jump to navigation

Perverse incentives 17 May 2009

Posted by cooperatoby in Uncategorized.
Tags: ,

The BBC World Service today reported research done by Duke University in the USA, which shows that higher incentives lead to worse, not better, performance. The experimenters took three groups of people and offered them a reward for performing a task well. The first group was offered a day’s pay, the second two weeks’ pay, and the lucky third group six months’ pay (they carried put the experiment in rural India, where they could afford it). The findings are totally counter-intuitive, at least to today’s economists. While there was no difference between the two less-incentivised groups, the third, golden-handcuffed group, scored not better, but worse!
Why should that be? The research leader theorises that two effects are at work: an incentive effect makes people want to perform better – but a countervailing stress effect means that when so much is at stake, people can’t focus on the task at hand at all! Good to know we are on the way to understanding that the intrinsic value of the job is more important than the reward.


No comments yet — be the first.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: