In this heleo conversation Barry Swartz shares an important lesson he learned the hard way about the importance of grades at college and what happens in the absence of grade variation. In effect, and unfortunately, grades have become the ‘why’ of learning.
The moral risk with traditional incentive structures is that inevitably people find ways to meet the incentives without fully doing the work required.This idea was well captured by Steven Kerr in his updated 1995 paper entitled: “On the Folly of Rewarding A while Hoping for B.” (the original dates back more than 40 years.)
Good example of this is the fiasco at Wells Fargo, summarized here by Swartz: On Wells Fargo and Incentives: When Will They Ever Learn?
Swartz further refers to his book Why We Work and suggests that people want to do good things in the world, but as leaders we have to create workplaces that facilitate such behavior. The issue with this, as Adam Grant appropriately raises, is that when it comes to financial incentives, it is very hard to get the right dose – i.e. this is the right amount of meaningful work, or choices in order to give people the autonomy that they desire.