Why is competition bad in and of itself?
Competition is bad in and of itself because research shows that when people's goal is to beat others and the structure is set up so that they can't both reach their goals, everyone ends up doing a worse job, especially on tasks that require creative thinking, ingenuity, and higher order cognition. It also hurts people's mental health and relationships.
How do you create the right kind of environment to drive performance and deliver great results that everyone is excited about?
To create a good environment for performance and engagement, focus on giving employees meaningful tasks, encouraging them to work together and cooperate, and giving them a lot of decision-making power.
How do investors change a company's culture and the way it acts?
Investors in publicly traded companies often focus on short-term profits instead of long-term investments. This creates a culture where stock prices are more important than employee happiness and teamwork. It's important to have investors who understand this and put environmental and social responsibility ahead of short-term profits.
Marcus Cauchi: [00:00:00] Hello, and welcome back once again to the Inquisitor podcast with me, Marcus Cauchi. Today, I am delighted to have, as my guest, Mr. Alfie Kohn, he's written a book that had a phenomenal impact on me. It's called Punished by Rewards. And what I'd like to do first of all, is, uh, would you mind just giving us 30 to 60 seconds on your background?
Uh, because my, my audience is mainly made up of people from a sales environment and you've obviously got a, a different trajectory. Would you mind just giving us a quick, uh, history of how you got to write Punished by Rewards?
30 to 60 seconds on your background
Alfie Kohn: I have made my living for some time now, reading research and writing books and giving lectures about various topics in human behavior
also education. And, um, my first book is called No Contest: The [00:01:00] Case Against Competition, which draws from many different fields to show that competition is inherently destructive in all areas of human life. And that led me to a broader question, which has to do with, um, what happens when we don't give awards that
pit people against each other so I can succeed only if you fail and just rewards where in theory, everyone could succeed. In any case, the book Punished by Rewards has chapters about business, but also about raising children and teaching students, and more broadly about issues in human behavior and that's what I've been writing and teaching about for some time.
Why is competition inherently bad?
Marcus Cauchi: Excellent. Okay. Well, let's start with the competition question because traditionally businesses are pitted against one another, sales teams are pitted against one another. What, why is competition inherently [00:02:00] bad?
Alfie Kohn: Because research finds that when people's goal is to defeat others. When the structure is set up with a kind of mutually exclusive goal attainment.
So I, or we can succeed only if you fail. Everyone ends up doing a poorer job. If I took a hundred people and gave them all, some sort of task to do some problem to solve. And I randomly assigned them to two groups. One group was just told, see if you can figure this out. And the other is told there's gonna be a prize for whoever does this best study,
after study, after study, cross culturally, regardless of age, gender ethnicity finds that people in the second group who have been goated by the promise of victory, tend to do an inferior job, particularly on tasks that [00:03:00] require creative thinking, ingenuity. Kind of higher order cognition. It may be the case that we can temporarily push people to do something faster or to do more of something.
If the question is how many envelopes can you lick in an hour? And you have no interest in it and you never are gonna do it again, and you don't care about any of the consequences except envelope licking. Yeah. Then the possibility of being the winner and getting a trophy or a dollar or something can lead to that temporary better performance.
But if you're trying to map out a strategy or do something that isn't clear, cut competition undermines the quality of work in workplaces, in schools and in laboratory simulation. And by the way, it also has a detrimental effect on our psychological health and our relationships. So the reason that I suggest this is an inherent problem of competition,
Marcus Cauchi: Mm-hmm,
Alfie Kohn: Not just a [00:04:00] problem of how we have people compete or what the award is
or some other feature of the, of the arrangement is because that's what the research finds. I used to think that if we competed in moderation or did it in a way that was thoughtful, that some competition could be okay and could motivate people to do their best. And gradually, as I read the actual research, I realized that that is something we've been fed led to assume is.
When the research really doesn't support it so better than competition, which teaches people that other people are obstacles to your own success is an arrangement with the absence of competition, but better than that is cooperation an arrangement where all of us have to pull together in well functioning groups in order to succeed.
And incidentally, the research finds that [00:05:00] cooperation genuine teamwork is destroyed when the teams have to compete against each other, which means we take away with one hand what we've just given with the other.
Marcus Cauchi: Very interesting and certainly, the research that I've read is strongly supportive of that thesis.
