Is it possible that financial incentives can have a negative impact on performance? Dan Pink makes an outstanding case for the idea that traditional incentive programs work very well but only for limited types of problems. Mechanical tasks, things with known processes and a consistent outcomes see improvement with financial incentives.
On the other hand, problems and jobs that require creative thinking can actually have decreased performance with financial incentives.
Of course, how many of us have jobs that do not require creative thinking and problem solving? How many of our businesses only require consistent execution of repetitive tasks?
Dan’s point is that the three things that impact performance in a cognitive-heavy job are:
Once pay is fair and appropriate, you need to look at harnessing the unseen intrinsic drivers in people to create high performance results.
To my mind, this is just another way to look at a companies responsibility for Job Fit. It’s not just about wanting to have a touchy-feely place to work, it’s about beating the competition in productivity.
h/t to my buddy CK for the link. Anyone else out there wish they could see TED in person? I’ll bet it’s a lot of fun.
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