You would think that rewarding people for being good at their jobs would make them better at them.
But social science shows that it doesn't, for a number of reasons.
Why money isn't the ultimate motivator
The go-to cliché for motivation is the carrot and the stick, with the carrot being the sweet reward and the stick the thwapping punishment. But like popular author Dan Pink argues in "Drive," that reward-and-punishment system might work for motivating people to do simple tasks, but it's not so great for getting people to do complex work over the long term.
Psychology research shows that rewards only yield "temporary compliance": your behavior might change for a period, but it'll slide back like so many failed diets. As social scientist Alfie Kohn has observed at the Harvard Business Review, rewards like money, vacations, banquets, and plaques do little in the way of changing people's attitudes. It's the same reason why offering incentives to quit smoking, lose weight, or use a seatbelt are terrible strategies for making long-term behavior change.
"Incentives ... do not alter the attitudes that underlie our behaviors," Kohn says. "They do not create an enduring commitment to any value or action. Rather, incentives merely--and temporarily--change what we do."
Instead, salary is part of what management theorists call a hygiene factor, which also includes status, job security, work conditions, and how your manager treats you. While not having proper hygiene makes people feel demotivated at work, the theory goes, having lots of hygiene doesn't make you more motivated.
"It is plausible to assume that if someone’s take-home pay was cut in half, his or her morale would suffer enough to undermine performance," Kohn continues. "But it doesn’t necessarily follow that doubling that person’s pay would result in better work."
So what actually does motivate people?
Unsurprisingly, the management literature calls them motivators: personal growth, recognition, responsibility, and challenging work.
"Motivation is much less about external prodding or stimulation," management sage Clay Christensen explains, "and much more about what's inside of you and inside of your work."
In other words, the most motivated people aren't the best paid, but those who feel a connection with their work.
As Harvard Business School professor Teresa Amabile has found, a sense of progress is crucial to actually staying engaged. In an experiment detailed in her book "The Progress Principle," she asked 238 employees across seven companies to keep daily diaries of their workdays. She found a pattern:
A close analysis of nearly 12,000 diary entries, together with the writers’ daily ratings of their motivation and emotions, shows that making progress in one’s work--even incremental progress--is more frequently associated with positive emotions and high motivation than any other workday event.
The lesson here? Rather than structuring our workdays (and our employees' workdays) around rewards, we should instead structure them around continual, meaningful progress. For Amabile, the top two factors for supporting that continual progress are catalysts and nourishers. As she explained at Forbes:
The catalyst factor includes events that directly enable progress in the work. Catalysts include things like providing clear goals for the work and providing people with sufficient resources to accomplish those goals ...
Nourishers directly support people’s inner work lives and include actions like showing respect and providing emotional support.
Together, Amabile finds, the catalysts and the nourishers help shape a sense of progress. That leads to motivated, meaningful work for individuals--which makes employees happy and helps companies perform.