08-01-17_money8-1jpg.jpegAs some of you know, I’m finishing up a book about the science of motivation. And each day, it seems, brings more evidence of how we’ve gotten this subject all wrong.

The latest example comes from the London School of Economics, where scholars looked at 51 studies on pay-for-performance schemes:

“We find that financial incentives may indeed reduce intrinsic motivation and diminish ethical or other reasons for complying with workplace social norms such as fairness. As a consequence, the provision of incentives can result in a negative impact on overall performance.”

Ooops. Will we finally do things differently in our new, post-Madoff era?

12 Responses to “Money can’t buy you performance”

  1. As a long-term HR practitioner and someone who is committed to creating a paradigm shift in the way employers think about satisfaction in the workplace, I am excited and intrigued by your new project. I established a career learning forum in January (that will last for another six months) with the intention of unearthing what REALLY gets folks excited about this thing called work. Through the lens of their experiences, learning, and insights, I am more convinced that every that many employers have it all wrong when it comes to engaging the employee in the workplace. Most are focusing their efforts on keeping folks from the brink of dissatisfaction, while the real secrets for getting folks excited about work remains untapped. Satisfaction, fulfillment & loving work again is an inside job. I’m excited to hear what you have to say…

  2. Mark Bennett says:

    A friend recommended me your book and have just started it although I have wizzed through Bunko and found it a great way to deliver the message.

    I have been struggling to get jobs (still do) as the organisations are stuck in the older mindset. Maybe more so in the UK. Seeing anyone with more than one skill set from my observations so far are a threat. It confuses them and they can’t stick you in a box. More so if your CV jumps around and doesn’t have a linear progression of ‘putting in the time’.

    A while back when I was noticing these massive difference is how people work and think – specifically me – I thought it would be a great idea to set up an employment agency for these individuals like myself.

    If there is one already please direct me too it.

    And per the motivation being money – my motto is ‘If its not worth doing for free its not worth doing at all’.


  3. I have worked for several different companies in a sales capacity, and in my experience money can be a good incentive rather than a disincentive. I have also seen compensation plans that work very well, and I have seen bonus schedules that do indeed work against the company due to the fact that they are “rigged” against the employee.

    A financial incentive has to be fair and balanced upon productive, ethical behavior otherwise it will not work.

  4. Leah says:

    First off I want to say a big THANKS for putting the Johnny Bunko book out there. It was a big inspiration to me around my coaching message to my clients.

    I have found that money can be a good motivator on the short term, but in the long term it losses its power.I see it with my clients all the time.They took a job that was not 100% appealing to them because of the4 money. Then they get burnt out doing something they are not resonating with and that no longer feels good to them, if it ever did, and they become bitter, frustrated and shut down…feeling trapped by the money. That is not the place to be producing anything from as far as I am concerned.

    Motivation is really about an outside factor…you are doing something to avoid a consequence or to get something.As with any outside factor,it will soon loose its power and effectiveness.Ideally you want to find Inspiration…which certainly comes from inside of you.Align with your inspiration, keep tapped into it and you will go on forever.

    Rock On!

  5. Margaret Graham says:

    I’ve read some news articles (like this one: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2266) that report on success from very small financial incentives that shift health habits (eating and smoking for example). It seems like it takes very little to motivate people to change as long as the programs are designed (see, I DID read A Whole New Mind!) well. Maybe the issue resides in the comment from Leah: does the motivation have a short or long term effect?

  6. Avatar photo Dan Pink says:

    Good points all. And, yes, there’s a definite difference between short-term and long-term. Note, for instance, the very interesting Wharton article to which Margaret linked: In all of these instances reported, “the patients returned to their bad habits once the financial incentive was removed.”

  7. Incentive plans are coming under scrutiny at every level of the organization – from hourly staff to the CEO. Fortunately many of these plans are now being reevaluated. Are these plans really delivering their desired outcomes? In my book Without Warning, I present an idea I refer to as Silent Problems. These are problems that are being ignored, neglected or going unnoticed. Compensation plans are a huge silent problem inside most organizations. The challenge being, designing and implementing an incentive plan that promotes and delivers the types of behaviors desired. Unfortunately, most plans know the types of behaviors they desire, but get some undesirable behaviors along the way. For this reason, many plans stay in existence too long, simply because we don’t know how to fix them.

    Here’s a blog entry titled Job Accountability & Compensation that some might find of value.

  8. Douglas Robb says:

    I just finished watching your TED talk on intrinsic/extrinsic motivators.

    Loved it.

    I am a health/fitness geek and your talk really got me thinking about how inefficient the healthcare/fitness/weight loss industries are at motivating their patients/clients to do “the right things”.

    Do you know of any research regarding intrinsic motivation techniques as they apply to “health promoting” behaviors?

  9. Avatar photo Dan Pink says:

    @douglas — lots of good stuff in this regard. this link should be a good starting point: http://www.psych.rochester.edu/SDT/publications_search.php?action=domain_search&dID=20

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