Section Five
and boring) tasks than for intrinsic (i.e.,
challenging and interesting) tasks. Presumably, if
financial incentives erode intrinsic motivation, we
would find them to be negatively related to
performance for intrinsic tasks. The data show
otherwise. It doesn’t matter what kind of work
people are doing—incentives improve
performance... Taken together, then, the hard
data are unambiguous—financial incentives
improve performance quantity; they do not erode
intrinsic motivation.^5Highly experienced executives who are compensation
experts with the Hay Group have reached a similar conclusion:
Deming is right in touting the merits of intrinsic
motivation. Indeed many organizations have
stifled that aspect of performance—and they have
often done it through lousy pay and performance
management strategies, as well as bad
supervision and bureaucratic administrative
practices. But to say that all extrinsic rewards are
therefore bad is to miss the point. The fact is, a
well-designed compensation program that is fully
and properly aligned with an organization’s values