How can companies ensure their human capital is engaged and innovative?
Behavioral scientist Dan Ariely, who spoke Tuesday at Pensions & Investments' Future of Work — The Next Generation conference, said companies need to help employees thrive. He classifies motivation into two categories: intrinsic and extrinsic.
"We can't always understand what motivates people," said Mr. Ariely, co-founder of Irrational Capital and the James B. Duke Professor of Psychology and Behavioral Economics at Duke University. But he explained that intrinsic motivation means employees complete a task or activity because of the inherent satisfaction, rather than because of some separate outcome like money. In contrast, workers' extrinsic motivation is to attain an outcome, such as a paycheck.
COVID heightened the importance of human capital for companies, employers and organizations.
For example, "some kids actually learned more – not less – during COVID, because they followed their passions. And the importance of human capital will continue if we maintain a hybrid (working) environment, and intrinsic motivation will need to remain high."
Mr. Ariely gave the example of an IQ test given to sugar cane farmers in India – once before the harvest and once after. The results were higher after the harvest, he said, because "they're preoccupied beforehand, so they can't focus on IQ tests. That's what we call a 'scarcity mindset.'"
In a hybrid work environment, if workers are worried about layoffs or paycheck concerns, that presents a drain on resources.
"If employees are preoccupied it's a tax. We lose that person. So how do we get people to thrive?"
