Can You Pay People To Be More Creative?

Yes - sometimes, in performing structured tasks. JL


Cassie Werber reports in Quartz, photo by Mohammed Abd El Ghany in Reuters:

Workplaces try to stimulate creativity, in hopes that inspiration results in lucrative innovation. But creativity is a trait associated with freedom, spontaneity, and enthusiasm, raising the question of whether it’s possible to incentivize it at the office. Is money the answer? Research has suggested paying people to make them more creative is counterproductive, because it can “crowd out” intrinsic drive. (But new research results) suggest that, when the goal is “free” creativity, paying people doesn’t help, but in tasks where creative thinking is necessary but the parameters are well-defined, it might make a difference.

Creativity is highly prized, whether it’s the work of an abstract painter or the genius of a scientist. Workplaces also try to stimulate creativity, in hopes that inspiration results in lucrative innovation. But creativity is a trait often associated with freedom, spontaneity, and innate enthusiasm, raising the question of whether it’s possible to incentivize it at the office. And if so, is money the answer?

Economists Gary Charness of UC Santa Barbara and Daniela Grieco of Bocconi University set out to investigate this question in a paper published this month. In the past, the authors noted, monetary prizes often led to innovation: In the 1860s, Napoleon III of France launched a competition for any scientist who could come up with a cheaper butter substitute for use by the army and the poor, leading to the invention of margarine.

On the other hand, the economists wrote, previous research has in fact suggested that paying people in an effort to make them more creative is counterproductive, because it can “crowd out” intrinsic drive. Compared to that finding, they made a surprising discovery, published in the Journal of the European Economic Association: In some tasks, it seems, you can indeed pay people to be more creative.

The research involved 328 participants, each of whom was given a “closed” or an “open” creative task to perform. “Closed” tasks have very clear parameters: In this case, the participants had to use certain words to create a story, or arrive at a specific number by means of a set of mathematical processes of their own devising. “Open” tasks, by contrast, have instructions, had no limits: the participants were asked to describe a future society, or create imaginary inventions.

The participants were put into groups. Some were asked to rank other groups’ work on the basis of how “creative” it was, and some knew ahead of time that their work would be ranked. Some of the groups were offered financial incentives, for example a $9 prize for ranking as “most creative.” All were paid $5 for showing up, and “blind” judges also separately ranked all the work without knowing who had produced it.

The researchers found that, in closed tasks, money worked. People who completed closed tasks in the groups vying for prizes produced work that scored higher for creativity than those in the control groups. (Some groups received flat fees, and others no fees beyond the $5 minimum.)

In the groups performing open tasks, the offer of financial reward didn’t lead to significantly higher scores. These results suggest that, when the goal is “free” creativity, paying people doesn’t help, but in tasks where creative thinking is necessary but the parameters are well-defined, it might make a difference.

Another outcome is perhaps even more telling, however: The economists noted that the anticipation of a peer ranking spurred higher creativity in groups performing both closed and open tasks. We care about cash, but not, perhaps, as much as we care what people think of us.

The economists suggested some applications of their research: Companies might internally decide to financially incentivize certain tasks, for example, while research institutes might make financial aid available for certain types of innovation. But a more general takeaway for workplaces is that if people care about what their peers think of their creativity, they’re likely to be more creative.