Financial Incentive - When it doesn't work

Two groups of people were given the same task, to adhere the candle to the wall, and make sure that no wax drips on the table. One group was given an infinite amount of time to find the solution. The second group was offered monetary bonuses for finding solution within a certain time frame.


Finding the correct result involves a creative use of the materials. Obviously, this is a task that requires thinking outside the box.



The group offered financial incentives consistently finished the task slower than the group given unlimited time. This would imply that financial incentives hinder the completion of tasks. 


An experiment was conducted on another group. The task was the same, but this time the box was given separatedly. It’s now clear that the box is a part of the materials that can be used to complete the task.


This experimental group was also divided into two; one given unlimited time to complete the task, and another given financial incentives.



The results from this experiment were that the group offered financial incentives was able to complete the task much faster than the group given unlimited time. 


Listen to the TED talk of leading psychologist on employee motivation Daniel Pink (NYT best-selling author of his book Drive: the surprising truth about what motivates us), in which he explains that rewards based on performance only work well when there’s a clear path to follow. However, for tasks that require thinking outside the box, monetary rewards will only hurt performance.



For knowledgeable professionals, it requires a combination of intrinsic and extrinsic motivation. What stirs you from the inside and what keeps you grounded in order to follow it. 


How much can you relate to your situation? Let's discuss that another time. 

Date: 5 Mar 2014
Author: Thanh Cong

A passionate writter on the topic of personal development. So much that Cong is now pursuing Marketing, an area  which he used to ignore because of his introvert tendency. After listening to the powerful message of Susan Cain on TED about  'The power of introverts', he was determined to turn his ability to write and express conceptual thoughts into verbal communications, for the better.

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