Salz Review - Wall Street Journal

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Salz Review
An Independent Review of Barclays’ Business Practices
as a psychological state experienced by employees in relation to their work. In their report,
they describe an engaged employee as someone who thinks hard about their work, feels
positive when they do a good job, and discusses work-related matters with those around
them. Engagement therefore has intellectual, emotional, social and behavioural dimensions.
Having a voice at work and exercising that voice points to a natural human need to be able
to be in control of our own destiny. Intrinsic motivation for work comes from this. 290
Exercising individual and – where necessary – collective voice is important in escalating
issues of concerns about leaders and cultural norms that abuse the moral compass of the
organisation. It is also important in selecting leaders who demonstrate the qualities of
humility, care, and respect for others over those of self-interest and status building. In their
book Selected 291 Vugt and Ahuja describe employee voice as one of the key STOPS
(Strategies To Overcome the Powerful) for keeping over-bearing leaders in check.
Functioning organisations need employees, not just those in leadership positions, to have
and to exercise voice. Organisations in which the employee voice is silent have much to be
concerned about. Silence signifies disengagement or, worse still, fear of becoming engaged.
The Role of Pay and Reward
Pay for performance has been around for a long time and it has become a truism in the
business world that pay should be structured to encourage people to perform. However,
there is a paradox in this in that there is over sixty years of academic research which
highlights that extrinsic motivation (encouraging people to do something for a reward) is
not as effective at improving performance as intrinsic motivation (a form of fulfilment
people get from doing work). Put simply, there is a mismatch between what science knows
and what business does.
There is a body of evidence which shows that extrinsic rewards, like bonus payments or
contingent pay, dulls creativity, narrows focus and slows our capability to solve problems.
Deci’s famous ‘Soma Cube Experiment’ 292 required groups of people to work together to
complete complex puzzles, some for reward others not. Deci played with multiple
configurations of reward and multiple configurations of group. In each, the result is the
same. The rewarded group consistently produced fewer solutions, were less engaged in the
task, and were less socially engaged with their colleagues. The results are completely
counter-intuitive. The conclusion is that when people are motivated intrinsically, they
perform better and more consistently than when motivated extrinsically.
Deci’s work has been supported by multiple other studies. In fact it seems that a new study
is now published almost weekly. Most of these studies highlight that pay does not come
top of the list of elements which encourage motivation and engagement at work. Feeling
valued, having the opportunity to do interesting stimulating work, and opportunities for
advancement supersede pay. Extrinsic rewards motivate for a short time, a bit like caffeine
does, before the effect wears off. Extrinsic rewards are good for motivating people to do
simple, rule based tasks for a short period of time, primarily because they narrow one’s
focus on to the immediate and the obvious.
290 Richard Ryan and Edward Deci, Self-Determination Theory, 1970.
291 Mark Vugt and Anjana Ahuja, Why some people lead, why others follow and why it matters, selected, 2010.
292 Edward L. Deci, The effects of Contingent and Non-contingent Rewards and Controls on Intrinsic Motivation, 1972.