There are several ways in which people are motivated to work
harder, be better employees or citizens and make better decisions, which is
through incentives. The first type of
incentives one would think of is money. While money can be a powerful motivator,
money is not entirely effective as people crave for more than that.
“Money never made a man happy yet, nor will it. The more a
man has, the more he wants. Instead of filling a vacuum, it makes one.” –
Benjamin Franklin
In order to fill the vacuum people are not only motivated by
money. Yes, money is a necessity and we work to pay our bills; we are also
motivated for other reasons.
We are motivated by fulfillment of our work, social rewards,
social approval and respect. Some might be driven by moral incentives such as
doing good by working for a not for profit organisation or an NGO.
In behavioural economy these incentives are categorized
in either intrinsic or extrinsic motivations.
Extrinsic motivations are motivations that are triggered
from the outside. Our actions are driven from the outside, by other people. I
decide to work hard this year in order to get a pay rise or a bonus. This
action is driven by the rewards system of my company. I might also be motivated
to work hard in order to become the best salesperson of the year. Recognition
and social rewards are also extrinsic motivators.
Intrinsic motivations are our attitudes, and internal goals
that are not driven by our attitude towards money or recognition. Think of the
humble hero who does not give a fuss about being celebrated as a hero, that
person is simply doing it out of their own internal goals.
It could be that sense or need of doing good and helping.
Think about all the volunteer firefighters in Australia right now who are
battling uncontained fires in very dangerous conditions. They are not doing it
because they want to be celebrated as heroes, they are doing it because they
have the urge to help. It is their sense of duty or their professional pride.
Extrinsic and intrinsic motivations are not independent of
each other, in fact intrinsic motivations can make extrinsic motivations
insignificant and the other way around. Here are 2 interesting examples:
Experiments have shown that people who were asked to compete
a quick market survey, those who were not given a monetary reward put more
effort into the survey than those who were given a small monetary reward. Those
who were paid for the task did not enjoy it as much as they were more concerned
about how small the reward was for their efforts.
The authors of Freakonomics did an
experiment at a childcare centre in Israel. The centre closed at 4 pm and by
then most parents had picked up their children, apart from a few who arrived
later, some not until 4.30pm. The parents relied on a childcare worker’s
generosity to stay behind in their own time.
To make parents pick their children up on time they
introduced a penalty fee. The results achieved the opposite, more parents
arrived late. It has been suggested that the fine was not interpreted as a
deterrent it was interpreted as a price.
Instead of having to apologize to the childcare worker for
their time to stay back and feeling guilty, it has now become the norm to come
later as there is a price attached to it. Before the fine was introduced most
parents were intrinsically motivated to be on time; once the fine was
introduced the intrinsic motivator got replaced by the extrinsic motivator as
the parent can now pay for being late.
In negotiation it is important to understand the motivations
of the other party. Why are they talking to you and what is in it for them? Are
they purely motivated by money or are there other motivations that you can use
to your advantage?
Imagine you are negotiating with a supplier and that person
has only just recently started with the company. What would their motivations
be? Maybe the person wants to make their mark, show their boss what they can do
and that they can save money for the business; in this case getting the best possible
deal in terms of getting the most money for the company could be the objective.
It is vital to understand the motivations of the other
party. What can you offer that satisfies the extrinsic or intrinsic motivations
of the other party? If you are working for an NGO and are looking for a
corporate partnership understand why they are talking to you. Have they been in
trouble recently and need to mend their reputation? Is it a business whereby
the CEO feels the need to partner with an NGO in order to fulfill his or her
passion for helping children in need or helping the environment?
This is vital information that will have an impact on the
negotiation outcome. It is necessary to ask the right questions to really
understand the motivations of the other party so you can devise strategies that
will get the deal over the line.
#negotiationskills #negotiationtraining #influencing
Comments
Post a Comment