Motivation, Bonuses and Open Source

Let’s start with a few quick observations on money and motivation.

  1. Bonuses can be an easy and expensive way to demotivate staff just as to motivate them.
  2. Experiments consistently show that financial motivation can actually reduce performance particularly on tasks that require thinking … like programming.
  3. If money were the sole motivator then open source would not have transformed the world and society would lose the massive contributions made by other volunteers.
  4. But equally … unfair rewards and low salaries can switch off the mind of your team.

So why do many organizations persist with financial bonuses as their core incentive?  What’s the right balance of rewards?

The surprising truth about motivation

Dan Pink has done some entertaining, enlightening videos around the topic of motivation. I found this one easily worth ten minutes of my life.  Thank you to Dmitri for suggesting it.

He makes the point that research by psychologists and economists demonstrates consistently that financial incentives can be effective in improving performance for physical, mechanical and procedural tasks.  However, for thinking tasks increasing financial incentives actually reduces performance.  This applies for tasks that require only basic cognitive engagement … and programming easily fits the definition of a creative cognitive task.

Yet, organizational management consistently ignores these basic findings.

As an example, in his TED talk he cites the example of something called the “Candlestick Problem”.  It requires a little lateral thinking to solve.  Participants who were told they could receive a cash prize for a quick solution actually performed more slowly than others given no financial motivation.

Dan submits three factors that motivate better performance and personal satisfaction:

  • Autonomy.  The desire to be self-directed.
  • Mastery. The urge to get better at stuff.
  • Purpose. Why does my effort matter?

I reckon this is a great list to consider when reflecting on our personal motivations as programmers and those of colleagues.  For managers, it’s a good place to start when setting incentives and motivating the team.

To the list I submit an important addition: fairness.


Rewards are finite and fairness is about appropriate distribution of those finite rewards, sometimes called Distributive Justice.

Fairness is a point of view.  For my children, fairness means “getting exactly the same size piece of cake as my brother/sister”.  To them the absence of any bias means fairness.  A more adult definition is about distribution being appropriate to “relative merit of significance” which means treating individuals according to their individual needs or value.  Staff don’t all get the same salary, the same bonus, the same number of shares or options, the same work, or the same peer recognition.

Managing for fairness AND the perception of fairness is tough but critical.  Managers are taught to structure incentives to align interests of staff with the interests of the organization.  Alas, as the incentives grow so does self-interest creating opportunity for individual interests to diverge from those of the manager or the organization. This amplifies disagreements and perversely can undermine the original intent of the incentives.

Management Cliches

The perverse effects of financial incentives should only be surprising for people who believe the corporate wisdom on incentives and measuring performance.  Here are some management cliches…

  • what gets measured is what gets done
  • if you can’t measure it, you can neither manage it nor improve it
  • if you don’t measure results, you can’t tell success from failure and thus you can’t claim or reward success or avoid unintentionally rewarding failure

The corollary applies to incentives:

  • if an incentive can’t be measured it won’t be valued
  • money is easy to measure and so will be valued
  • peer recognition and other “soft” rewards can’t be measured and won’t be effective

I am not proposing there is no truth to these management cliches.  My point is that they aren’t the whole picture.  The emotional dimensions of motivation and staff satisfaction matter but can’t be captured in Excel.

Sure, money may be a great motivator for many people. But even for salespeople, the stereotypical money-driven group, money is an important, but not dominant, driver.  For this group, motivators are diverse and include “opportunities to use talents, work creatively, obtain status, interact with people, be self-managed, progress into management, freedom from routine, and opportunities to be of service to others”. [e.g.]

For programmers, the sheer size and impact of the open source movement demonstrates the importance of non-financial motivations to many programmers.  This applies equally to volunteer communities across society: in social work, sports clubs, environmental groups, politics and so many other domains.

I have had the edifying experience of creating both effective and counter-productive incentives for teams I have lead.  My experience is that cash it is not usually the top incentive for most programmers … so long as they are being rewarded fairly.

I’ve received heaps of input from programmers on what incentives there should and shouldn’t be.  From that my observation is that there’s no ideal and individuals have widely divergent views, sometimes even quite self-contradictory.

Intrinsic vs. Extrinsic Motivators

As I explored this topic for this blog I found the binary distinction between intrinsic and extrinsic motivators particularly helpful, especially after reading about how they interact.

Intrinsic motivation is that which is driven by an interest or enjoyment in the task itself.  It exists within the individual where the performance of the activity is an end in its own right.  For programmers it can be the joy of programming, the challenge of the task, the satisfaction of success, or the excitement of a new idea.

Extrinsic motivation comes from outside of the individual when the performance of the activity is a means to achieve some other outcome. Extrinsic motivations can be rewards like salary, bonus, shares/options, recognition at a company meeting, prizes, or feedback from users. Competition is an extrinsic motivator based on the desire to beat others.

Motivators aren’t all positive.  Fear of failure can be a strong intrinsic motivator.  Similarly, extrinsic motivations include threats of punishment, loss of benefits, being assigned bad tasks and so on.

Studies of children and adults alike show that too often the influence of extrinsic motivations has the unintended consequence of reducing intrinsic motivation.  As we discussed above, money can take the joy out of work.  But so can many other kinds of extrinsic motivators put in place for a team or a company.  For example. artificial team building; prizes that are never awarded to the quiet achiever who always works hard but never draws attention to themselves; or any of hundreds of well-intentioned motivational schemes.

The lesson for extrinsic motivations is to seek those that fit with the beliefs of the individuals and to avoid overtly manipulative incentives.

Grand Unified Theory of Motivation?

There is none!

We know motivation is important.  Motivated programmers will look for better ways to do their job.  Programmers are far more productive when they are motivated.  Programming requires intrinsic motivation.  Extrinsic motivators can make a positive difference but tread carefully.

Andrew H – Psygrammer


2 Comments on “Motivation, Bonuses and Open Source”

  1. Peter Nann says:

    Hello Andrew.
    Was just browsing on LinkedIn and found my way here…

    Was wondering what you were up to. Blogging!
    Over speech?

    Yes, I saw that Video on motivators some weeks ago and it is very fascinating.

    If only more folks were open to understanding the ‘against the grain’ concepts in there.

    Anyway, hope you are well.


  2. Mike Pace says:

    that is interesting.I know that some nurses,teachers etc,do not give their best and only do it for the remuneration.I have observed this when I was in hospital,especially here in Australia.We learn a trade with remuneration in mind.It has been instilled in us from when young.i have a personal experience about this.Service for the love of service to your fellow beings is rare indeed.Except for volunteers.

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