Why You Should Be Careful Using Money As An Incentive For Performance Improvement

Be careful Using Money As A Performance Incentive

Be careful Using Money As A Performance Incentive

This article cites Dan Ariely’s research into the effects on monetary incentives on people’s performance and the surprising results. I first heard about this in an online video of Dan Pink’s and he included references to Ariely’s work in his great book ‘Drive.’ You should check out both Pink’s book and Ariely’s ‘Predictably Irrational.’ Impactful research told engagingly.

Broadly, money works fine as a performance incentive in limited situations. For dull, linear, routine processes where ‘more’ productivity is easily produced by ‘more’ effort. The moment any degree of cognitive processing is required at-risk extra money becomes, at best, a distraction. Mostly its impact is negative.

Money is what 70-year-oldd psychologists refer to as a ‘hygiene factor.’ It won’t motivate anyone but the absence of it will demotivate people.

I’m looking at a big pile of absent money right now and it is, indeed, highly demotivating. Oddly though it has motivated me to scribble out a quick blog post. I suspect there is a strong correlation between my blog productivity and money absence.

About Terry Williams - The Brain-Based Boss

I'm all about engaging people and helping you engage yours to influence behaviour to improve results - at work and at home. Maybe you're a manager, a salesperson, a leader, a parent, a presenter or an event organiser? You need to grab your people's attention, create some rapport, be memorable and influence behaviour change. How can we do that? I'm originally a trainer by trade, turned manager, turned comedian and partway back again. Author of 'THE GUIDE: How to kiss, get a job & other stuff you need to know', I write and speak about how to engage people, be they employees, family or yourself. How can we connect with people’s own internal motivations and help them use their own inner passions to drive towards productivity, success and happiness? And hopefully have a few laughs along the way... As a trainer facilitating learning and development in others, I find myself drawing on my own extensive business experience. I specialise in the delivery of high impact, customised training solutions for organisations that are serious about improving the performance and lives of their people.

Posted on February 20, 2012, in Change, Employee Engagement, Influence, Motivating Employees, Motivation, Personal Productivity and tagged , , , , , , . Bookmark the permalink. Leave a comment.

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