If I recall Dan Ariely talking about children being given a task and being recognized for working hard versus being intelligent, the ones who worked hard, worked on more problems for longer, and the ones who appraised for their high intelligence, tended to give up much more quickly. And, uh, I see some real parallels here because one of the problems that is inherent in sales, I believe is the compensation systems reward the wrong behaviors, the competitive divide and [00:06:00] conquer command and control structures, encourage people to play, not to lose rather than to win
Alfie Kohn: Yes. And, and no, I'm sorry. Go ahead.
Marcus Cauchi: Sorry.
Alfie Kohn: Pardon.
Marcus Cauchi: Um, and, and, well, I I'm happy to be challenged, so, uh, I'm here to learn. And the other thing that I've noticed is that the tendency for organizations that have a very hierarchical structure, they, uh, struggle to relinquish control. So they don't empower their people to come up with creative ideas.
So they have a tendency to recruit in their own image, often only weaker. And I'm really curious about your thoughts on that and feel free to pull it apart.
Alfie Kohn: I agree, particularly what you, what you said at the end, but from my perspective, that critique doesn't go nearly far enough. You're still talking about what we are rewarding for or how the organization is set up and implement some kind of contest [00:07:00] or reward structure.
What I'm arguing is that there is no way to do it right. The problem is with competition itself. That was my first big reveal, you know, or revelation in the first book. But then I realized, I began to ask what, if everybody could succeed? What if we set it up so that there was no artificial scarcity?
Anytime you give an award or have a contest, you pluck scarcity out of thin air and make people have to defeat each other to get something that in theory, everybody could get. But it turns out the problem isn't limited to that artificial scarcity, any reward system where you say to people do this and you'll get that turns out to undermine the quality of the performance,
even if there is no competition involved at. So, for example, the worst companies and [00:08:00] organizations, pit, their sales people against each other, with a contest to see who can be the best. And that is a recipe for failure, even on the part of the person who ends up winning the contest today, because that person too has been deprived of the benefits of a well functioning collaborative
organization, but even companies that know enough, never to do that. And in fact, affirmatively to try to promote cooperation, how can we all help each other? Nobody succeeds, unless we all succeed and so on. If they're given bonuses, If they have to meet a certain quota, if they're getting commissions, they have what psychologists call an extrinsic motivation to succeed, which means you do this so that something else will happen so that you'll get a doggy biscuit that is completely different from intrinsic motivation, which means finding the work itself [00:09:00] satisfying.
And what hundreds of studies have found with adults as well as kids is that the more you are rewarded for doing something, the more you tend to lose interest in whatever you had to do to get the reward. That means that when you are less committed to the task itself, less juiced by what it is you're doing and finding meaning and joy in that the less likely you are to do it well, and this is the point that I want to emphasize here.
There is no kind of sales commission system. There is no kind of reward or incentive setup that can overcome those inherent problems with the whole idea of extrinsic motivation. When you cited before a indirectly related. You credit it to Dan Ariely, but he's actually mentioning the work of Carol Dweck about verbal rewards.
Marcus Cauchi: Right.
Alfie Kohn: And it is important to note that [00:10:00] praise is just a verbal doggy biscuit.
Marcus Cauchi: Right.
Alfie Kohn: Some of that research has found that praising people for effort is different from praising them for their ability, but most of the research, and I think Ariely knows this, even though Carol Dweck doesn't seem to, is that praise is inherently problematic as all rewards are.
It doesn't matter what you praise people for. It doesn't matter how you structure your reward system. What you have to do is move past, treating people like pets, which is basically what all extrinsic inducements do.
Marcus Cauchi: Interesting. My good friend, Rod Jefferson says that you train animals and you enable people.
Thoughts on how one can create the right kind of environment with, even if measures a measurement are an intrinsically important part of that process in order to drive performance, to deliver fabulous outcomes that everybody is fully engaged in
Marcus Cauchi: And I'm really curious to get your take on how one can create the right kind of environment with, even if measures a measurement are an intrinsically important [00:11:00] part of that process in order to drive performance, to deliver fabulous outcomes that everybody is fully engaged in. I love your thoughts on that.
Alfie Kohn: Well, I, uh, it's obviously a huge question and there'll be a lot of variation depending on the kinds of task and organization.
So anything I would say in a couple of minutes would be a, is a terrible oversimplification, but I attempted such a simplification at the end of my book, Punished by Rewards with what I call the, the rule of the three Cs. The letter C and the first C has to do with the Content. Uh, what is the, what is the task that people have to do?
