World Futures Institute: Risks, Rewards And Responsibilities Part 2

Los Alamos World Futures Institute

Last week we examined risk as a function of probability and explored the concept of expected value to be received if it goes our way. This is a great way to determine if a risk is worthwhile and promises a positive return for your investment. Return on investment implies that the decision is economic but most decisions are not overtly so. What you receive is a reward defined at as “money or another kind of compensation payment that is given for something that has been done or that is offered that might be done.” Here are three examples:

  • The lottery offered a sizeable cash reward to the person who bought the winning ticket.
  • Her success is a reward for her hard work.
  • He or she responded to her or him, “Yes, I’ll met you at the club right after work.”

The first example has a direct monetary measurement implication while the second example may imply money depending on how you define success. The third example, however, has no apparent monetary implication. Rather, it is a social “reward” for inviting someone to join he or she at the club.

Reward is a complicated word. In our society we tend to measure it in material things which in turn link to money as a measure of value. But money is not a reward in itself, rather it is a pathway to reward. In part, it is related to how our brain is made and functions and, in part, it is related to what we learn. In a sense, rewards are directly related to the satisfaction of needs. Enter Maslow’s Hierarchy of Needs.

We are programed with inherent needs, essential to the survival of our species. These are intrinsic needs and include homeostatic (e.g., food and water) and reproductive (e.g., sexual contact and parental investment) desires. When satisfied, these needs represent a reward. At the lower levels of Maslow’s Hierarchy you find physiological, safety, and belongingness and love needs. Satisfy these needs and you get your pleasure.

There are also extrinsic rewards. These are rewards linked to intrinsic rewards. Money is a big one. Obviously, money allows you to buy food which can reward you with a full stomach or it might cause indigestion (not a reward).

There is a risk involved. Of course, not every learned (extrinsic) reward is directly relatable to satisfying basic needs. For example, when your favorite team wins the big game, you receive a reward (bragging rights?) because you satisfied a learned need.

The perception of need and rewarding its satisfaction is all in the wiring of the brain. If you read some literature on the subject you may be rewarded with some learning satisfaction or you may just get a headache. And then you need to consume something to reward yourself with pain relief. You have a difficult day at work so when you get home, you reward yourself with a glass of beer or a glass of wine and relax. You are seeking pleasure and making the pain go away. It is your reward. As humans, we are programmed to seek pleasure and avoid pain, but we have learned that we often must endure pain to get the pleasure reward.

Organizations engage in reward management both consciously and unconsciously. They have reward systems that are both financial and non-financial. The financial systems are focused on extrinsic rewards such as pay and benefits such as health care. These rewards help the employee in satisfying lower order needs in Maslow’s Hierarchy such as food, security, and friends, noting that friends also fits into intrinsic rewards.

But organizations (should) provide employees with extrinsic rewards such as recognition (good job), training and development (continued learning and skill acquisition), and increased responsibility (promotions?). These extrinsic needs correlate with Maslow’s Hierarchy at the upper levels which include esteem and self-actualization. And with a higher salary, one might argue these are more basic (intrinsic) rewards also. While things such as money enhance the satisfaction of basic needs (a reward), at some variable point making more money by itself loses its reward value. (I would like to find that point.)

We take risks to receive rewards. What sort or risks we take depends on our perception of rewards, a variable dependent on where we are on the hierarchy of needs. Rewards can intrinsically and extrinsically satisfy our needs, both preprogrammed and learned. But we are not alone. What are our responsibilities in our pursuit of happiness?

Till next time…
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