Preciate Blog | Relational Wealth

Why Financial Incentives Can Reduce Motivation

July 8, 2019 / by Lydia Stevens posted in recognition, happiness, employee recognition, employee performance, motivation crowding theory

Whether it be in the office or at school, people tend to think financial incentives would make them or their team work harder. If only you could get paid directly for putting in that extra effort, and perhaps your overall performance would improve as a result of the additional motivation. And sometimes, especially when the reward is big enough, that is what happens. The opportunity to earn more money for improved performance presents itself, and thus, performance improves.

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