And there's no getting around the fact that if it doesn't feel meaningful or important, as if you're making a contribution that you're doing something that matters that you can't bypass, that you can't do an end run around it by motivating people to do so. [00:12:00] That they don't like there is a, uh, a, an American researcher some years ago, who said his name is Hertzberg.
He said, idleness, indifference, and irresponsibility are healthy responses to absurd work. Don't blame the individuals for seeming unmotivated, cutting corners or whatever, if it's the system and specifically here, the lack of a meaningful task, that's the problem. The first thing a good manager does is to think about how the work itself can connect to people.
Basic desires to do good. The second C is Collaboration or if you prefer Cooperation where you don't feel alone, isolated, and you certainly never feel like you have to defeat the other people you're working with because we all have this basic need for connection. For relationship plus there's [00:13:00] practical benefits to having a system that's set up.
So you don't have to do it on your own. You're encouraged to guided to figure out how you can come to someone else's aid. Someone else can help you understand. You can trade off tasks, you can exchange your resources. All of us are smarter than any of us. And the third C is Choice. And I mean, this not in the, in the incidental or superficial sense of pick your sales region, you know, or pick, pick one of these three items to do this week.
I mean, it, in the more radical democratic sense where people in a given workplace have a great deal to say about everything that's going on about the whole system. So that the best managers are not trying to solve these problems alone and then impose their brilliant solutions on the peons down below [00:14:00] the best managers do a hell of a lot more asking than telling and conversely, when people burn out, you know, it's not, or, or leave, it's typically not because they're not making enough money.
It's not even often because they're working too many hours. It's because they have had the basic human need for autonomy, ignored or smashed out of them by authoritarian leaders who, who hold onto their power. Whenever you find an incentive system with bonuses and, you know, rewards set up commissions, all of this kind of stuff, just like one with punishments, because punishments and rewards are just two sides of the same coin.
Those are typically not set up because they create a well functioning organization, but because the people at the top hold onto their power by giving patronizing pats on the head to people who jump through their hoops and that leads to burnout because people don't like being [00:15:00] controlled and rewards are just
sugar coated control. So you show me an organization where people are doing tasks, they find meaningful or doing it in, in, in an organization with others where they feel connected to their colleagues and are doing it in a way where they have substantial decision making authority about what's going on.
And I'll show you a place that's far more effective and where people are not treated like pets with things like sales commissions.
Marcus Cauchi: That's really interesting. Patrick Lencioni wrote a fabulous book called the Three Signs of a Miserable Job and lack of autonomy was definitely one of those. I can't recall the others off the top of my head, but I'm seeing these threads, uh, occur in so many businesses.
And one of my frustrations is that you can't blame the wall for the headache that you keep beating, uh, your head against. And it, it strikes me. We [00:16:00] need to take a step back and ask ourselves questions about why we do things and why we started doing them. Uh, are they still relevant? And one of the things that I loved about your book was that it forced me to rethink dramatically.
And it, it got me into quite a lot of conflict with others because when I posited the idea that reward systems and commission structures were detrimental to the success of the customer, the employee and the business. I got lots of people who were attached to that old paradigm now. Yes. Um, what, what I'm curious about is how have you been able to translate that message in such a way that business leaders can see the veracity in it and accept it?
How have you been able to translate that message in such a way that business leaders can see the veracity in it and accept it?
Alfie Kohn: Your premise is that I have been able to do that. Um,
Marcus Cauchi: I'm, I'm hoping.
Alfie Kohn: I would say with, with all the extremely limited success for the, because I get the same reactions that you do. And in fact, I'm somewhat [00:17:00] more forceful sometimes in my presentations. So there's even more pushback, but the pushback is not just because of the way the message is delivered.
It's because the message itself is, you know, systematically subversive, it literally subverts the status quo and there's some people. Benefit from the status quo, the people on top, as I just, as I just said a few minutes ago, they use reward systems because if there's one thing I've learned, I've been studying this for decades.
If there's one thing I've learned about rewards, it's that they're always about power rewards are given to people with less power by those who wanna keep the power they have and rewards like punishments are a way that you, you do that. You get to decide who gets the trophy, the certificate, the trip to Hawaii, the whatever it is, or even the praise.
That's why you don't have lower down people praising their bosses a lot because that's not the way it works. It's about, it's about power. And then of course, [00:18:00] let's not forget the. Consulting firms whose very existence and profitability depends on convincing us that you just haven't found the right incentive plan late yet.
