Ask a group of managers how to motivate employees, and you can usually measure in seconds how long it will take one of them to suggest some sort of financial incentive.
The theory is simple: people work to earn money, so if you increase the amount on offer, the quality and quantity of work should increase accordingly.
But does it work that way in practice?
Not really: in a fascinating 10 minute segment during a recent presentation to the RSA, business and technology author Daniel Pink discussed the results of an MIT study into incentives and motivation. (The full 40-some minute presentation is here. The relevant 10-minute segment is below.)
In case you don't have 10 minutes to spare right now, here's the synopsis: the study found that incentives worked exactly as predicted provided the work was of a predictable or repetitive nature. As soon as the work involved "even rudimentary cognitive skill," however, the incentives had an inverse effect: those offered the highest bonuses performed the worst.
As Pink puts it: "When a task gets more complicated—when it requires some conceptual, creative thinking, those kinds of motivators [financial incentives] demonstrably don't work."