Psychologist Dan Ariely describes a conversation he had with a manager at a large bank, a man in charge of handing out millions of dollars in bonuses each year to top employees. “So, how do you do it?” Ariely asked. “Do you shake their hand? Take them out for a beer? Say ‘Thank you for your hard work?’” “No,” the manager replied. “We just write them a check.”
Understanding human motivation is difficult even for psychologists, so it’s no wonder that it’s an area in which the management of many businesses falls short. But we do know a few key things about what drives people to do their best, and how to become a better manager.
What You'll Learn
How to address irrationality in decision-making
How to overcome procrastination
How to set goals to motivate yourself and others
Strategies for time management
1. Embrace Irrational You
Behavioral economists see humanity as a giant irrational mass. Yet that doesn’t mean they’re innate pessimists. Rather, they see a giant blank canvas on which masterpieces can be built. In this lesson, Duke University professor (and bona fide cool guy psychologist) Dan Ariely teaches an important lesson about perspective: The key to being and doing better is understanding our nature so that we can embrace the aspects that lead to desirable outcomes and counter the tendencies that lead to undesirable outcomes.In the case of decision-making, that means getting to the bottom of what drives our decisions. By the end of this lesson, you’ll be aware of two irrational tendencies that you’ll need to address to make better decisions in your personal and professional life.Acknowledge irrational tendenciesYou are more passive in your decision-making than you may think. The way a choice is presented drives what you choose.Humans are storytellers. We create stories after the fact that frame ...
2. Foster Employee Motivation
In this lesson, organizational psychologist Dan Ariely explores Zappos’ unusual policy of offering potential hires $3000 not to take the job. Ariely says this is smart psychology and money well spent because it weeds out candidates who are in it for the paycheck and invigorates the rest with a sense of purpose. In this video, he explains why the underlying tenets of the Zappos hiring plan work and how this ultimately impacts customer service:Uncover genuine dedication.Promote cognitive dissonan...
3. Keep Your People Honest
Among the many things behavioral psychology can tell us about creating a successful company culture, its insights into honesty are especially valuable. With the exception of psychopaths (who tend to be dishonest by nature), it turns out that most of us are capable of dishonesty under the right circumstances. Environment and culture play an enormous role in our ethical behavior. Here, Dan Ariely examines the incredibly thorny question of how to create an ethical company culture.Almost everybody h...
4. Self-assess for Procrastination
One of the many fascinating ways in which we humans are irrational and self-defeating is something psychologists call “structured procrastination.” In putting together a daily to-do list, we tend to focus on little things that seem urgent—clearing out our inbox, adding another meeting to the calendar—neglecting bigger, more important goals. It’s structured procrastination because we’re avoiding what’s really important because it’s more challenging and complex, and filling our time with things we can easily cross off the list, giving ourselves a sense of achievement without really having achieved anything.Are you optimizing short-term activity over long-term activity?Are you giving priority to tasks that seem urgent but which distract you from more important goals?SolutionsRegular scheduling of your prioritiesSaying “no” to non-priorities
5. Understand What Drives People
Psychologist Dan Ariely describes a conversation he had with a manager at a large bank, a man in charge of handing out millions of dollars in bonuses each year to top employees. “So, how do you do it?” Ariely asked. “Do you shake their hand? Take them out for a beer? Say ‘Thank you for your hard work?’” “No,” the manager replied. “We just write them a check.”Understanding human motivation is difficult even for psychologists, so it’s no wonder that it’s an area in which the management of many businesses falls short. But we do know a few key things about what drives people to do their best.People get a great deal of enjoyment from conquering difficult things.Key MotivatorsChallengeMeaning or PurposeAccomplishmentCompetitionAutonomyAppreciation
6. Use Goal Setting to Increase Motivation
As much as we’d like to think otherwise, we humans are irrational by nature. Behavioral economist Dan Ariely has based his career on finding smart ways to work with predictable irrationality, making it easier for people to achieve their goals. In this lesson, he focuses on how to set both aspirational and incremental goals to keep your team motivated and on track.Create achievable targetsSet aspirational goals as guideposts, but avoid attaching rewards to long shots.People are demotivated by unattainable goals.Reward your talent for making progress toward incremental goals.Provide structureIf you intend to make a goal a reality, schedule the incremental steps toward achieving that goal in your team’s calendar.By formally committing your team’s time, you help your direct reports habitualize behaviors that support the team’s goal.The idea is to help your team internalize the decision rules that will get you closer to achieving your shared goal.
7. Acknowledge the Opportunity Cost of Time
Why do humans struggle with the concept of time management? Dan Ariely, a psychologist and behavioral economist, argues that it’s because we fail to factor the opportunity cost of time into our decisions. So how do we counter this irrational tendency? In this lesson, Ariely introduces you to a strategy for managing this hidden variable more effectively for yourself and your employees.We don’t take the opportunity cost of time into account because the wasting of time isn’t salient.What we notice provides input for decision-making. Consider ways of making what is important to you (like loss of time) salient and measurable.