Gift Exchange & Motivation

Then I'd like you to come up with you own example of team production with gift exchange, if you can, and try to determine which elements from these readings penetrates your example.

I find these articles very interesting, and particularly the third one, because I can connect my own experience with it.  

The Altruism article argued that expecting people to be selfish triggers people’s economic motivation, restrains people’s moral motivation and crushes people’s tendency to be good. I’ve read similar findings in Psychology before called the “over-justification effect”.  It states that external incentive such as money or rewards will decrease a person’s intrinsic motivation on a certain task or interest. For example, if a child has a strong interest in drawing, rewarding him/her candies every time he/she draw a picture will actually decrease his/her interest and intrinsic motivation in drawing.

I think these theories indicate that external tangible rewards, including financial and material rewards, counterintuitively, may not be that effective in motivating people to perform well. Thinking about my internship experience in Dow Chemical, I found that they managed this very well and made use of these theories in their workplace very successfully. I didn’t really realize this until I read about this blog prompt and thought about what I saw at Dow carefully, and then I started to tie everything together.

As I mentioned in my previous posts, Dow promotes the “appreciation culture” among their employees. Human Resources launch campaigns to promote “appreciation culture”, and encourages their employees to acknowledge each other, appreciate each other, help each other, and collaborate with each other. They designed simple activities to promote preferred behaviors. During the “appreciation week”, they provided well-designed thank you cards and encouraged their employees to write words of thanks to their colleagues, and also helped to deliver these cards to the designated receiver. These thank you cards make employees feel being appreciated and being valued, therefore triggers their moral motivation to be a good worker, just as what the NY Times article wrote “following their natural bias toward reciprocity, service and cooperation”, which ultimately increases employee performance level in a very subtle way. It’s very effective in increasing employee satisfaction, which leads to higher motivation and performance, meanwhile being cost-effective.

Furthermore, Dow shows care for their employees, which again induces their employees to see their work through a moral lens. This is reflected everywhere: flexible working hours; home office policies that allowing employees work from home once each week; free shuttle bus; employee benefits, including free fitness facilities in the office building, free medical service, and free counseling service, showing their care for employee health; and even simple things as ergonomic furniture and adjustable tables. These forms a moral implicit contract between Dow and their employees. Dow as an employer provides all these benefits with an incentive to reward their employees in a way different than directly using money, and expects their employees are motivated to provide better performance. From the employee’s perspective, receiving all these benefits will trigger their moral motivation, and will feel more obligated to give back by working harder. If all these benefits are transformed into financial awards, it might be much less effective than it is now. I think this is an exact example of organization production with gift exchange, and the valuables here exchanged are labor and rewards.

However, I do have a remaining confusion here. It seems that this theory in the Altruism article, and also the “over-justification effect”, are inconsistent with the performance pay model we talked in class. If people are payed based on performance, then in the Altruism article’s perspective, it is making the person to see his/her work through an economic lens, leading them to act selfishly, rather than acting altruistically for the organization. From the psychology perspective, rewards for sure can control and promote people’s behavior, but rewards have a long-term negative effect of undermining people’s taking responsibility for motivating themselves (Deci, Koestner & Ryan, 1999). Thus, for the long term benefit of an organization, instead of pure extrinsic rewards and performance pay, I think it would be wise to adopt strategies to promote intrinsic motivation, which motivate preferred behaviors, and ameliorates detachment and disengagement problems.

Reference:

1. Deci, E. L., Koestner, R., & Ryan, R. M. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychological bulletin, 125(6), 627.

2. Gagné, M., & Deci, E. L. (2005). Self‐determination theory and work motivation. Journal of Organizational behavior, 26(4), 331-362.

Decisions Managing Future Income Risk

It took me awhile to figure out my major. I am now doing a double major in Psychology and Economics, plus a minor in Statistics. I am pretty satisfied with my choice, and I think it prepares me well for a career in business, which I am interested in after graduation. I’ll talk about how I ended up in this combination, and the decisions I’ve made along the way.

I entered college in Hong Kong with a major in Media, which was an entire different path compared with what I am doing now. The time in Media was full of fun, but soon I found that wasn’t something I wanted, I just don’t have the passion to start a career in the media industry. Besides, the pay for jobs in the media industry is pretty low, which further confirmed my decision to change major. Switching major was possible, but it wasn’t that flexible as it is here in the US, and I didn’t really have the chance to explore different majors. I knew I didn’t want Media, but what major I want to get in? I don’t know. So at the end of my freshman year, I decided to transfer to the US.

I was accepted by U of I as a sophomore, and soon I found my interest in Psychology. I love studying the mind and behavior of people and fell in love with it immediately. Psychology is also a subject that could be applied to various different fields. I was glad I figured out something I’m interested in, but on the other hand I also need to plan for my future and land myself a job with a relative good income. At first, being a counselling psychologist was the job I wanted the most. I found myself enjoy helping people and I gain true happiness through it, and I believe it’s a job that could help me realize self-worth. But I didn’t choose that path because I knew I won’t be able to afford myself for a long time after entering counselling. Language and cultural background are critical for counselling psychologists, so as an international student I will definitely choose to go back to my home country for a counselling career. I am from mainland China, and unfortunately the psychology counselling industry in China isn’t as mature as the US. Psychology is still only in the beginning stages in China, and counselling is a career that requires a significant amount of time and money input in the beginning years. The income isn’t that rewarding in the beginning, and you will be able to only afford yourself after 3-5 years in the industry. Meanwhile, others might have already accumulated some wealth. Not to mention whether I will be good at it or not, it’s just too risky for me. I’m sure my parents will be willing to support me, but I feel bad relying on them for such a long time.

