Is pay really the answer?

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It’s been a while since Jerry Osteryoung, professor emeritus (that means retired) of finance for Florida State University, appeared in this space. Yet a column he wrote the other day caught my eye about how incentives don’t always motivate people the way we think they do – especially when it comes to pay.

He cited a recent study by four economists from the Massachusetts Institute of Technology about whether or not money motivates people to work harder (and for the life of me I cannot find that one, though this one done back in 2004 touches on some of the same points).

Osteryoung (seen at right) said their research showed that money actually proved ineffective as a motivator – and in some case actually “demotivated” employees as the incentive levels increased.

While this isn’t true in every work profession – for example, in sales or in manufacturing work – most employees with what Osteryoung dubs “cognitive or creative jobs” don’t respond to the “incremental value” of additional income.

“I think it goes back to the notion of cost-benefit analysis,” he said. “For workers who are paid an adequate salary, the benefits of more money just do not make up for the cost of having to produce more work.”

In short, Osteryoung sums his point up via a quote from Dale Carnegie: “There is only one way to get anybody to do anything. And that is by making the other person want to do it.”

Duke University behavioral economist Dan Ariely discussed this topic last year during a TED Talk and echoed Osteryoung’s point that, contrary to conventional wisdom, it isn't just money that motivates people to work harder – but it's not exactly joy either. “It seems that most of us thrive by making constant progress and feeling a sense of purpose,” he said.

[If you have 20 minutes to spare, you can watch Ariely’s talk on the subject on motivation and money below.]

OK, you ask, so why bring all this “mumbo-jumbo” up in connection with the trucking business? Well, as a follow on to yesterday’s post, the finding and keeping of truck drivers is becoming more and more difficult – and while pay typically tops the list of driver issues, the negative treatment they often receive on the dock, on the road, and in the public eye turn many of them off to the profession.

Paul Newbourne, senior VP-operations for Pittsburgh-based Armada Supply Chain Solutions, touched on this issue in a recent conference call with reporters hosted by Wall Street investment firm Stifel Nicolaus & Co. [and you can click here to read the full story].

“I doubt anyone on this call is encouraging their children, grandchildren, nieces, nephews, or other relatives to be truck drivers,” he said matter-of-factly on the phone.

“The biggest issues to finding and keeping drivers remain compensation rates and the lifestyle,” Newbourne (seen above) noted. “But every carrier I’ve spoken with also highlights he often unprofessional treatment of their drivers by shipper and receiver personnel: the rude treatment, the lack of access to bathrooms and vending machines for food at the dock. They restrict truck engine idle time but make no other provisions available for drivers to keep warm or stay cool – especially in extreme weather.”

Author Daniel Pink delved into some of the thinking behind how and why people are “turned on” and “turned off” but especially into how the perceived “value” of the work being performed can influence how people respond to it.

In sum, Pink suggests that what really motivates workers today is autonomy, mastery and purpose: that the best motivating factors are job autonomy and the mission of the organization. “Workers just want to have more control in their jobs and be involved with firms whose missions they can relate to,” he said.

Can all of that be done in relation to the truck driving profession in this day and age? And if so will it result in a better ability on the part of trucking companies to recruit and retain a new generation of drivers? Those are truly “million-dollar questions” the industry must find answers to.

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