On motivation and work incentives

Extrinsic vs Intrinsic

Extrinsic vs intrinsic motivation, definitions and examples. Evidence of extrinsic motivators interfering with intrinsic motivation. Examples

“For artists, scientists, inventors, school children, and the rest of us, intrinsic motivation the drive do something because it is interesting, challenging, and absorbing is essential for high levels of creativity.
  • Teresa Amabile, Harvard Business School. 23 professional artists. Commissioned and non-commissioned work. Judged on creativity and technical skill. No difference on technical skill. Creativity reduced in comissioned work.

“Not always, but a lot of the time, when you are doing a piece for someone else it becomes more work than joy. When I work for myself there is the pure joy of creating, and I can work through the night and not even know it. On a commissioned piece you have to check yourself be careful to do what the client wants.”

“It is those who are least motivated to pursue extrinsic rewards who eventually receive them.”

  •  ROWE: results only work environment

The role of if-then motivators

  • 1970, british sociologist Richard Titmuss, on blood donation. Paying would reduce the donations hypothesis. Tested in sweden. 153 participants, split into 3 groups. no reward: 52% donation, monetary reward: 30%, monetary reward with charity option: 50%.  Italian government introduced paid time off work, donations increased.
  • Dan Ariely MIT students experiment, and experiment for Federal Reserve System, in Madurai, India. India: 87 participants. Small reward (daily wage), medium reward (2 weeks wage), high reward (5 months wage). 9 tasks. Tennis ball at the target, anscrambling anagrams, recalling a string of digits, creativity, concentration.
“As long as the tasks involved only mechanical skill, bonuses worked as they would be expected. The higher the pay, the better the performance. But once the task called for even rudimentary cognitive skills, a larger reward led to poorer performance.”
“In eight out of nine tasks we examined across the three experiments, higher incentives led to worse performance.”
  • 2009 study by London School of Economics, 51 studies of corporate pay-for-performance plans.

“We find that financial incentives…can result in a negative impact on overall performance.”

“Our experiment suggests… that one cannot assume that introducing or raising incentives always improves performance. Indeed, in many instances, contingent incentives that conerstone of how businesses attempt to motivate employees may be a loosing proposition.”

Candle experiment

1930, Karl Duncker candle experiment (a candle, some tacks, and a book of matches. Sam Glucksberg, psychologist from Princeton University. Functional fixedness – inability to see something beyond what it’s obvious function is.



When if-then motivators work well? For repetitive, algorithmic tasks, following an existing formula to its logical conclusions.

In tasks where narrow focus helps. Extrinsic motivators narrow our focus, help in performing tasks better.


Adjusted managment style

  • Autonomy: a desire to direct our own lives
  • Mastery: a desire to get better, to be more skilled
  • Purpose: a desire to do something that matters, yearning to do something bigger than ourselves

Traditional management style: designed to enforce compliance. Not good to provide engagement.


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