Truly fascinating stuff. The other night I started reading Dan Ariely's the Upside of Irrationality (a follow to his first book, Predictably Irrational -- which I finished a few weeks ago and thoroughly enjoyed).
Only a few pages in, but the experiments being discussed have to do with performance-based bonuses and whether they work like we think they do. (Surprise, they don't really). In mechanical tasks -- pushing buttons, hauling bricks, etc. -- the higher the bonus, the harder people tended to work. But when it came to more creative tasks, ones where people used their mind vs. their brawn -- higher bonuses stressed them out and they performed badly. Ariely:
"To summarize, using money to motivate people can be a double-edged sword. For tasks that require cognitive ability, low to moderate performance-based incentives can help. But when the incentive level is very high, it can command too much attention and thereby distract the person's mind with thoughts about the reward. This can create stress and ultimately reduce the level of performance."When they had to perform in public, the results were also bad:
"As it turns out, overmotivation to perform well can stem from electrical shocks, from high payments, or from social pressures, and in all of these cases humans and nonhumans alike seem to perform worse when it is in their best interest to truly outdo themselves."Makes me wonder .... are we making it harder for our sales reps to sell more ads when we base commissions on sales and display boards around the office publicly shaming those who are behind? Are there perhaps better incentives we can offer? (Profit-sharing?) And, in the process, can we spend less out-of-pocket for results?
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