Published on Development Impact

Getting Beyond Intrinsic Motivation in Service Provision: Let’s Talk Incentives

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The guest post is authored by Ken Leonard
Intrinsic motivation is regularly promoted both as nostrum and portent in conversations about workers in service industries like education and health care. On the one hand, why do we have to focus so much on incentives: aren’t people in the service industry intrinsically motivated to do their job? And on the other, if we focus so much on incentives, aren’t we going demotivate those who are intrinsically motivated?

However, economists and policy makers in the health and education fields are often relying on imperfect definitions of intrinsic motivation.

We tend to think of intrinsic motivation as the opposite of monetary motivation. This is not strictly true. Take the following example of three types of firefighters (drawn from Grant, 2008). The first does his job because he is paid to do his job. The second does his job because he likes to rescue people from burning buildings. The third does his job because he gets satisfaction from running into burning buildings and putting out fires. Only the third is strictly intrinsically motivated (the job is its own reward). The first is motivated by money and the second is motivated by the experience of helping people and earns his reward from the gratitude or recognition of the people he saves.  

Following this analogy, an intrinsically motivated teacher enjoys lecturing and an intrinsically motivated doctor enjoys the act of searching for an answer to a medical mystery. These types of teachers and doctors may or may not be better, but the truth is that policy makers are really thinking about teachers who care about seeing their students learn and doctors who care about seeing their patients return to health. We are reminded by the psychology literature that these two types of people are actually extrinsically motivated.

Importantly, this is not just semantics. When we hear of a fireman who works for money, we immediately think about the wage, its relationship to performance and the way incentives are organized within the system. If you hope to be rescued by someone who works only for the money, you want to know how and under what circumstances he earns more. The term intrinsic motivation, however, often leads to policy paralysis: if they love to do their job, then let them continue to do their job. Once we recognize, however, that public sector workers might be motivated by the gratitude or admiration of others (not the act of doing their job), we might be more likely to ask about wages, incentives and organizations—the same questions we would automatically ask about money.  For example, does seeking the gratitude of patients or students increase or decrease useful effort? Can organizations increase exposure to positive incentives and decrease exposure to negative incentives? Note that this is not the same thing as asking whether we can use student evaluations to adjust pay scales—we are asking whether teachers who care about student evaluations are teaching better than teachers who do not care about evaluations. (Hint: the answer is no.)  

Economists are ahead of this curve, at least in theory. Most economists have backed away from the terms intrinsic motivation and its fellow traveler, altruism, in favor of the term prosocial preferences. Prosocial preferences refer to the fact that people get utility from the outcomes experienced by others and/or may behave in ways they believe will change other’s attitudes about them. Many economists and psychologists have recognized that prosocial behaviors are context specific: people are more generous in social settings or when they perceive that someone is watching, for example. This suggests that the utility people earn from being prosocial is not a constant thing but something that changes with the situation.  

In “Generosity and Prosocial behavior in Health Care Provision: Evidence from the Laboratory and Field” Michelle Brock, Andreas Lange, and I recast behavior that has long been called intrinsic (generosity towards patients) as a type of prosocial motivation and show that, although being generous to strangers is associated with doctors who exert greater effort with their patients, it does not lead to high quality care. We compare generosity to one’s patients with seeking the esteem of peers and show that, although many doctors care about their patients, a far larger number care what their peers think of them. Just as earning two different wages for the same effort might increase total effort, when generous clinicians are offered the chance to earn the esteem of peers, they increase the quality with which they care for their patients. This increase suggests that before the exposure to peers, doctors were not doing everything they could for their patients, just more than the non-generous doctors did.

The paper utilizes an increasingly popular tool—the laboratory experiment—to measure the willingness to share money with a stranger. A sample of doctors (from Tanzania) were given a sum of money and asked how much they wanted to share with an anonymous stranger they would never meet. Thirty percent of the sample offered to share this windfall gain with the stranger by giving away half of the money and 8% actually gave more than half. These same doctors were then examined in their normal practice caring for patients. We find that those who give away at least half have about 8 percentage points greater adherence to protocol than those who give less than half: generosity is associated with greater effort.

It might be tempting to conclude that these 38% of doctors are the altruistic or intrinsically motivated portion of the sample: they care more about strangers and their patients.  However, the experiment continued, by increasing the exposure of all doctors to their peers. Each doctor in the sample was visited by a local doctor who told them that what they did was important, encouraged them to do better and told them that he would be measuring their effort over the next couple of weeks. Importantly, the experiment was careful to avoid the appearance that there were any possible monetary implications. Furthermore, by inferring effort from patient exit interviews done after the visit was completed, doctors could not know the specific times they were being scrutinized, only that they were under general scrutiny over a period of multiple weeks. The immediate consequence of this visit was negligible: there was no statistically significant change in effort in the sample.  However, as the project continued to visit doctors and measure their effort multiple times over the course of 2 to 4 weeks, there was a significant and large reaction to this additional scrutiny. Just as generous doctors provided about 8 percentage points greater effort, the paper shows that doctors provide 8 percentage points more effort once they realized that they were under increased scrutiny from their peers.

Thus, both types of incentives—the opportunity to be generous to a stranger and the opportunity to impress a peer—lead to similar increases in effort. Interestingly, generous doctors have exactly the same response to peer encouragement and scrutiny as non-generous doctors. In other words, those who care about their patients provide greater effort for their patients, but they increase their effort again when they know that a peer is observing (indirectly) their effort.

This study raises as many questions as it answers: are these doctors happier when observed or does being forced to seek the esteem of their peers cause disutility? Does the identity of the scrutinizing doctor matter? How long does this effect last? Nonetheless, it brings both patient-based prosocial preference and peer-based prosocial preferences into the same framework: some doctors care about their patients and their peers, others care mostly about their peers. Most importantly, rather than thinking that those we had previously been content to label as intrinsically motivated or altruistic simply do their job no matter what, we now realize that we have to worry about the effort of these doctors just as much as we have to worry about the effort of those who are not motivated by generosity to their patients.

We need to put to rest the notion of the public servant who, after being properly trained, goes off to do their job without any additional incentives. Instead of this policy paralysis, we can open the door to all sorts of non-monetary incentives. Wages, incentives and organizations are important for those who serve the public as doctors, nurses and teachers even if those wages are not monetary, but come from the approval, gratitude and scrutiny of others.

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