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Archive for April 28th, 2012

The $0 Singularity: volunteers in the context of money and effort

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Seth Godin wrote an interesting posting on money – you can read it below and on his site here.

Here’s a few thoughts from experience with compensation plans

Paying people more than they are worth. The idea is twofold. Get rid of the mediocre people keeping only the A and B players. Pay them more than the industry average in the particular location. Overpaying people motivates them to do more work than they would otherwise do. Or, they feel guilty and they increase their performance.  This is marker 5 on the graph above – earn a lot, do a lot.

Underpaid people. The folks who are underpaid generally know that they are underpaid. And the result is that they work less. These folks seem to have some sort of meter – “I will only do so much work, as I determine, that fits my compensation. No ups, no extras”,  Maker 4 on the graph above – earn less, do less.

Coin operated people. No company loyalty. “If someone else pays me more I will leave this company.”

Volunteers – The $0 Singularity

At the $0 singularity you can get minimum effort, maximum effort, or any place along the continuum.  At this singularity all the rules change.

Volunteers are a special class of people. Why would anyone work for no compensation?  At first thought, people think of compensation as money. But compensation can also take a psychological form. At one extreme, someone might volunteer and expend tremendous effort in doing what they consider a higher good. At another extreme, someone may volunteer and then expend little or no effort. The difference is the effort. But what might be the same is the level of psychological compensation these two extreme positions represent. But what are these psychological compensations and how are they different?

Effort (“results’) tells the ultimate motivation

You can use this as a sort of litmus test. How much effort (think “results:) does a volunteer deliver? If this is low then something interesting is happening. Some people volunteer for “status” ( a title or a role) or to “belong to a group” (membership)  that gives them status that they may otherwise not have in their career, home life, or peer group. That the true motivation  is status can be evidenced by, after the status has been achieved, little or no effort is demonstrated on the part of these individuals.  What was to be achieved – status or membership – has been accomplished and secured and there is little else to do.

The challenge of organizations that recruit volunteers is how do you get rid of volunteers when they don’t deliver. Some organizational leaders don’t have the heart to “fire them”. They think… heck, these volunteers are getting no (monetary) compensation so how can we really expect anything from them? But the volunteer is getting compensation – just not the monetary kind. And if you think in terms of alternate types of “compensation” the volunteer is getting paid – perhaps quite a bit in psychological rewards. The problem is that the outcome of this “payment” does not advance the organization. “Payment” is made to the volunteer but little effort or results is delivered to the organization.

So maybe we could add another dimension on the graph of money and effort. Call it “psychological reward”. At one end of that dimensional line mark it “commitment to further the organizational goals”. At the other end of that dimension put “self-interest”. Only then could one better understand the singularity at $0 where volunteer effort is either a maximum or a minimum or anyplace along the way.

Read a related article – What is this… Status Anxiety

From Seth Godin’s Blog

Everyone tells themself a different story about money, but there’s no doubt at all that the story we tell ourselves changes our behavior.

Consider this curve of how people react in situations that cost money.

A musician is standing on a street corner playing real good for free. Most people walk on by (3). That same musician playing at a bar with a $5 cover gets a bit more attention. Put him into a concert hall at $40 and suddenly it’s an event.

Pay someone minimum wage or a low intern stipend (4) and they treat the work like a job. Don’t expect that worker to put in extra effort or conquer her fear–the message is that her effort was bought and paid for and wasn’t worth very much to the boss… and so she reciprocates in kind. The same sort of thing can happen in a class that’s easy to get into and that doesn’t cost much–a Learning Annex sort of thing. Easy to start, cheap to try–not much effort as a result.

It’s interesting to me to see what happens to people who pay a lot or get paid well (2,5). The kids at Harvard Law School, for example, or a third-year associate at a law firm. Here, we see all nighters, heroic, career-risking efforts and all sorts of personal investment. And yet as we extend the curve to situations where the rules of rational money are suspended, something happens–people get fearful again. Don’t look to Oprah or JK Rowling or the Donald to bet it all–the huge amount of money they could earn (or could pay) to play at the next level (1 & 6) isn’t enough to get them out of their comfort zone. Money ceases to be a motivator for everyone at some point.

Most interesting of all is the long black line at zero (3). The curve goes wild here, like dividing by zero. At zero, at the place where no money changes hands, we see volunteer labor and free exchange. In these situations, sometimes we see extraordinary effort, the stuff that wins Nobel prizes. Just about every great, brave or beautiful thing in our culture was created by someone who didn’t do it for money. We see the local volunteer putting in insane hours even though no one is watching. We hear the magical song or read the amazing poem that no one got paid to write. And sometimes, though, we see very little, just a trolling comment or a half-hearted bit of commentary. Remove money from the story and we’re in a whole new category. The most vivid way to think about this is the difference between a mutually-agreed upon romantic date and one in which money changes hands.

All worth thinking about when you consider how much to charge for a gig, what tuition ought to be, what motivates job creators or whether or not a form of art disappears when the business model for that art goes away


  1. The graph above shows effort. Really, no matter if people are compensated ($$) or a volunteer, the focus should not be on effort. The focus should be on measurable results. Competency is the linkage between effort and results. Effort does not matter – outcomes do. Establish mission-aligned measurable outcomes that are to be achieved in a specific time frame and agree on the metrics to measure them and the measurement intervals. If you do this then it will be easy to distinguish effort from outcomes and build a case for determination of competency.
  2. Not setting specific, measurable, time-bound  performance goals linked to mission-aligned strategic initiatives for divisions and departments and holding people accountable is a failure of leadership and management.  It should make no difference if you are the a Fortune 500 company or the Girls Scouts of America – the same should apply.  Even if paid employees or volunteers are delivering results, if the results are not aligned with overall organizational goals then this is less effective than it could be.  This is the typical problem of “organizational silos” and fiefdoms.
  3. One of my favorite quotes from Judge Zagel in the Blagojevich trial: “Zagel: “You did good work. But I’m more concerned when you wanted to do good only when it benefited yourself.”.  Underneath all the good is just self-interest and self-promotion… What’s in it for me?

Written by frrl

April 28, 2012 at 6:21 pm

Posted in Uncategorized

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