It seems obvious that to build effective organizations, incentives have to be aligned with the desired outcomes. For example, we should give big bonuses to those with the best performance. As Daniel Pink observes in Drive, it’s more complicated than that:
Enjoyment-based intrinsic motivation, namely how creative a person feels when working on the project, is the strongest and most pervasive driver […] Rewards can perform a weird sort of behavioral alchemy: They can transform an interesting task into a drudge. They can turn play into work […] Try to encourage a kid to learn math by paying her for each workbook page she completes – and she’ll almost certainly become more diligent in the short term and lose interest in math in the long term. Take an industrial designer who loves his work and try to get him to do better by making his pay contingent on a hit product – and he’ll almost certainly work like a maniac in the short term, but become less interested in his job in the long term. […] This is one of the most robust findings in social science – and also one of the most ignored.
Nehaveigur 