So I thought of other fields that psychology could be applied, and business came to my mind. I’ve always been interested in business, and it’s a career with pretty good reward. For me, while a counseling career means high interest, high risk, and low income (at least in the short-term), a business career means relative high interest, although not as high as counseling, but low risk, and relative high income. So it’s a good balance for me. HR and HR Consulting are safe choices for me. There is an area in Psyc that specifically studies how Psyc is applied to the workplace, and HR Consulting is very similar with what Industrial/Organizational Psychologists do in their research. I prepared myself by doing two internships in HR and research in I/O labs. My second choice in business would be Marketing Research and Consumer Behavior Research, which is also in business, and where I could utilize my psychology knowledge to study and predict consumer behaviors. I did a marketing internship in my sophomore year and also gained a closer look to the field by working as a research assistant in the Cultural Psychology and Marketing Lab in the business school. Even if I’m not able to do counselling right now, I’m glad that I love my second choices, business seem to be an exciting area for me. Besides all these, I declared my second major in Economics, a major that could be well applied to business. And also a minor in Statistics, to gain analytical and quantitative skills that are necessary for a business career. I believe a liberal arts degree will benefit me more than a specified degree in business, because I believe everything will be connected in the end and contribute to one’s career and life. And I will still be able to do graduate school in business to gain the essential business skills.

If possible, I still plan to go into psychology counselling maybe in my 40s, when I have enough economic strength to afford and pay for staring a counseling career. There are people succeeded this way, but I’m not sure if that’s realistic for me at that time. But for now, I would pursue a career in business, which I have a passion in, and exposes me to lower risk.

I don’t have siblings, and I’m the only one in my family studying abroad, so their experiences are not very applicable for me. But I did learn something from friends who studied in the US. International students face the choice of going back to their home country or looking for a job in the US right after graduation. Many people have said that, either is fine, but as soon as you’ve made your choice you should stick and work hard for it, and do not be halfhearted. The ones who thinks about the two paths at same time and wants both are always the ones who fail. One’s time and energy is limited, so to gain something, you have to focus and give up something else.

Connecting the Dots and Reflection

After reading through my previous posts, I think the underlying connection between these posts is that they are all a part of the question that how can organizations work more effectively.

In the organization experience & transaction cost post I wrote about my experience in an organization as an intern and also examples of transaction cost in an organization. By writing this post I thought about my past experience carefully and started to think about the bigger picture of how an organization is structured.

In the opportunism post I wrote about scenarios that people acting or not acting opportunistically in a film I watched before. I think opportunistic behavior is something organizations need to deal with, and organizations would always try to find out ways to avoid their competitor’s opportunistic behaviors. This post helped me to think about opportunistic behaviors and the reason behind from the individual level. This post also connects with the moral hazard problem and the efficient principle at the organization level. I think the ultimate purpose to deal with opportunistic behavior is for organizations to reach an efficient outcome.

Then in the team structure post I discussed the team structure during my internship. An effective team structure is critical for team success, and therefore the goal of discussing team structure is also to make organizations work more efficiently. I have always been interested in human capital consulting and organization design, so I found this part about team/organization structure particularly interesting. I’ve also learned about the importance of motivation and coordination. For a team structure to be effective, we have to motivate each team member. At an organization level, to have the organization produce efficiently, management will also have to motivate and coordinate different team and functions. Coordinating the interest of different people and also motivating different people towards the common goals is what management need to do. I think this connects to last week’s class discussion about management, and this is more obvious to me than the time I wrote the post.   

In the transfer pricing post about “illinibucks” I imagined if there is a “illinibucks” system where would I use it, and also possible problems about the pricing of campus services. I thought about this from a supply and demand perspective. I believe that “illinibucks” should be used in areas where there is excess demand and shortage in supply, this can somehow reduce the gap and better allocate resources to people most in need. This post connects to the idea of how should organizations deal with internal transaction and set the most efficient transfer prices. This post, together with the excel homework on transfer pricing give me a better idea about internal transactions in organizations.

My approach to respond the posts changed a lot. At first I didn’t have a clear idea about the course, so I was just responding to the prompts and wrote pretty randomly about my experience. As the course processed I started to become clear about the course theme and also the main ideas discussed in class. So I tried to link my answer to the prompt to the course theme and also approach from an economic perspective. My thinking changed, but the process of writing didn’t change much. I usually will look at the prompt at the beginning of the week, so that I get an idea and start thinking what to write. If I come up with a good idea I’ll take a note, usually just a few word. And then I will collect all my notes, structure my post and write the post at the end of the week. I sometimes also start writing in the middle of the week if I think I have good thoughts, and finish or make changes to it at the end of the week. It’s much easier to write and takes much less time if I have the right experience for the prompt or if I have a lot of thoughts on that prompt. The writing process for the organization experience post and the transfer pricing post went much smoother than the opportunism post. I couldn’t find a very appropriate example for the opportunism post, so I ended up writing a scene in a movie I watched.

If I’m writing the prompt, I would be very interested in writing how economic principles are applied to company cases. For example, the General Motors and Northwest Company examples we discussed at the beginning of the semester. Providing the background info and reading material and ask us to write about our understanding of the companies’ decisions, how economics principles worked in the company cases, and the connection with the class. It would be challenging and a lot of work will need to be done to write this kind of post, but I think the gaining from this kind of analysis would be very practical and help us better know how economics principles work in real world cases.