40 ISE Magazine | www.iise.org/ISEmagazine
Photo courtesy of Western Electric Company Hawthorne Studies Collection, Baker Library, Harvard Business School.
Women work in in the Relay
Assembly Test Room, circa
1930, at Western Electric Co.’s
Hawthorne Works plant in Illinois.
Harvard Business School professor
Elton Mayo conducted studies in
productivity and work conditions
with six female employees at the
plant, leading to what has since
been known as the Hawthorne
Effect.
Work
performance
incentive beyond
‘carrots and sticks’
Experiments, examples show employees are motivated
by team, not self-interest
By Adam Cywar
January 2020 | ISE Magazine 41
T
This is the second of three articles that addresses the
age-old question of what drives the performance
levels manifest in completing work. The first article,
“Factors that affect the performance of work” (ISE
October 2019, Page 40, https://link.iise.org/iseocto-
ber2019_cywar), concluded with some of the most
obvious items that can drive performance levels up and down.
This article discusses the inputs that led up to what I consider
to be the most significant factor affecting performance levels,
shaped by several elements that are reviewed here.
The Hawthorne experiments
One of the most revealing insights to performance factors came
out of the Western Electric studies from 1927 to 1932 at its
Hawthorne plant in Chicago. Western Electric Co. was an
American electrical engineering and manufacturing company
and supplier to AT&T from 1881 to 1995. It was the scene of
a number of technological innovations and also some seminal
developments in industrial management.
Harvard Business School professor Elton Mayo was hired
to examine productivity and work conditions in studies con-
ducted from 1927 to 1932. The studies grew out of preliminary
experiments at the plant from 1924 to 1927 on the effect of
light on productivity. Those experiments showed no clear con-
nection between productivity and the amount of illumination
but researchers began to wonder what kind of changes would
influence output.
Specifically, Mayo wanted to find out what effect fatigue and
monotony had on job productivity and how to control them
through variables such as rest breaks, work hours, temperature
and humidity. In the process, he stumbled upon a principle of
human motivation that would help revolutionize the theory
and practice of management.
Mayo took six women from the assembly line, segregated
them from the rest of the factory and put them under the eye
of a supervisor, who was more a friendly observer than discipli-
narian. Mayo made frequent changes in their working condi-
tions, always discussing and explaining the changes in advance.
He changed their hours in the workweek and in the work-
day, the number of rest breaks and time of their lunch hour.
Occasionally, he would return the women to their original,
harder working conditions.
The investigators selected two women for their second series
of experiments and asked them to choose another four, making
a small group of six. The group was employed in assembling
telephone relays, a small but intricate mechanism composed of
about 40 separate parts that had to be assembled by the women
seated at a lone bench and dropped into a chute when com-
pleted.
The relays were counted mechanically as they slipped down
the chute. It was intended that the basic rate of production
should be noted at the start, and that subsequently changes
would be introduced, the effectiveness of which would be
measured by increased or decreased production of the relays.
Throughout the series of experiments, an observer sat with
the women in the workshop noting all that went on, keeping
them informed about the experiment, asking for advice or in-
formation and listening to their complaints.
The experiment began by introducing various changes, each
of which was continued for a test period of four to 12 weeks.
The results of these changes are as follows:
• Under normal conditions with a 48-hour week, including
Saturdays and no rest pauses, the women produced 2,400
relays a week each.
• They were then put on piece-work for eight weeks and out-
put went up.
• Two five-minute rest pauses, morning and afternoon, were
introduced for a period of five weeks; output went up once
more.
• The rest pauses were lengthened to 10 minutes each; output
went up sharply.
• Six five-minute pauses were introduced, and the women
complained that their work rhythm was broken by the fre-
An airplane view of Western Electric Co.’s Hawthorne Works plant in Illinois, circa 1925.
Photo courtesy of Western Electric Company Hawthorne Studies Collection,
Baker Library, Harvard Business School.
42 ISE Magazine | www.iise.org/ISEmagazine
Work performance incentive beyond ‘carrots and sticks’
quent pauses; output fell slightly.
• They returned to the two rest pauses, the first with a hot
meal supplied by the company free of charge; output went
up.
• The women were dismissed at 4.30 p.m. instead of 5 p.m.;
output went up. They were dismissed at 4 p.m.; output re-
mained the same.
• Finally, all the improvements were taken away, and the
women went back to the physical conditions of the begin-
ning of the experiment: working Saturday, a 48-hour work-
week, no rest pauses, no piece work and no free meal. This
state of affairs lasted for a period of 12 weeks. Output was the
highest ever recorded, averaging 3,000 relays a week.
Findings from the Hawthorne experiments
What happened was that six individuals became a team and
the team gave itself wholeheartedly and spontaneously to co-
operation in the experiment. They felt themselves to be partici-
pating freely and without afterthought and were happy in the
knowledge they were working without coercion from above or
limitation from below.
They were themselves satisfied at the consequence for they
felt that they were working under less pressure than ever before.
In fact, regular medical checks showed no signs of cumulative
fatigue and absences from work declined by 80%.
