In April 2017, economists at LSE looked at 51 studies of pay-for-performance plans, inside of companies. Here's what they said: "We find that financial incentives can result in a negative impact on overall performance."
There is a mismatch between what science knows and what business does. And what worries me, as we stand here in the rubble of the economic collapse, is that too many organizations are making their decisions, their policies about talent and people, based on assumptions that are outdated, unexamined,and rooted more in folklore than in science. And if we really want to get out of this economic mess, if we really want high performance on those definitional tasks of the 21st century, the solution is not to do more of the wrong things, to entice people with a sweeter carrot, or threaten them with a sharper stick. We need a whole new approach.
