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View Full Version : Should a business give out multi million dollar bonuses?




JoshLowry
10-06-2009, 04:34 PM
Most upper-management and sales force personnel, as well as workers in many other jobs, are paid based on performance, which is widely perceived as motivating effort and enhancing productivity relative to non-contingent pay schemes. However, psychological research suggests that excessive rewards can in some cases produce supra-optimal motivation, resulting in a decline in performance.

To test whether very high monetary rewards can decrease performance, we conducted a set of experiments at MIT, the University of Chicago, and rural India. Subjects in our experiment worked on different tasks and received performance-contingent payments that varied in amount from small to large relative to their typical levels of pay. With some important exceptions, we observed that high reward levels can have detrimental effects on performance.


Came across this study (http://ideas.repec.org/p/fip/fedbwp/05-11.html) while watching a Ted video (http://www.ted.com/talks/dan_pink_on_motivation.html).

Funny that the study was done by the Federal Reserve Bank of Boston.

JXL78
10-06-2009, 04:38 PM
I'm strange in that money has never motivated me. Just mere recognition and compliments usually is what drives me forward.

lx43
10-06-2009, 05:35 PM
I prefer cash. lol

angelatc
10-06-2009, 05:41 PM
It's their money, they can fly around dropping it from helicopters if they choose to. It's not te government's job to maximize individual efficiency.