Enlightened Management Practices > Profits: Barry Schwartz

Contributor: Jacob Adler

Work and Life is a radio program hosted by Stew Friedman, director of the Wharton Work/Life Integration Project, on Sirius XM’s Channel 111, Business Radio Powered by Wharton. Every Tuesday at 7 pm EST, Stew speaks with everyday people and the world’s leading experts about creating harmony among work, home, community, and the private self (mind, body, and spirit).

Barry Schwartz is a professor of psychology at Swarthmore College where he’s been since receiving his PhD from the University of Pennsylvania in 1971. He’s the author of 10 books and 100s of articles and is well known for both his scholarship and his ability to bring complex sociological and psychological research to bear on the practical matters we all face in our daily lives at work and at home.  Schwartz has written The Paradox of Choice: Why More Is Less, named one of the top business books of the year by both Business Week and Forbes and, with Ken Sharpe, Practical Wisdom about which he gave a TED talk viewed by more than 2M people. He discussed his most recent book, Why We Work, with Stew Friedman.

The following are edited excerpts of their conversation. Or listen to the podcast here:

Stewart Friedman: Your new book is called Why We Work and you dig into the question why indeed do we work? Give us the brief synopsis of how got into this piece and what was the primary discovery when you sought to answer this question.

Barry Schwartz: This question has a long history with me. I was trained in the psychology of B.F. Skinner. Your listeners may not even know who that is anymore.  He was a prominent psychologist from the 40s to roughly 1970, invented the so-called Skinner box and his view was that if you understood how rewards and punishments work, you’d understand everything, and this is especially true of human beings. The answer for him to the question why we work is the rewards and punishments. I thought this was a way too limited and reductive view, it didn’t seem to describe me or most of the people I knew. Nonetheless, it seemed pretty much to characterize the way workplaces were organized.

I started talking to a couple of philosophers at Swarthmore soon after I arrived, and they got me to read people like Adam Smith. I’m embarrassed to say I hadn’t read him before, and Smith, the father of classical economics, had essentially the same view. He said people are basically lazy, they’d rather be doing nothing than something, so to get them to do something productive, you have to make it worth their while and that means you have to pay them. And once you pay them, it doesn’t much matter what you have them do, because they won’t like it anyway, no matter what it is; they’re working for pay. So the assembly line, his famous pin factory where you take something that’s pretty simple to begin with and then you make it even simpler by dividing it into six or seven or 10 different components to make straight pins, that’s his model of efficient production. You’ll ask, “Would anybody like to be just putting heads on pins 10 hours a day, five days a week?” And his answer would be, “Of course not, but it doesn’t matter.”

SF: Because we’re machines.

BS: Yes, because we’re getting paid and we’ll do whatever we have to do to get paid.

SF: So the metaphor of the worker was as an extension of the machine.

BS: Absolutely.   And then 100 years later there was this movement called the scientific management movement that tried to take the metaphor seriously by doing meticulously time-and-motion studies so that you could create assembly lines where people expended the least possible effort and produced the fastest possible production.   They experimented with different ways of paying people to see what kind of pay schedule would get people to work the hardest, for longest. So the answer to the question of why we work was people work for pay, full-stop. That’s the economic model and it’s the industrial model, and I think that economists, when they wrote in this way, never really believed that it was true, because they didn’t think it was true of them. There’s us and there’s them; the people who wear white shirts and ties and the people who wear blue shirts and work boots. And for us, other things matter, but we are just a small fraction of the population and for them, everybody else, it’s just about the paycheck. I know this is an inaccurate depiction of work.  But I think what’s really important is that if you create workplaces in the image of this model, it will become true.  If the only work available to you is soul-deadening, repetitive, mechanical work then indeed you will work for the paycheck and nothing more, because there isn’t anything more to be done.

SF: So your soul is indeed dead and crushed, and you might rebel.

BS: You might rebel, but you have to put food on the table, you have to have a roof over your head.   We started with a false understanding about what people care about and then we made it true by creating work structures that were consistent with that false understanding.  This is what I call ideology, which is a term that Karl Marx used to describe false ideas about human beings that become true when they get institutionalized. And you can see this happening with schools.  Everyone is wringing their hands about how bad the public school system is, but increasingly, the attitude toward teachers, which is only being resisted because the teachers won’t stand for it, is that they’re basically cogs in the machine. You give them scripts, detailed lesson plans, and then you make their pay and bonuses and tenure contingent on how well kids do on standardized tests.   What happens when you do that is the good teachers leave and the not-so-good teachers never have any occasion to get any better, and then they start cheating. They teach to the test or they change answers, so test scores go up but kids don’t learn any more than they did before. So it’s not just blue-collar factory workers, this is really spread throughout the workplace.

SF: As a model for how we organize work, and of course it’s very destructive.