No matter how many times incentive plans fail. And they always will, particularly with respect to more ambitious, long term qualitative. They never concede that the problem is with the whole psychological premise on which all incentives are based because if you that, you would never use these firms.
The, you know, they that's, what comp comp systems are all about the idea that you can just guide people into doing things better by figuring out what you, what they have to do in order to be paid a little more and the whole premise is wrong, and so you've got people who will always push back and claim.
No, we're just doing it wrong. Don't reward individuals, reward teams. [00:19:00] Don't just give them money, give them in kind stuff. Don't do it annually. Do it quarterly. Don't do. And, and they'll just go on and on and on with all of these massive exercises in missing the point. And the point is these are all extrinsic forms of motivation, which undermine quality and undermine
intrinsic motivation, which not only leads to higher quality in an organization, but also higher quality of life. Once in a while, people will ask me, how should we pay people then? And I say, well, you should pay them well, this is not an excuse for, you know, cutting payroll costs. You should pay them fairly.
Whatever that means. And that should be determined democratically by all the members of an organization. And then you should put money out of people's minds. You want to totally sever that connection. They should know that they're gonna have a good paycheck, but if any salesperson comes to work [00:20:00] thinking how much, what do I have to do to make more money today?
That is the death of quality. That is the death of intrinsic motivation. So the stronger, the connection between the behavior and the compensation, the worse, the quality of the organization, because now is being run by control and extrinsic inducements. And of course, this is the complete opposite of the mainstream wisdom wisdom in inverted commerce.
Uh, the. Which says that you should secure and underscore those, that connection and most work on compensation on management and sales and so on is basically driven by Skinnerian Behaviorism, which was developed on laboratory animals. Most comp experts, most consultants who deal with this stuff. Most of the people who talk about incentives [00:21:00] are basically using
a century old inadequate model of behavior that was developed on animals, not on human and no matter how much evidence we collect of failure of driving people out of increasing the stress, the discord, the anxiety, the low performance, the burnout. And so on, they just will continue to say, you're just not doing it right.
As opposed to saying what you are doing, can't be done. Right.
How investors affect the culture and behavior and performance of a company?
Marcus Cauchi: So one final point before we wrap up, cuz I know, uh, we are committed to only half an hour today. I'm really interested in your thoughts on investors because the values and behavior of the money behind an organization will permeate throughout it.
And I wonder if you've, uh, given any thought to how investors [00:22:00] affect the culture and behavior and performance of a company?
Alfie Kohn: Well, publicly traded companies of course are often accountable, not for long term quality, but for short term quantity. You know, and, and of course I'm hardly the first person to, to see this.
It's, it's quite obvious. And you, you see it by noticing that all kinds of crazy stuff are done to just pump up the stock price, uh, in the short run, rather than making the kind of long term investments, uh, which include making your employees happy and collaborative that might not lead to, uh, a big bang this quarter, but may lead to a healthier, more robust organization over the long haul.
So I guess the, the trick is to make sure that you have investors who understand that and are [00:23:00] also by the way, hopefully the kind of investors who realize that it's not just about their profit, which is a radical thing to say, but which more corporate groups are beginning to acknowledge that companies have a greater responsibility to make the planet survive, to, to do the right thing by their, their customers, um, and their employees, and that sometimes short term profitability,
if it's at the expense of, um, you know, the environment or workers, health and safety. Or providing a product that actually does some good in the world. This may be an issue. So there are different investment structures that's make it more or less likely that we can have that we can have this. But I mean, I think our survival is a species
depends on looking beyond short term profitability.
Marcus Cauchi: Uh, absolutely. Mr. Alfie Kohn, thank you so much.
Alfie Kohn: Oh, my pleasure.
Marcus Cauchi: [00:24:00] How can people find out more about these ideas?
Alfie Kohn: I have a website, which is Alfie Kohn. It's A L F I E K O H N .org, which has a great deal more. It has a whole page just on business ideas. And then also information about the, the, the book of mine that we've been primarily talking about, which is the one called Punished by Rewards.
Marcus Cauchi: Excellent. Thank you so much.
This is Marcus Cauchi signing off. Once again from the Inquisitor podcast. If you found this insightful and useful, then please go to Alfie Kohn's website, read the book. It will open your eyes to things that, um, you've probably been holding dear throughout your entire working life and challenge your precepts.
And if you found it useful, then please like comment, share, and subscribe and do tag somebody. Who's maybe thinking about why their sales, team's not performing to the level that they were hoping it would in the meantime, stay safe and happy selling. Bye-bye.[00:25:00]