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Offering employees pizza or praise can be more effective than cash bonuses in increasing productivity, according to an experiment by Dan Ariely at an Intel factory in Israel. The group promised pizza saw a 6.7% increase in productivity, while the group promised compliments came second with a 6.6% increase. In contrast, the group offered cash only saw a 4.9% increase and a small cash bonus resulted in a 6.5% decrease in productivity for the entire week. Appreciation has a more lasting effect than money.
Do you feel unappreciated at work? Would a little extra money help? Dan Ariely thinks he’s come up with a better answer. In his book Payoff: The Hidden Logic That Shapes Our Motivations, Ariely says bosses should consider other ways to let employees know they’re doing a good job and that they’re appreciated. Ariely conducted an experiment at an Intel factory in Israel in which workers on a semiconductor assembly line were offered one of three different rewards for increasing daily productivity. One group was promised a 100 shekel (about $30 USD) bonus, another was offered a coupon for a free pizza, and a third group was told they would receive praise from the boss. Pizza turned out to be the main motivator, as productivity increased by 6.7 percent after the first day, compared with the output of a control group. The group that was promised compliments came in a very close second, with a 6.6% increase in productivity, while the group that received cash only had a 4.9% increase in productivity.
A slice of life on the assembly line:
At the end of the week-long experiment, the overall productivity gains in the pizza and compliments groups were slightly less than the energy output on the first day, but were still slightly higher than the work of the control group, which was not offered any incentives. .
After a full week, the least effective motivation for assembly line workers was still money. In fact, offering a small cash bonus resulted in a 6.5% decrease in productivity for the entire week.
Compared to the power of intrinsic motivation, the allure of money fades quickly, perhaps because people generally feel they deserve higher pay. On the other hand, a sense of appreciation has a more lasting effect in the workplace.
