Incentives Matter

"Flight" by John Heino

Yesterday I was in that "poetry mood" and began selecting poems to read from various authors -- Rilke, Hesse, Stephen Spender, W.H.Auden -- and I got the notion to find a poem from Elizabeth Barrett Browning that I used to enjoy. On the way to the poem I got distracted by her fascinating biography which I stumbled upon while leisurely traipsing through the Poetry Foundation site, when suddenly this sentence sidetracked me:

Having begun to compose verses at the age of four, two years later she received from her father for "some lines on virtue penned with great care" a ten-shilling note enclosed in a letter addressed to "the Poet-Laureate of Hope End."

Hope End was the estate they lived on at the time. This experience incentivized her to produce more poetry, and gosh-darn-it she became pretty good at it, becoming a major literary figure in her time. So it brought to mind the role incentives played when I was in school (my father gave me a dime for every A in grade school) and in my other pursuits.

It also brought to mind this story, which only took a minute to find on Google, the story of how ship captains were incentivized to to right when delivering prisoners to Australia. Here's a short synopsis, though you can find a more detailed account by following the link below.

As is well known, for three centuries the sun never set on the British Empire, proof that "he who rules the seas rules the world." In the late 18th century the Brits, rather than overcrowding their prisons, began sending their criminals to a remote island, thereby populating Australia. Unfortunately, a lot of this human cargo died en route. Sometimes the ship's captains would withhold food so they could sell the unused grub for personal gain. Sometimes the overcrowding and poor conditions resulted in diseases that killed many of the men. On one occasion 37% of the prisoners died en route.

These kinds of things did not go unnoticed by the press. But how could the governing bodies produce better results? Lectures? Fines? Shaming?

Instead, a change in incentives was undertaken. According to Russell Roberts, in his essay titled Incentives Matter, "a different approach was tried. The government decided to pay the captains a bonus for each convict that walked off the boat in Australia alive."

Russell goes on to state, "I don't think the captains got any more compassionate. They were just as greedy and mean-spirited as before. But under the new regulations, they had an incentive to act as if they were compassionate. The change in incentives aligned the self-interest of the captains with the self-interest of the convicts. Convicts were suddenly more valuable alive than dead. The captains responded to the incentives."

Roberts applies the lesson to economics, but it applies equally well for all of us in various ways. Whether it's meeting deadlines, forming good habits in our children or accomplishing projects in the workplace, good leadership involves finding incentives that work. If we're not seeing the results we want, we may do well to re-examine the incentives.

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As for that poem by Elizabeth Barrett Browning, I did ultimately find it. Enjoy.

“Earth's crammed with heaven,
And every common bush afire with God,
But only he who sees takes off his shoes;
The rest sit round and pluck blackberries.”

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Meantime, life goes on all around you. Open your eyes.