Produced by the wonderful folks at the RSA

Dan Pink speaking at this year’s TED Global in Oxford.

He takes us through a wealth of evidence – built up over four decades – which demonstrates that financial incentives tend to focus the mind and as such only tend to be productive on left-brain tasks, i.e. “problems with a clear set of rules and a single solution.”

In contrast, when financial incentives are offered to people to solve more right-brain tasks – those that are more conceptual in nature and require greater use of cognitive power – the incentives actually make the problem harder to solve because they narrow the focus when the solution tends to be on the periphery and so the solver needs to be thinking more holistically and laterally.

The issue, says Pink, is that we’ve known about these flawed links between problem-solving and financial incentives for decades, and yet despite that they endure. And more and more of the work we do is shifting to right-brain thinking as we delegate the routine, rule-based stuff to computers and outsourcing agents.

The solution: offer incentives based on intrinsic motivators. Specifically, autonomy (e.g. Google’s 20% time), mastery, and purpose.