situations?  

How Do You Enhance Instrinsic Motivation?

Jane Porter has written an article this week for Fast Company on the topic of intrinsic motivation.  Porter writes:

It's easy to hustle through our daily tasks, head down, focused on what's next on the long list of to-dos. But taking a step back to evaluate what really motivates and drives us is critical, not just for our well-being, but also, as research has shown, for our productivity.  Social psychologists call this type of drive "intrinsic motivation," or the desire and urge inside ourselves that propels us to do the work we do and do it well. While we're often motivated by external factors like pay, approval, or recognition, research has shown that intrinsic motivation is fundamental not just for our long-term happiness, but also for the quality of our work.

How can organizations enhance the intrinsic motivation of their employees?   I would urge managers to consider the lessons imparted by social psychologist J. Richard Hackman in his work on job design many years ago.  Hackman argues that five elements of job design have a strong impact on the intrinsic motivation of workers:  skill variety, whole task, task significance, autonomy, and clear and immediate feedback.   By skill variety, Hackman means that employees should not be performing the same monotonous task all day. They should able to use a range of their capabilities.   Whole task means that we cannot get carried away with the division of labor.  We should enable workers to be part of completing more than one minor step in a more complex task.  Third, workers need to understand the importance of their work.  What does it mean for the organization?  Sometimes we refer to this as establishing a line of sight.  Can workers see how what they are doing has impact throughout the firm, all the way to the customer?  Fourth, workers will be more intrinsically motivated if they have some autonomy in terms of how they do their work. Finally, employees need clear, constructive, and immediate feedback.  They need to know where they stand.   If you design the work in this way, you are likely to have workers who are more intrinsically motivated, and therefore, more engaged, satisfied, and productive. 

Does Busywork Actually Make Us Happier?

Rachel Emma Silverman of the Wall Street Journal reported this week on a new study by University of California-Irvine's Gloria Mark and co-authors from Microsoft Research.   Mark and her colleagues tracked 32 workers at Microsoft for more than 1,500 hours.  They found that people's moods brightened when they performed busywork (i.e. rote activities), and they were less happy when they tackled challenging tasks.   The article quotes Mark:  “Focus involves a kind of stress and people aren’t generally happy when they are stressed,” says Dr. Mark. By contrast, “rote work is effortless, so you can get gratification for getting things done.”

What do I make of these findings?  I think we have to take them with a large grain of salt.  Years of research on intrinsic motivation shows that people value work in which:

• they have autonomy
• they feel that they are making a contribution to a greater goal
• they find challenging and rewarding
• there is some variety in the tasks being performed over time

What accounts for the difference in the findings?  Well, if you evaluate people in the moment, I think you get different answers.  In other words, the Microsoft study appears to examine people who are performing challenging work, and then from time to time, they perform some busywork.   Of course, the busywork may be a great relief, a nice break from their tough duties.  However, that's not the same as saying busywork is always mood brightening.  If all you did was rote work, you might not be so happy.   So, busywork can lighten the mood, but perhaps only when it comes in small doses amidst a stream of work that has the characteristics I listed above in bullet points.

Motivation: Daniel Pink