Made to Stick: Why Some Ideas Survive and Others Die

by Chip Heath

Imagine that a company offers its employees a $1,000 bonus if they meet certain performance targets. There are three different ways of presenting the bonus to the employees: 1. Think of what that $1,000 means: a down payment on a new car or that new home improvement you’ve been wanting to make. 2. Think of the increased security of having that $1,000 in your bank account for a rainy day. 3. Think of what the $1,000 means: the company recognizes how important you are to its overall performance. It doesn’t spend money for nothing. When people are asked which positioning would appeal to them personally, most of them say No. 3. It’s good for the self-esteem—and, as for No. 1 and No. 2, isn’t it kind of obvious that $1,000 can be spent or saved? Most of us have no trouble at all visualizing ourselves spending $1,000. (It’s a bit less common to find people who like to visualize themselves saving.) Here’s the twist, though: When people are asked which is the best positioning for other people (not them), they rank No. 1 most fulfilling, followed by No. 2. That is, we are motivated by self-esteem, but others are motivated by down payments. This single insight explains almost everything about the way incentives are structured in most large organizations.