April 14, 2008

Demotivating effects of incentive pay

Many people believe that setting and financially rewarding the attainment of targets increases performance. And however logical this sounds, psychologists have known for long that incentives actually can have a demotivating effect instead of a motivating effect. Timothy Wilson explains the so-called discounting principle in his book Strangers to Ourselves: Discovering the Adaptive Unconscious. The discounting principle describes the human tendency to discount our judgement about the causal role of one factor (for instance intrinsic motivation for playing the piano) when there are other plausible explanations (for instance being rewarded with candy for playing the piano) (Wilson, 2002). In other words: when you 'reward' someone for doing something this may well undermine his intrinsic motivation for the task and hurt his performance too. If this sounds intruiging to you and you want to know more, reader, please check out Punished By Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and Other Bribes, in which you can read much more about this. You may not have time to read a book. Is there convincing research to be found on the Internet which confirms the existence of this motivation and performance-harming effect of rewarding performance? Sure, here is one example which I came across today.

6 comments:

  1. I am very thankful for this article. 1. It may explain a part of the question why my son is such a school hater ... Often started very well and then doesn't care ... and fails. 2. It shows a another example how our society is perverted by extrinsic motivation and specially money /bottom-line of the balance sheet myopia - not taking in account the other aspects like the social or ecological return on investment.
    Andre Burki, Perth

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  2. Hi Andre,
    Thank you. I can imagine. Sometimes institutions are full of this sort of thinking. Like I got a reaction from someone in a large company who says this reward thinking is dominant in her company. she doesn't like it but she can't change it. Her way of dealing with it is to try to not be bothered by it by focusing on what is important to her which is concentrating on some intrinsic factors in her work.

    I remember a period in which my son was having a brief difficult time at school due to the way the teacher approached him. This period lasted a few weeks and dissipated after that. I remember once asking him an observation question while lunching: "could pay attention to situations in which this is a bit less a problem to you?" After some time I asked about the problem and he had nearly forgotten about it. He has changed some very minor things in the way he conducted himself in the classroom and this helped him to not be bothered anymore by the teachers behavior.

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  3. Coert,

    I love that you were able to help your son with such a simple question. Maybe one day you could write a book on Solution Focused Parening.

    Rodney

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  4. Hi Rodney, thanks! Did you know that there is already such a book? http://amzn.to/bGBZ09

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  5. Coert,

    Thanks for the link. I'll probably read that when I become a parent. However, I still hope you will write your own book on SF parenting someday as you'll have your own unique experiences that may be helpful to many.

    Rodney

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  6. thanks (but I don't know if I ever will ...)

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