Rethinking incentives.

Abstract

Financial incentives focused on individuals represent a naive understanding of the complexity of human motivation. This article recommends rethinking monetary incentives and moving toward the creation of workplaces that enable and allow the natural excellence that most individuals desire to achieve. Despite their wide use and superficial logic, monetary incentives have features that are toxic to systemic improvement and high performance. They often erode opportunities for true improvement, breed an atmosphere of expectation, decrease innovation, injure intrinsic motivation, and damage teamwork. When monetary "incentives" are used, we suggest directing them to a whole group or team of individuals to inspire teamwork, learning, and greater productivity.