If I ask you, my friend, to help me move furniture around my apartment, you might gladly volunteer your time. If instead I offer to pay you to help me move furniture, are you now less inclined to do it?

Or let’s say you’re a teacher. You care deeply about your students. If your employer offers you a bonus that increases with each student who passes a standardized test, are you now more motivated to teach effectively?

There are a few popular beliefs about incentives (such as monetary compensation) and intrinsic motivation (that is, our internal desire to do something) that don’t exactly add up. Generally, we think of incentives as spurring motivation rather than quashing it. If I offer you a high piece rate for planning tulips, you should be motivated to plant as many tulips as you can. Incentives or rewards are supposed to increase motivation.

But with certain kinds of tasks, we have a totally different take on how incentives affect motivation. Getting paid to help a friend move furniture feels icky and sucks the enjoyment out of it. Plus, we know that when an incentive or reward is too high, we might be motivated to achieve the goal, but we are more likely to perform poorly.

An Illogical Conclusion About Motivation and Incentives

Let’s look at this illogical conclusion more closely. A few researchers (Cerasoli et al., 2014) explore it in a paper on the topic. They set it up by saying most people believe the following three statements are true:

“(a) incentives boost performance,

(b) intrinsic motivation boosts performance, and

(c) incentives reduce intrinsic motivation.

We term this the uncomfortable conclusion. If (a) and (c) are true, then one has to conclude that (b) could not be true: If incentives boost performance and reduce intrinsic motivation, then intrinsic motivation must be associated with lower performance, which runs counter to (b). Or, if (b) and (c) are true, then (ignoring for a moment that a large enough incentive can overcome any drop in intrinsic motivation) one must logically conclude that (a) could not be true. That is, if intrinsic motivation boosts performance and is negatively related to incentives, then incentives must be negatively or unrelated to performance.”

So the researchers did a meta-analysis of past research on motivation and incentives. They found that intrinsic motivation and incentives are not mutually exclusive. But research studies often analyze those two forces as if they were completely separate.

One of the problems they point to is the assumption that intrinsic motivation and incentives must be analyzed separately when in fact they could be interacting with one another in a way that affects performance. Just because you get paid to plant tulips doesn’t mean your love of gardening disappears or even lessens necessarily. Cerasoli et al. say that’s part of the problem. We need to instead have research that assumes there is interplay between intrinsic motivation and incentives so we can understand how it works.

How to Best Incentivize Workers

Organizations looking to boost employee productivity care very much about the effect of incentives and employee motivation. The question matters because it determines how employers incentivize employees.

The researchers of the paper provide a few clear suggestions of what organizations can do to make user of their findings. It all comes down to the type of job the employee has to do.

For tasks that are simple but highly repetitive, and maybe even a bit dull, it’s better to create more incentives and to have those incentives directly tied to the work. More complex tasks that require personal investment should be less linked to direct incentives, they say.

“For example, teachers who are paid based on their students’ performance do no better (Springer et al., 2011), and doctors who are paid based on patient outcomes do not have healthier patients (Petersen et al., 2006).”

References

Cerasoli, C. P., Nicklin, J. M., & Ford, M. T. (2014). Intrinsic Motivation and Extrinsic Incentives Jointly Predict Performance: A 40-Year Meta-Analysis. Psychological Bulletin, 140(4):980-1,008.

Petersen, L. A., Woodard, L. D., Urech, T., Daw, C., & Sookanan, S. (2006). Does pay-for-performance improve the quality of health care? Annals of Internal Medicine, 145, 265–272.

Springer, M. G., Ballou, D., Hamilton, L., Le, V., Lockwood, J. R., McCaffrey, D. F., & Stecher, B. M. (2011). Teacher pay for performance: Experimental evidence from the Project on Incentives in Teaching (POINT). Retrieved from ERIC database. (ED518378)

Image by USFS Region 5, CC.