The growing use of variable pay and other financial incentives and the belief in their effectiveness stems in part from something that researcher Chip Heath calls an “extrinsic incentive bias.” This is the tendency to overestimate how much employees care about extrinsic job features such as pay and underestimate how much employees are motivated by intrinsic job features like being able to make decisions or having meaningful work.
- A survey by Kaplan Educational Centers of almost 500 prospective lawyers preparing to take the Law School Admissions Test revealed that 64% of the respondents said they were pursuing a legal career because it was intellectually appealing or because they were interested in the law.
- In data collected from surveys over a 25-year period, respondents to the General Social Survey (a representative sample of people in the United States) rated “important work” that “gives a feeling of accomplishment” as the most important aspect of their jobs, with pay typically ranking third.
Management places excessive faith in the motivational magic of extrinsic rewards.
Organizations ought to offer members sufficient — and correct — inducements to motivate and direct their efforts.
— Hard Facts by Jeffrey Pfeffer and Robert I. Sutton