It was noted, too, that each woman had her own technique
of putting the component parts of the relay together. Some-
times one varied this technique in order to avoid monotony and
it was found that the more intelligent the worker, the greater
was the number of variations, similar to McClelland’s research
findings into achievement of motivated people.
The experimental group had considerable freedom of move-
ment. They were not pushed around or bossed by anyone.
Under these conditions, they developed an increased sense of
responsibility and instead of discipline from higher authority
being imposed, it came from within the group itself.
To his amazement, Mayo discovered a general upward trend
in production, completely independent of any of the changes
he made. His findings didn’t mesh with the prevalent theory of
the worker as being motivated solely by self-interest. It didn’t
make sense that productivity would continue to rise gradually
when he cut out breaks and returned the women to longer
working hours.
Mayo began to look around and realized that the women, in
exercising freedom they didn’t have on the factory floor, had
formed a social atmosphere that also included the observer who
tracked their productivity. They talked, they joked. They be-
gan to meet socially outside of work.
Employees work in the cord finishing department, circa 1925, at Western Electric Co.’s Hawthorne Works plant in Illinois.
Photo courtesy of Western Electric Company Hawthorne Studies Collection, Baker Library, Harvard Business School.
January 2020 | ISE Magazine 43
Mayo had discovered a fundamental concept that seems ob-
vious today: Workplaces are social environments and, within
them, people are motivated by much more than economic
self-interest. He concluded that all aspects of that industrial
environment carried social value.
When the women were singled out from the rest of the
factory workers, it raised their self-esteem. When they were
allowed to have a friendly relationship with their supervisor,
they felt happier at work. When he discussed changes in ad-
vance with them, they felt they were part of the team.
He had secured their cooperation and loyalty, which ex-
plained why productivity rose even when he took away their
rest breaks.
The power of the social setting and peer group dynamics
became even more obvious to Mayo in a later part of the Haw-
thorne studies, when he saw the flip side of his original experi-
ments. A group of 14 men who participated in a similar study
restricted production because they were distrustful of the goals
of the project.
The portion of the Hawthorne studies that dwelt on the
positive effects of benign supervision and concern for workers
that made them feel like part of a team became known as the
Hawthorne Effect. The studies themselves spawned the hu-
man relations school of management that is constantly being
recycled in new forms today; witness quality circles, participa-
tory management, team building, et al.
Incidentally, the Hawthorne Works, the place where his-
tory was made, is history now itself. Western Electric closed
it in 1983.
Pink’s examples
in behavioral science
A TED Talk presentation by Daniel
Pink in 2009 ties very closely to the
findings described in the Hawthorne
experiments. He uses several ex-
amples of problem-solving to discuss
motivation and behavioral science.
Pink began with a problem to
solve, one created in 1945 by psy-
chologist Karl Duncker as an ex-
periment in behavioral science. It
places the subject in a room with
a candle, a box of thumbtacks and
some matches. The task is to attach
the candle to the wall so the wax
doesn’t drip onto the table.
Tacking the candle to the wall
doesn’t work, nor does melting the
candle to attach it to the wall. The
solution: Attach the box filled with
tacks to the wall as a platform for the
candle to catch the dripping wax.
“Eventually, after five or 10 min-
utes, most people figure out the
solution,” Pink said. “The key is to
overcome what’s called functional
fixedness.”
He cited another experiment by a scientist named Sam
Glucksberg that shows the power of incentives. Glucksberg
gathered participants and offered rewards based on how
quickly they solved the candle problem. Those in the top 25%
would receive $5; the fastest overall would get $20.
Yet despite the incentive, it took the group 3½ minutes lon-
ger on average.
“Now this makes no sense, right?” Pink said. “I mean, I’m
an American. I believe in free markets. That’s not how it’s sup-
posed to work, right? If you want people to perform better,
you reward them, right? Bonuses, commissions, their own re-
ality show. Incentivize them. That’s how business works. But
that’s not happening here. You’ve got an incentive designed to
sharpen thinking and accelerate creativity, and it does just the
opposite. It dulls thinking and blocks creativity.
“What’s alarming here is that our business operating sys-
tem – the set of assumptions and protocols beneath our busi-
nesses, how we motivate people, how we apply our human
resources – is built entirely around these extrinsic motivators,
around carrots and sticks. That’s actually fine for many kinds
of 20th century tasks. But for 21st century tasks, the mecha-
nistic, reward-and-punishment approach often doesn’t work,
and often does harm.”
Glucksberg then altered the experiment by offering the
same incentives but taking the tacks out of the box. In that
instance, the incentivized group was able to perform faster.
“Rewards, by their very nature, narrow our focus; con-
centrate the mind; that’s why they work in so many cases,”
Pink said. “And so, for tasks like this, a narrow focus, where
you just see the goal right there, zoom straight ahead to it,
they work really well. But for the real candle problem, you
don’t want to be looking like this. The solution is not over
here. The solution is on the periphery. You want to be looking
around. That reward actually narrows our focus and restricts
our possibility.”
