The following lecture is very interesting. It illustrates how applying psychology in economics could change and even solve today’s economy. It also made me think of Maslow’s pyramid of needs. Maslow’s pyramid of needs presents hierarchy of human needs, which motivate human behaviour in order to achieve fulfilment and satisfaction.
At the bottom of the pyramid are our physical needs. We need food, sleep, water, shelter, safety, health, air, clothing and financial and personal security. Without these needs we cannot survive and until these needs get fulfilled, nothing else really matters to us. All our behaviour and thoughts are focused on how to get what we need to survive another day. At top of the pyramid is what we aspire for in ideal and idyllic times, which is self-actualisation. Self- actualization involves creativity, solving problems, challenging the self, self- acceptance, experiences filled with meaning and purpose, morality, aspirating the achievement of one’s full potential and altruisms. It also involves being open, enjoying and appreciating the small things in life and deriving pleasure from different experiences in life. Once the remaining human needs are being fulfilled then the search for self- actualizations is initiated as it focuses our thoughts and behaviours on that goal i.e. when we have a home, work, financial stability, food, health, good friends, caring and loving family abilities and self- esteem then we seek to do something that matters, being the best that we can be and finding our own path in the world. I am purposely not going into the details of all the hierarchical stages as the most important stages, the top and the bottom are the actual stages, which will enhance the understanding of the ideas in the lecture.
The main points of the lecture state that employers commonly motivate their employees with the help of external incentives (financial rewards or punishments) but psychological research findings has proven that these only improve performance for simple, automatic and mechanical tasks. For more complex, conceptual, vague and not clearly defined tasks, it reduces performance and even harms it. Getting more money is thus not as effective incentive as we might think. Once we are being paid fairly then intrinsic motivation is the best motivator for abstract tasks. Intrinsic motivation, which includes autonomy, mastery and a sense of purpose, helps increase motivation, creativity, productivity, innovativeness, level of involvement, satisfaction, efficiency and the quality of the work. The lecturer asserts that if businesses will change the way they think about what really motivates their employees and apply this psychology lesson, thus give intrinsic incentives instead of extern incentives to employees who have to carry out complex tasks, then the face of economy as we know it will change.
This lecture focuses on the benefits of psychology to economy but if you think about it can apply to all aspects of our lives. Society has become more materialistic, greedy and thus we tend to think that having more will motivate others to behave in a certain way. Indeed some people choose having more money over their sense of purpose, interest, passion and inner compass. Many parents also use this idea of external rewards and they try to motivate their kids to get good grades by promising to buy them things. Studying and bettering yourself should be intrinsically motivated. This lecture can ignite much more than just thoughts about how to increase employees’ motivation and turn them into better employees; it can help us question how to become better individuals. It can help question the level of productivity, quality, satisfaction, competence, engagement of our own life and if it is satisfactory or needs to be improved. It can also help each individual question what is truly behind the career and life choices that were made. Ask yourself, what do you want and need that will truly motivate you to become who you were meant to be and the best version of yourself?