The reverse effect of motivation

The science of business decision making: giving out perks doesn’t necessarily lead to results

Research shows that when it comes to cognitive tasks, like decision making, paying people more can lead to worse outcomes. If we want to get the best out of our executives, the ideal amount to pay them is “enough to take money off the table”. Anything extra might excite them, but not in a way that makes them better executives. Put simply, giving a CEO one, two or three million dollars might motivate them. But it doesn’t necessarily follow that they will work any harder if offered four, five or six million. That’s because they don’t really need the sixth million. It does not provide upside motivation, and could have the reverse effect. ….[READ]