A lesson in life from Freakonomics

The book, Freakonomics, has been on my list of “must reads” for some time, and I started reading it last night.

I had an “Aha, I must really think about this” moment when the authors stated, “Incentives are the cornerstone of modern life. And understanding them – or, often, ferreting them out – is the key to solving just about any riddle, from violent crime to sports cheating to online dating.”

Incentives are about people getting what they want.

An incentive is a means of urging people to do more of a good thing and less of a bad thing. The authors state that there are 3 types of incentives – financial, social and moral.

The financial incentives are obvious. For example, anti smoking campaigns typically have all elements. The financial element is the extra tax placed on cigarettes. The banning of cigarettes inside buildings and restaurants is a powerful social incentive. And, the authors state that the US Government used a moral incentive (I’m not sure how well this one worked though) by saying that terrorists raise money by selling black market cigarettes.

This has got me thinking about incentives in the workplace. It helped me decode some of the things that we do. In our office, we use a combination of incentives to start meetings on time. We have a financial incentive (an RM2 fine for being late – we collect the money and then buy food with it when there is enough fine money!). And we have a social incentive – people feel that they are holding the process up if they run late. And, we have a set of values, including Honest, Kind Respectful Communication, ONE Team, Deliver Wow, Positive Fun Energetic. These provide moral incentives to guide our behaviours.

I now understand my world just a little bit better!

Anyway, stay tuned for an article on this subject….lots of rich stuff to write about!

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