It's funny how employers want intrinsically motivated employees but simultaneously believe employees will perform better and be happier if they are given bonuses. Though we all need our paycheck in this world, does it drive our performance, and does it help us thrive at work? A lot of research seems to show that pay-for-performance does improve performance.
But what this research has not taken into consideration is that more complex jobs (for example, demand expertise knowledge, the processing of a lot of information, and problem solving) and that offer more autonomy in decision making (for example, managerial roles) are remunerated at higher levels and tend to be remunerated based on meeting performance targets (for example, bonuses).
This implies that the research showing pay-for-performance improves performance may have missed an important confound: the design of the job. We know from past research that work design has substantial effects on work motivation. To determine if it is the pay or the motivating design of the job that determines performance and affects well-being, I collaborated with researchers in Australia and Europe to find the answer.
Please select this link to read the complete article from Psychology Today.