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March 07, 2012



I think a lot would depend here on how big the incentives are. If you earn 10p for your colleague per word found, you'd probably put in a decent effort if only to avoid earning them the paltry sum of 20p, whereas if you were earning pennies for yourself you might well not bother. If you're paid £100 for each word found, I imagine that the motivation for the self-paying group might be higher than the pro-social group.

In other words, we might favour being pro-social when the stakes are low, and the gain to our reputation (as clever, hard-working and sociable!) matters more to us than the relevant pecuniary gain. Up the financial rewards, and we might tend towards becoming utter bastards (call it the Goodwin-Tevez hypothesis, I guess).

It's worth bearing in mind that the people putting in the effort for their colleagues are not necessarily being selfless. They're accumulating the admiration and gratitude from their colleagues, and people who focus on accumulating those things to the exclusion of all else can be just as annoying and disruptive as the money-grubbers.

Churm Rincewind

I don't think anyone seriously believes that high pay motivates people to work more effectively, unless there's evidence I've overlooked. Rather, high pay both denotes status and increases the universe of applicants which in turn increases an employer's ability to select the best qualified and most effective employees.

This is not to say that incentivised payments don't work. Here I part company with Rob, as all the research I've seen concludes that (after salary) people are incentivised by the approval or otherwise of those whose judgement they value, which may be their boss but could also be their colleagues or even their customers. That approval can be institutionalised either by recognition (hence the stars on a name badge in fast food joint, or "employee of the month" schemes), or by financial reward, provided that such rewards are made public.

In short, the efficacy of incentive pay entirely depends on how you do it.

The Thought Gang

Part of what I do for a living involves finding way to incentivise people in an industry where individual commissions are the standard. We've had a good amount of success with team-based schemes.. particularly where the teams have been small (2-5 people).

The problem comes when the team achievement is lower than some members deem it should be. Where that is the case it can be due to failings of one or more members, but more often.. out there in commercial-world.. it's external factors. The number of words that can be made from a set of letters, or the number of times a pair of letters can be typed, do not vary according to client demands, availability of resources, competitor activity etc.

When a team underachieves it can be due to these factors as well as the constituent individuals. The tendency of the members, however, can be to look closest to home to place the blame.. maybe someone didn't work hard enough, or someone didn't prioritise things the best. This creates resentment and biases people against those kinds of incentives. This can negatively impact the behaviour of people who think that their efforts will bear no fruit. This is, perhaps, why it works best in smaller teams, where the levels of co-operation and understanding of roles are better understood and appreciated by all members.

I'd be interested in whether the results of the experiments would change if competition was somehow factored in.


A more general question: is there much research on whether people's calculations involving winning small sums of money are the same as those for large sums? If it's a matter of a few pounds, that's not going to change your life; if it's thousands, then that really could. Is there any evidence that scaling results obtained with pence to the sums involved in banking bonuses, for example, is legitimate?


Forty-five years ago, I started out my working life on a production line. Strangely, even though you rarely talked to people further down the line (because it was a long line and noisy), you felt compelled to do your best because everyone's bonus depended on every link in a very long (and noisy!) chain.


I work at a UK site for a large German corporation, and for a few years now our bonus scheme has been based on the whole site's profitability, with a flat bonus for every permanent staff member. I've always liked the idea of a flat bonus as it gives the lowest paid members of staff the biggest incentive, rather than disproportionately rewarding managers for the labour of their hires.

I've often thought that, further to this, I'd be happy to sacrifice a good proportion of my basic pay (say, 20%) if I could have twice that amount as a discretionary bonus. If my team and I all knew that our efforts would affect each other's pay to that extent, I think it would serve as one hell of a motivator! Maybe I just trust people too much?

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