Worse, when rewards corrode intrinsic motivation, workers have no other reason to put out an effort. This pattern, in turn, confirms supervisors' beliefs in the need for incentives. It is a self-fulfilling prophecy. Small wonder, then, that a growing number of executives are scratching their heads over the failure of their reward programs. Unfortunately, most executives believe the problem lies in the particulars of their program, and so they devise new variations on the same behaviorist theme.
Countless consultants live handsomely from devising yet more ways to compute bonuses, for instance.
Others persuade employers that team incentives are the way to go, or that they need to reward quality, not quantity. But all these fixes miss the point. The problem is not with compensation, per se, but with pushing money into people's faces by offering more of it for this or that. The more closely pay is linked to achievement, the more damage is done. I recommend that employers pay workers well and fairly - and then do everything possible to help them forget about money.