Among the many topics that I address in “The Balderdash Chronicles” is the management “science” fad; in particular, as described by Graham Morehead,

[t]he Candle Problem [which] was first presented by Karl Duncker. Published posthumously in 1945, “On problem solving” describes how Duncker provided subjects with a candle, some matches, and a box of tacks. He told each subject to affix the candle to a cork board wall in such a way that when lit, the candle won’t drip wax on the table below (see figure at right). Can you think of the answer?

The only answer that really works is this: 1.Dump the tacks out of the box, 2.Tack the box to the wall, 3.Light the candle and affix it atop the box as if it were a candle-holder. Incidentally, the problem was much easier to solve if the tacks weren’t in the box at the beginning. When the tacks were in the box the participant saw it only as a tack-box, not something they could use to solve the problem. This phenomenon is called “Functional fixedness.”

The implication of which, according to Morehead, is (supposedly) this:

When your employees have to do something straightforward, like pressing a button or manning one stage in an assembly line, financial incentives work. It’s a small effect, but they do work. Simple jobs are like the simple candle problem.

However, if your people must do something that requires any creative or critical thinking, financial incentives hurt. The In-Box Candle Problem is the stereotypical problem that requires you to think “Out of the Box,” (you knew that was coming, didn’t you?). Whenever people must think out of the box, offering them a monetary carrot will keep them in that box.

A monetary reward will help your employees focus. That’s the point. When you’re focused you are less able to think laterally. You become dumber. This is not the kind of thing we want if we expect to solve the problems that face us in the 21st century.

My take (in part):

[T]he Candle Problem is unlike any work situation that I can think of. Tasks requiring creativity are not performed under deadlines of a few minutes; tasks requiring creativity are (usually) assigned to persons who have demonstrated a creative flair, not to randomly picked subjects; most work, even in this day, involves the routine application of protocols and tools that were designed to produce a uniform result of acceptable quality; it is the design of protocols and tools that requires creativity, and that kind of work is not done under the kind of artificial constraints found in the Candle Problem.

Now comes James Thompson, with this general conclusion about such exercises:

One important conclusion I draw from this entire paper [by Gerd Gigerenzer, here] is that the logical puzzles enjoyed by Kahneman, Tversky, Stanovich and others are rightly rejected by psychometricians as usually being poor indicators of real ability. They fail because they are designed to lead people up the garden path, and depend on idiosyncratic interpretations.

Told you so.