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Incentives Demoralizes Professional Activity

Posted By Jim On 03/14/2009 @ 3:40 pm In Business | 9 Comments

“Excessive reliance on incentives demoralizes professional activity.”

That’s a quote from a TED.com [3] video I watched this week in which Barry Schwartz, Dorwin Cartwright Professor of Social Theory and social action at Swarthmore College and frequent contributor to the New York Times, calls for discusses how our society has gone mad with an abrupt loss of “practical wisdom” in the face of bureacracy, the failure of incentives, and rules often protect us from disaster but ensure mediocrity.

The whole video is worth watching but at around the twelfth minute, Barry Schwartz starts talking about the problem with incentives. A neighborhood was surveyed about the dangers of a toxic waste dump. When asked if they would agree to having a toxic waste dump located in their neighborhood, 50% agreed. They didn’t like the idea but they knew it had to go somewhere and they accepted that. When they another neighborhood was polled and given the incentive of six weeks of pay, only 25% agreed.

Why the difference? By adding the incentive of money (six weeks of pay), the decision stopped being about moral obligation (the dump has to go somewhere, here is as good as any other and we feel obligated to have it) and more about personal benefit and having a toxic waste dump is probably not worth six weeks of pay!

Talks Barry Schwartz: The real crisis? We stopped being wise:

If you have another twenty minutes after this video, I highly recommend watching The paradox of choice [4], another TED presentation in which he talks about the paradox of choice (how too many choices paralyzes us), the topic of his book by the same name.

(Photo: jesper [5])


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[3] TED.com: http://www.ted.com

[4] The paradox of choice: http://www.ted.com/index.php/talks/barry_schwartz_on_the_paradox_of_choice.html

[5] jesper: http://www.flickr.com/photos/jesper/267800531/sizes/s/

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