BS: It is very destructive. Doctors are incredibly unhappy with the way they practice. It’s becoming a national problem. They’re leaving the profession, they’re clinically depressed.   Lawyers have been the unhappiest profession for years, and I think it’s because we’ve basically sapped work of anything that people might aspire to, aside from a paycheck. If you’re a doctor or a lawyer, you’re getting a big paycheck, but that just doesn’t cut it.

SF: Back in the 60s and 70s, there was a humanist revolution of sorts that tried to counteract the destructive powers of this ideology and to create a new way of thinking about work, which I studied at the University of Michigan in the early 80s.  But in the 70s the University of Michigan was really one of the centers of the social movement to reimagine work as something that could be ennobling and enriching of the spirit and to create a sense of meaning, purpose, and real consequence.  And it seems to me that your work comes out of that tradition, which hasn’t really taken hold in the way that we would have hoped.

BS: There aren’t any ideas in my book that have not been articulated periodically before. You picked one time, but there are others times, even earlier on, where people acknowledged this, but somehow it never sticks.

SF: But maybe now the time is different.

BS: I’m hoping it is for a couple of reasons. One is that there’s research indicating that women care more about meaning and purpose in work than men do. As more and more women enter the workforce and companies have higher and higher proportion of employees who are women, managers may find they won’t be able to keep good employees unless they give the people working there some sense that they’re working for a purpose.

SF:  This was one of the things we found in our longitudinal study comparing the Class of 1992 to the Class of 2012 at Wharton when we asked hundreds of questions to the Class of 1992 when they graduated and did the same in 2012, so we have a true cross-generational longitudinal design. One of the important findings in the study was how the need for having a positive social impact through your work has grown for both men and women but especially for women.

BS: Right, but that’s the second thing. The aspirations of millennials, at least while they’re young, are quite different from what has preceded. I just think that if you run a business and you want to attract talent, women and young people, you’re going to have to show them that at the end of each work day they’ve made the world better in some small way. So I’m somewhat optimistic.  As these young people move up the organization, they may actually transform the organization.

SF: I have the same hope and expectation. How does what you write about in Why We Work help us understand this movement and what people can do to advance it?

BS: I try to talk about what things to matter to a person besides the paycheck. They want some control over what they do, some autonomy. They want some variety in what they do. They want to be challenged. They want a sense that they’re growing, learning on the job.  They want social engagement with coworkers and respect from supervisors and coworkers, and most important, they want this sense of meaning; that there’s a point to what they do aside from simply paying their rent. We know what you need to add to a workplace to get people to feel satisfaction.  I also show in the book that workplaces that are structured in this way are the most profitable workplaces in their industry across a wide variety of industries, which makes it even more puzzling that this is not more widespread.

There’s a management researcher named Jeff Pfeffer at Stanford who has a book The Human Equation, in which he reviews evidence from banking and other kinds of financial industries, manufacturing, a lot of service industries.  In every case, the most profitable companies are the ones that have the most enlightened management practices. The most profitable companies are the ones that invest the most time in training and personnel development. You might argue that work ought to be organized in this way as a social good, because why should people have to spend half their waking lives doing something they hate when they don’t have to? But then the boss would say, “That’s not my problem. I’m here to make a profit.” You turn around and say that it turns out that here’s a case where you do well by doing good.

SF: So why don’t we see this more?

BS: That’s the total mystery, right? Why are all these companies leaving money on the table?  The only answer I can come up with is that the grip of this ideology about why people work, the implicit answer that everyone has to my question, just closes them off to the possibility that if they had a richer thinking, if they gave their employees more credit, the employees would be happier, the employees would do better work, and the company would be more profitable.

SF: Credit?

BS: Credit for being responsible, serious people who want to do a good job. A lot of the reliance on micromanagement and incentives is a reflection of a lack of trust. If I don’t manage the hell out of them, they’ll just sit around doing nothing. They’ll take advantage. How do you combat that? You combat that by making it so if they do take advantage of you, you see it and they suffer. Trust your employees, give them the goal, and then trust that they’ll figure out a way to achieve the goal, or you give them the training so that they’re eventually in a position to figure out how to achieve the goal, instead of giving them recipes.

SF: Instead of micromanaging and telling them how to do things?

BS: Yes.  The problem is that with all this technology we have now the level of micromanagement that’s possible is just overwhelming. You don’t need to be standing there and looking over your employee’s shoulder, you can measure a million things.

SF: Yes, big data can be intrusive.

BS: So the tools for micromanagement are there and I’m afraid that managers can’t resist the temptation to use them.

SF: Because it gives at least the illusion of greater control, if not actual greater control. Just squeeze out all the human capacity for creative and ingenious effort that could produce great results.

BS: They have more control, but they get worse work. That, I think, raises another possible explanation, which is that managers hate the thought of giving up control.

SF: Well, some do. Why is that? What is the fear there? What’s the anxiety of giving up control and unleashing the human potential that’s there?

BS: Well, if you do that, what role do you play? Are you still needed? People can manage themselves.

