Is Money The Best Way To Inspire Creativity At Work?

Most organizations want better ideas, more creativity and ultimately more innovative cultures.  The challenges inherent in developing such a culture are legendary, and many a management guru has made their corn on helping organizations embark on that journey.

Whilst there are undoubtedly many environmental factors involved in creativity, a recent paper looked specifically at incentives.  Can people be incentivized to be creative?

Incentivizing creativity

The analysis reveals that non-tangible rewards such as social recognition doesn’t really work when there is a premium on being original.

“The general consensus in the research literature on creativity is that money hurts creativity,” the author says. “But most of that prior research was conducted with children as the test subjects, and the participants were not specifically told that the reward was for being creative. So what is it about the contingency of rewards that impacts creativity, and would adults respond to all types of creativity-contingent rewards the same way?”

The authors test their hypothesis across several experiments and found that monetary rewards can focus attention upon performance, whereas social-recognition type awards instead induce a ‘normative focus’.  In other words, monetary rewards can encourage more original thought, whereas social rewards can hurt that originality.

“We found that if you tell people to be creative and then give them monetary rewards, they will be more creative,” the authors say. “But wouldn’t the same be true of all rewards? If you tell people to be creative and then give them a social-recognition reward instead of money, then they’ll be just as creative as those you reward with money, right? We found no empirical evidence for that.”

It makes a degree of sense.  After all, social recognition is often about being seen a certain way by your peers, therefore it encourages acting in accordance with social norms.  Creativity, by contrast, requires you to stand out from your peers and think differently.

I’ve written a few times in recent times about the innate courage in the innovator. To innovate often requires the individual to stand alone, often against quite significant foes, in order to get their ideas and thoughts out there. It’s a tough job, especially as so many of our organizations are set up with efficiency in mind, so the status quo is very much what they’re looking to protect.

A financial reward can help to encourage people when faced with such emotional barriers.

“When you ask someone to be creative, you’re asking them to be transgressive, to think beyond social norms and thought processes that are not automatic,” the authors conclude. “That’s why a social-recognition reward kills creativity, because it makes creators more risk-averse. It appeals to conformity, to not standing out, which drives you to the middle, not the edge. It compels you to fall in line with social norms, and there’s less motivation to be creative.”