The conclusion was clear: paying people high bonuses can result in high performance when it comes to simple mechanical tasks, but the opposite can happen when you ask them to use their brains—which is usually what companies try to do when they pay executives very high bonuses. If senior vice presidents were paid to lay bricks, motivating them through high bonuses would make sense. But people who receive bonus-based incentives for thinking about mergers and acquisitions or coming up with complicated financial instruments could be far less effective than we tend to think—and there may even be negative consequences to really large bonuses.
To summarize, using money to motivate people can be a double-edged sword. For tasks that require cognitive ability, low to moderate performance-based incentives can help. But when the incentive level is very high, it can command too much attention and thereby distract the person’s mind with thoughts about the reward. This can create stress and ultimately reduce the level of performance.
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As it turns out, overmotivation to perform well can stem from electrical shocks, from high payments, or from social pressures, and in all these cases humans and nonhumans alike seem to perform worse when it is in their best interest to truly outdo themselves.
