July 3, 2009

When performance-related pay backfires

"Performance-related pay often does not encourage people to work harder and sometimes has the opposite effect, according to new research due to be unveiled at the London School of Economics and Political Science. An analysis of 51 separate experimental studies of financial incentives in employment relations found overwhelming evidence that these incentives may reduce an employee's natural inclination to complete a task and derive pleasure from doing so. '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,' said Dr Bernd Irlenbusch from the LSE's Department of Management."
This quote was taken from this article: When performance-related pay backfires. Readers of this blog won't be too surpirsed. Here are a few ealier related posts:

1 comment:

  1. Senia Maymin pointed me to this related article: Time IS Money When You're Paid by the Hour: http://www.gsb.stanford.edu/news/research/compensation_pfeffer_timeismoney.shtml

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