Until robots take over, organizations are still made up of people. So they should be thought of as organisms, rather than as clockwork mechanisms to be fine-tuned and manipulated.
Despite the work of Frederick Taylor and a host of other management thinkers, at the end of the day, this organism rises and falls as a result of the collective action or inaction of the people that comprise it. However, it is not always the same set of people, especially given the relatively shorter tenure of employees compared to 50 or even 20 years ago.
In this sense, the failure of economics is also the failure of management theory– the individuals that make up an organism do not behave rationally. That is, their supposed pursuit of self-interest does not lead to maximum utility for the organism as a whole. On the other hand, it is difficult to say that we are pure “reciprocators” or altruists who are driven primarily by concern for our fellows.
What then, are managers to do? Well, for one thing, they could stop managing– especially in certain work environments. While there are seeming benefits to command and control in activities that are routine, standardized and linear, this is less evident when the work is more dynamic and subject to a high degree of variation.
Historic and current research on motivation suggests that individuals are likely to perform better when they feel in control of a situation, when they have a high degree of autonomy. That is, they are free from micromanagement and are trusted to get things done in a manner that they themselves deem best.
While we are not entirely convinced that self-interest can be discounted as a motivator, we do believe that it needs to be considered together with autonomy and trust. This, of course implies, that you have the right filters in place to hire people who have the necessary skills and knowledge to do whatever needs to be done in a given role.
Here, too, if Google’s data is any indication, traditional practices are ineffective. Selecting for certain traits like resilience, adaptability and mental agility is possibly more important than hiring based on experience, education or behavioral testing (but that’s a topic for another day).
So, assuming you have hired the right people and that you are paying them a reasonable wage, the best course may be to define clear goals and trust them to get there. The satisfaction they derive from your trust and in their own freedom is worth more than all the rewards and recognition programs your HR consultants can dream up.