SF: You’re perhaps needed to do something different, which is to guide and to help manage external connections and help to provide a sense of direction by having a bigger picture.

BS: It’s true, but there are an awful lot of people whose job is to make sure that an awful lot more people are just doing their jobs.  And if you had other ways of assuring that people would be doing their jobs, these people would have no roles to play.

SF: So you see the elimination of the middle management ranks in the office as people become more empowered, perhaps through big data, to be able to manage themselves?

BS: Well, it’s not out of the question that that could happen, but all I’m suggesting is that it may actually be one source of the resistance to the evidence that is plain and unambiguous.

SF: One of the things that we like to talk about on this show is the connection between work and other parts of life. What your thoughts on the connection between a greater sense of meaning and purpose that is plainly available, if perhaps difficult to implement for so many different kinds of organizations? What impact could that have on people’s lives beyond work, in their families, communities, and for themselves personally.

BS: You’d actually need to collect data on this, and I haven’t.  But what I suspect is that if you do work you value, you will be happy at work. If you’re happy at work, your relations with other people will go better. When you come home, at the end of the work day, your patience won’t be strained, you’ll be in a good mood more of the time, and the result is that your spouse and your kids actually find it tolerable to be with you.

SF: They might even enjoy it. The research on that is called positive spillover; when you feel good in one part of your life, it’s likely to spill over, in terms of your emotional state as well as the kind of behavior you demonstrate, in the other roles that you play.

BS: And we also have evidence, Barbara Frederickson’s provided this, that people who experience positive affect are more creative.  In the workplace the advantage of that is obvious. I haven’t thought much about the potential advantages of this when you come home at the end of the workday.  But it seems to me quite possible that being more creative means those problems we inevitably face in managing our, I don’t know, rebellious adolescent kids, we find that we have an easier time solving those problems if we can think about them more openly and creatively.  This might be more likely to occur if we come home from work feeling good about ourselves instead of feeling down, depressed, and miserable.

SF: There’s so many benefits to this.

BS: Let me just say there is one potential drawback that’s worth mentioning. I think this is a very small price to pay. There are some people who like the idea that when the work day is over, they leave their work and come home. They are okay with the idea that work is just for making a living, and they’re human in the rest of their life. And they don’t want to have to come home at the end of the day with work still on their mind.

SF: The so-called segmenters.

BS: Yes.  And the problem is, if you’re really engaged with your work, then you’re not going to stop thinking about it when it gets to be five o’clock, so you may be a little bit distracted. Could that happen? Of course it can happen. It certainly happened to me often enough in the course of my career.   My kids would ask me something, I’m looking right at them, and I’m not hearing a word that they say.

SF: I know exactly what you mean, Barry. It’s happened to me as well and I study this whole issue of boundaries – the psychological, physical boundaries that you need to be able to switch gears and attend to the people around you even when your mind is elsewhere.  It’s possible to learn how to control your attention, if you’re really focused on it, and to maintain focus on the people who are right in front of you when they need you. Those are learnable skills.

In Why We Work, what are the implications of your analysis for what we’re seeing in this presidential election season, which has begun and seems to last forever? The whole question of the economic divide, which has become such a pronounced issue in our society and in these debates — you’ve been in this field now for quite a while, as you look back retrospectively over the course of your career in psychology and thinking about work, what is different now aside from what you were saying earlier about millennials?

BS: The political debate is really quite disappointing because of the hollowing out of the middle class, all of the discussion, 100% of the discussion, is about compensation, job security, and benefits. No one is talking about the character of the work itself, except that the work has to be good enough that you can actually get a decent paycheck. If you find some way to get a decent paycheck to people working at McDonald’s, that would be fine. I think maybe that when times are hard, and there does seem to be pressure to fatten the pay envelope.   Then the kinds of things I’m worried about just recede into invisibility.   You need people to be flush for this to become an actual agenda item on somebody’s political platform. Maybe I missed it. Have you heard anyone talking about the question of what it is that people do when they work?

SF: Not so much as they have been, thankfully I have to say, talking about the needs of working families to have support that they need through family medical leave.

BS: But again, it’s all financial.

SF: Well, it’s about time. But it’s not about meaning.

BS: It’s about time, but it’s not just about time. It’s not about family leave, it’s compensated family leave. You can get some family leave, worse than any other developed country. Some of it’s available; it’s just not compensated.

SF: You see people in class everyday. What do you see unfolding if you were to look out at the next quarter-century or so? What do you think you might see in terms of how work is going to look?

BS: I’m optimistic because of the women and millennials at more and more workplaces will discover this not-very-hidden secret and give their employees a chance to find meaning and satisfaction at the same time that they get a paycheck. I’m hoping that by the time my grandchildren are entering the workforce, finding a wonderful job won’t be like finding a needle in a haystack anymore.

About the Author

Jacob Adler , W’18,  is a sophomore at Wharton and a contributor at The Daily Pennsylvanian, numberFire, andFake Teams.