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How to Be a Better Manager by Understanding the Difference Between Market Norms and Social Norms
Here’s how your team actually wants to be motivated
In his book Predictably Irrational, Dan Ariely, professor of psychology and behavioral economics at Duke University, outlines the differences between social norms and market norms.
“Social norms,” Ariely writes, “include the friendly requests that people make of one another…wrapped up in our social nature and our need for community.”
Social norms explain why we mow the neighbors’ lawn while they’re on vacation. Why we help an older couple retrieve their suitcases from the baggage conveyor at the airport. Why we deliver meals to the home of a colleague with newborn twins.
Market norms, on the other hand, are quite different. Market norms govern the world of commerce. As Ariely writes, “The exchanges are sharp-edged: wages, prices, rents, interest, and costs-and-benefits.”
So, what separates these two worlds? One world governed by our connection to serve others, the other ruled by the soulless exchange of capital for goods and services. One world of good deeds, neighborliness, and looking out for one another, and the other of negotiation and greed.
One word: cash.
According to Ariely’s research, as soon as cash enters the equation, we’re transported from the realm of social norms to that of market norms. Instantly. Proceed immediately, do not pass Go, but maybe collect $200.
We modify our behavior depending on which realm we’re in.
This is a key insight for managers. You have two ways to motivate people, and we often forget that we have two ways to motivate people. We are fixated on money, which is firmly in the realm of market norms. And we forget about making use of social norms. (And, yes, I’ll cover the ethics quite firmly below.)
How to Make a “Social Norm” Request
Don’t offer money unless you want to get into a negotiation. Instead, offer your praise and thanks, graciously remind the other person of the overall good the project is intended to serve, or simply find a way to make a human connection with them. Let the person you’re talking to know how meaningful their help is, and try to connect it to the greater good.
Ariely cites the example of a group of residents in a nursing home who needed legal services but couldn’t afford them. The nursing home ran two advertisements trying to convince lawyers in the community to donate their services. The only difference between the ads was that one offered a small remuneration — $30 per hour—while the other simply asked the lawyers to donate their time to a good cause. Far more lawyers responded to the ad that mentioned nothing about compensation.
Think about that. The only difference between the two ads was the $30. Both ads mentioned the elderly. Both made it clear that this was a charitable cause. As soon as money was even mentioned, the lawyers were kicked into the world of market norms and decided they had better things to do with their time. Like donate it to a worthy cause. These are the types of studies that give traditional economists nightmares.
When we want to do good for others, being paid for it turns it into something else entirely. Something governed by the forces of market norms.
At work, this most often translates into making a request that either makes the listener feel unique and special or connects the work to some larger mission.
In an appeal to market norms, you might say, “You need to work over the weekend because your promotion depend on you putting in extra hours.”
However, in an appeal to social norms, you might make the same request by saying, “We have an opportunity to land a prestigious client on Monday if we can show a compelling demo. You’re the only person who has the skill to build an appealing version of the demo on short notice.”
Counterintuitively, Employees Are Asking for This
Few of us are contributing everything we have to contribute. Sure, there are moments when we’re giving our work our highest levels of concentration, focus, and effort. Moments when we’re fully engaged with the project, our colleagues, or even our families. Then there’s the rest of the time, when we’re distracted or just going through the motions so we can check the box and move on to the next task. Doing what we’re told, and then waiting for the next set of instructions.
In Enlightened Leadership, authors Ed Oakley and Doug Krug cite a study demonstrating that roughly 20 percent of American workers are contributing at their highest level and can’t reasonably give more to their work, and another 20 percent aren’t participating at a high level but have no desire to increase their contribution. Then there’s the middle 60 percent, over half of the working population, who are willing to give more if there’s something in it for them.
Bob Nelson, author of 1,001 Ways to Reward Employees, asked managers to define what they felt “something in it for them” means. The managers surveyed wholeheartedly agreed on three things, in order of importance: more money, better job security, and opportunities for growth and promotion. Nelson then surveyed employees and came up with their top three: appreciation for their work, feeling “in on things,” and receiving help with personal issues. Money, benefits, and promotions didn’t crack the top three.
So, this right here is how I address the ethical concern of teaching you tricks to motivate (some might say manipulate) your team. Your team knows you can’t give them more money with every request. But they are hungry for the soft rewards that define social norms.
Managers typically default to market norms as a way to motivate and reward. But that isn’t what resonates with most of their employees. Employees want things more associated with social norms — things that engage their hearts and minds, not just their checking accounts and 401(k). And things that, by the way, can be pretty close to free.
The larger lesson here is that when you’re seeking to build influence with others, find out what matters to them. It’s a natural tendency to assume that what works for us must work for everyone, so we tend to give the world the same things that we need from the world. This can work, but only with the small percentage of people who are driven by the same things we are.
“We wildly underestimate the power of the tiniest personal touch.” —Tom Peters
A Social Norm Request in Action
“She’s probably the best junior engineer we’ve got,” my boss was saying. “And if we don’t get this fixed, she’s going to leave. I doubt we can keep her, but if I could pick anyone to fix this and get her to stay, it’d be you. So that’s what I’m doing.”
Jordan was a high-potential junior engineer from a high-caliber technical university. She was also being overworked and underappreciated. She’d finally worked up the nerve to ask to report to a different manager.
In my first meeting with her, Jordan outlined everything she was working on. It easily filled the whiteboard spanning one wall of the conference room. Her entries in our time-tracking system consistently reported 60-plus-hour weeks. And there was enough work on the board for twice that.
In our organization, we work hard, but 60 hours is too much work. The unlimited backlog just exacerbated the feeling of being overworked.
We dug in. I worked as hard as I’ve ever worked in my life. We planned out how to get back on top of everything she was responsible for, brought in additional resources, and communicated status and progress as if we were trying to guide the Apollo 13 spacecraft back to Earth.
My sense of urgency came directly from the way my boss had framed his request to me.
A few weeks later, we’d done it. Every project on that whiteboard was back under some semblance of control, with reasonable deadlines and, quite often, someone else to do the work. Jordan was content and started arriving at the office and leaving for the day along with everyone else.
Why had I put in that kind of effort? Because my boss asked me to? Sure. Because our products depended on the work? Of course. Because Jordan’s morale was suffering? Yep.
But mostly I did the work because I was inspired. My boss hadn’t said, “See what you can do to help.” He’d painted the picture much more clearly, outlining the challenge. He wasn’t just asking me to help get work back on track—he was asking me to figure out how to keep our best young engineer with the company. That’s the kind of challenge most any manager will sign up for.
In The Wisdom of Teams, Jon Katzenbach and Douglas Smith outline that, many times, all it takes to bring people together to do their best work is defining an inspiring challenge.
Save the money you’d otherwise spend on team outings at ropes courses, high-priced consultants that teach you to trust one another, and multiday workshops in fancy hotel conference rooms. Instead, figure out how to frame your situation, issue, or project as a challenge, something that people might even volunteer to work on. Get out of the way and let the work motivate.
“That is what every successful person loves: the game. The chance for self-expression. The chance to prove his or her worth…The desire to excel. The desire for a feeling of importance.” — Dale Carnegie
Understanding how to develop a sense of purpose motivates teams while costing you next to nothing. In fact, that’s part of the point: Keeping cash out of it helps us stay in the world of social norms, where people are contributing because they want to, not because they’re being compensated for it.
Social norms, using what really matters, and letting the work motivate. The next time you want to engage others in contributing at their highest level, give one of these a try. Or even all three. You might be surprised by what you really can get for free these days.