The Record of the 80s and 90s

Evolution

The 1980s and 1990s have brought about an increasing stress on getting ahead. The way to motivate people to do this has been done largely through financial incentives. Companies are striving to align pay as closely as possible to output. In other words, to implement performance-related pay. The problem with this lies in that it is extremely difficult to monitor and determine output in a good amount of jobs, especially those involving teammwork. In such a case people must be evaluated based on relative performance compared to their peers. This increases stress placed on one's rank within a company and ultimately society.

Related to this, economists and politicians have assumed that when external motives for performance are increased, other motives stay the same. Studies have shown, however, that this is not the case. Edward Deci experimented on this by giving puzzles to two groups of students. One group was paid for each correct solution and the other was not. When the alloted time was up, the groups were allowed to continue working. The unpaid group continued to work because of their intrinsic interest in the puzzle. The paid group lost internal motivation due to the increased external motivation (being paid) and did not continue working on the puzzles.

Another of example this occured in a real life case in Switzerland in 1993. Two communities had been selected as potential sites for storing radioactive waste. Economist Bruno Frey surveyed those living in the affected areas. The first question they were asked was, "Would you be willing to have the repository here?" In response to this, 51% said "yes". The second question was, "If you were offered a certain amount of compensation (specified), would you be willing to have the repository here?" Only 25% responded with "yes" to this question. This case shows how financial rewards reduced people's willingness to act on the merits of this case. People likely assumed that if they were going to get paid to have the repository here, it must be something that no one else wants to deal with and the government has resorted to paying people in order to entice them toward agreeing to have the repository.