Incentives do not work

If you want your employees to perform well, conventional wisdom says that you must give them lots of incentives. Stuff like free phone calls, company cars, gold stars, employee of the month awards are necessary, right? Wrong! Incentives, and the ensuing competition, actually make matters worse, and remove peoples attention from their work. This makes employees less motivated about their work.

According to this article by Alfie Kohn, you should in stead:
* Pay people well.
* Pay people fairly.
* Then do everything possible to take money off people’s minds.

Notice that incentives, bonuses, pay-for-performance plans, and other reward systems violate the last principle by their very nature.

I could not agree more. The whole notion that you can motivate anybody is wrong, and money is certainly not the way. People can motivate themselves, and businesses can create environments in which it is easy or hard for them to do so. Incentives make it harder!