Moving Management Away From Incentive Plans and Towards Intrinsic Motivation
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A popular practice in management is to offer financial incentives to employees. The promise of rewards is supposed to be an effective motivating force but rarely examined are the cognitive effects that incentives have on employees. While productivity may be temporarily boosted and employee satisfaction will rise for a period of time, incentives are powerful modifiers of behavior and the effects are both fleeting and misunderstood. It has been discovered that rewards act as bribes and can cause employees to form bad habits in order to receive the rewards. This calls for a re-evaluation of the premise behind why incentive plans fail, and restructuring the way management motivates employees will have important implications in employee satisfaction and productivity in corporate America.