When paying more stops paying off

The Washington Post:

Everyone likes money. Ask people who say they don’t care about money if they’ve ever turned down a raise. Wait for the awkward pause.

But money is funny, too. However much it can motivate people to work harder and better, it also has curious—and sometimes counterproductive—effects on their performance. A growing body of research shows that, in some cases, paying people more not only fails to change their behavior but actually makes them perform even worse.

Money can be a surprisingly poor incentive. In a series of large-scale experiments with school children, paying kids a reward of as much as $5,000 to maintain at least a B average had absolutely no detectable influence on their performance in school. Other research has even shown that paying kids for good grades leads to decreased motivation—it can “crowd out” any natural enjoyment they may have had for those activities. Sure, kids like money as much as anyone, but when faced with the choice between opening those textbooks and opening gaming apps, the money failed to make a difference.

Read the whole story: The Washington Post

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