Classical thinking says that rewarding individuals with high pay will bring about the highest performance and buy the greatest talent; but new science says that may be outmoded thinking.
Some social scientists say motivating people with excessive salaries may have consequences, including limiting innovation, encouraging short-term risk taking and discouraging loyalty.
Author and former Al Gore speech writer, Dan Pink, says that non-material incentives, such as the opportunity to do good work or engage intellectually, may motivate people to think more creatively and solve more complex problems in the modern world.
In this latest installment of Making Sen$e NewsHour correspondent Paul Solman, talks to innovators in the field to see how people are motivated in the current markets.
"If you offer me a reward, $500 reward, you have my attention, absolutely. A contingent reward gets you to focus like this, narrow vision. If the answer is right in front of you, that's terrific. You race a lot faster. But if you have this kind of vision for a creative conceptual problem, you're going to blow it. You're not going to do anything good." Daniel Pink, author "Drive"
"We find that money often disrupts relationships. It disrupts customer efforts. And, sometimes, it makes the customer feel like a piece of meat, where you can't trust the salesperson's recommendations. And that's a very slippery slope at that point." Maury Weinstein, CEO, System Source
"You know, you need adequate compensation. You have to live. You have to survive, OK? But, if you ask an artist why they became an artist, a lot of them will say, I can't do anything else. I have to do this. It's the same thing here, you know? It's the fulfillment, the love of doing it is reason enough." John Yodsnukis, Open-Sourcer
1. What motivates you to do good work? How do you know?
2. How does money motivate people in their daily lives? in their careers?
1. Does Dan Pink think material incentives have no effect?
2. Why does Dan Pink think we now need MORE than material incentives?
3. Are you more left or right brain? What's your evidence?
4. When you think about your career, what do you want to be your motivation?
5. If you were a business owner, how would you motivate your employees?
Read the transcript: