Why Incentive Plans Cannot Work

Behaviorist theory, derived from work with laboratory animals, is indirectly responsible for such programs as piece-work pay for factory workers, stock options for top executives, special privileges accorded to Employees of the Month, and commissions for salespeople

. For each person who wins, there are many others who carry with them the feeling of having lost. And the more these awards are publicized through the use of memos, newsletters, and awards banquets, the more detrimental their impact can be.

His analysis, “Financial Incentives,” published in 1986, revealed that 16, or 57%, of the studies found a positive effect on performance. However, all of the performance measures were quantitative in nature: a good job consisted of producing more of something or doing it faster.

Do this, and you’ll get that” is part of the fabric of American life.

Outside of psychology departments, few people distinguish between intrinsic and extrinsic motivation.

John Condry, was more succinct: rewards, he said, are the “enemies of exploration.”

Incentives, a version of what psychologists call extrinsic motivators, do not alter the attitudes that underlie our behaviors. They do not create an enduring commitment to any value or action. Rather, incentives merely—and temporarily—change what we do.

not receiving a reward one had expected to receive is also indistinguishable from being punished.

Anyone reading the literature on this subject published 20 years ago would find that the articles look almost identical to those published today.” That assessment, which could have been written this morning, was actually offered in 1975. In nearly forty years, the thinking hasn’t changed.