In traditional economics, motivation is simple: People want stuff. The amount of stuff they want is unlimited, therefore if you want people to do something you give them more stuff, and they will do it for you. Threaten to take away stuff, and they will avoid doing whatever would cause their stuff to be taken away.
The emerging field of behavioral economics takes a more holistic (and realistic) understanding of motivation: Sometimes people don’t want stuff. Sometimes people do things that don’t help them get more stuff. And there are some things you can’t convince people to do no matter how much stuff you give them.
This is critically important to the sudden popularity of gamification. Gamification is a way of creating incentives. But many people have attempted to create incentives based on the assumption that the only two motivators are pain and gain. This approach seems to assume that human beings operate like machines: give us a directive and reasons to follow the directive, and we will.
This thinking is what caused behaviorists to discover the overjustification effect, which is dangerous can be permanently damaging. Dubner and Levitt give a perfect example in Freakonomics of an Israeli day care facility that wanted to discourage parents from arriving late to pick up their children and started charging for late pick-up. The result was that more parents arrived late. The fee for late pick-up had supplanted an intrinsic motivation (guilt over inconveniencing the day-care workers) with an extrinsic motivation (a small fee to compensate for that inconvenience). What’s more, when the fee was subsequently removed, the damage had been done: parents continued to see the late pick-up as a service, but now it was a service they were getting for free.
Businesses often take a similar simple-economics approach to dealing with their own people. Incentivize this, disincentivize that, counter-incentivize something that you’re making more difficult. Much of the bulk and complexity of large organizations can be traced back to complicated incentives and metrics.
So before you do anything, remove the obstacles.
It’s impossible to know whether sufficient intrinsic motivations are there if you’ve piled up a mountain of paperwork in front of them. Sometimes the barriers exist outside your organization, such as the ability to market a new service. If you want a particular activity to occur more often within your organization, start by identifying and removing the obstacles, and then step back. Adding incentives is dangerous and difficult to reverse, and can result in unexpected and undesirable behaviors. If you create a space for something to happen, and your people are aware that space exists, wait and see what comes to fill in that space.