Harvard Business
School professor
Elton Mayo
conducted studies in
productivity and work
conditions at Western
Electric Co.’s
Hawthorne Works
plant in Illinois from
1927 to 1932.
Speaker and author
Daniel Pink discussed
work motivational
factors in a 2009 TED
Talk presentation.
Courtesy of www.danpink.com
Psychologist and
behavioral scientist
Sam Glucksberg
took Karl Duncker’s
candle experiment and
added a twist, offering
subjects rewards
for how quickly they
solved the puzzle.
44 ISE Magazine | www.iise.org/ISEmagazine
Work performance incentive beyond ‘carrots and sticks’
“Think about your own work. Are the problems that you
face ... do they have a clear set of rules and a single solution?
No. The rules are mystifying. The solution, if it exists at all, is
surprising and not obvious. Everybody in this room is dealing
with their own version of the candle problem.”
The effect of rewards
on performance
In another case cited by Pink, econo-
mist Dan Ariely and three colleagues
conducted a study with some MIT
students who were given games that
involved creativity, motor skills and
concentration. They were offered
three rewards levels for performance:
small, medium and large. For tasks
that required only mechanical skills,
the rewards led to better perfor-
mance. But in those that called for
cognitive skills, a larger reward led to
poorer performance.
The same test was conducted in Madurai, India, to measure
cultural bias, but with the same results: Those offered low and
medium levels of rewards performed about the same, but those
offered the highest rewards did worse in eight of nine tasks.
Pink cited similar results from a London School of Econom-
ics study that showed financial incentives can have a negative
effect on performance.
“The solution is not to do more of the wrong things, to
entice people with a sweeter carrot, or threaten them with a
sharper stick,” he said. “We need a whole new approach.”
“To my mind, that new operating system for our businesses
revolves around three elements: autonomy, mastery and pur-
pose. ... These are the building blocks of an entirely new operat-
ing system for our businesses. Management is great. Traditional
notions of management are great, if you want compliance. But
if you want engagement, self-direction works better.”
To demonstrate such autonomy, Pink cited an example of
the Australian software company Atlassian that would give its
engineers 24 hours to work on any project they chose outside
of their regular jobs, then present it to their teammates. That
concept, which it called “20 Percent Time,” was adopted by
Google.
And perhaps the most radical example was Results Only
Work Environment, or ROWE, created by two U.S. consul-
tants and adopted by several North American companies. In
ROWE, workers don’t have set schedules or have to be in the
office for a certain period; they just have work that must be
completed in any way they choose.
“What happens? Almost across the board, productivity goes
up, worker engagement goes up, worker satisfaction goes up,
turnover goes down.” Pink said. “Autonomy, mastery and
purpose, these are the building blocks of a new way of doing
things. Now some of you might look at this and say, ‘Hmm,
that sounds nice, but it’s Utopian.’ And I say, ‘Nope. I have
proof.’”
He also cited the Wikipedia model of creating an encyclope-
dia in which contributors are not paid, just “do it because you
like to do it.”
“This is the titanic battle between these two approaches,” he
said. “Intrinsic motivators versus extrinsic motivators. ... There
is a mismatch between what science knows and what business
does. ... The science confirms what we know in our hearts. So
if we repair this mismatch between what science knows and
what business does, if we bring our motivation, notions of mo-
tivation into the 21st century, if we get past this lazy, dangerous
ideology of carrots and sticks, we can strengthen our businesses,
we can solve a lot of those candle problems, and maybe, maybe,
maybe we can change the world.”
The final article in this three-part series will take the think-
ing of Pink and the Hawthorne experiments forward to the
formation of the IRA Index and its potential uses to measure
and track performance factors, plus some additional helpful
hints.
Adam Cywar is a consultant, lecturer and author and a longtime IISE
member who has consulted with many organizations. Before his retire-
ment, he held middle-management positions in software development
and industrial engineering organizations at IBM, where he pioneered
the establishment of Activity Based Management concepts and was the
Founder of the IBM Worldwide ABM Competency Center. He was
a contributor to the first edition of the John Wiley Handbook of Indus-
trial Engineering and introduced Total Quality Management concepts
within IBM plants in the late 1960s. Cywar holds a master’s degree
in management engineering and a bachelor’s degree in mechanical engi-
neering from the New Jersey Institute of Technology. This is the second
of three articles that addresses what drives performance levels manifest
in completing work; the third will appear in a future issue. All are ex-
cerpts from his book, “Factors That Affect The Performance Of Work,”
available at no cost at cywar.org.
Economist Dan Ariely
conducted motivational
experiments with a
group of MIT students
determining the effect
of rewards on the
completion of tasks.
Explore examples on motivation
• To learn more about the Hawthorne Experiments, see a
video at https://link.iise.org/CywarHawthorne.
• To view Daniel Pink’s TED Talk, visit https://link.iise.org/
CywarPinkTEDTalk.
• For more on Daniel Ariely’s experiments, visit https://link.
iise.org/CywarAriely.
• For more on Atlassian’s “20 Percent Time” concept,
visit https://www.atlassian.com/blog/archives/20_time_
experiment.
