How Monetary Rewards Can Demotivate Creative Works

How Monetary Rewards Can Demotivate Creative Works http://bit.ly/bht4fC Once the basic need for $$ is met, more $$ doesn’t motivate

The RIAA and MPAA constantly claim that no-one would do creative work if they are not super-well compensated by restrictive copyright. Well, not only has that been thoroughly debunked, but the idea of more money – once our basic living needs are met – can be a demotivating factor for creative people.

As people note all the time, you need to be able to make money to survive. But, it’s that once people have a base level of money that makes them comfortable, using monetary incentives to get them to do creative work fails. Not just fails, but leads to worse performance. As we noted in the original blog post about this, my initial inkling was that this highlighted a point often forgotten by economists and non-economists alike: while marginal benefit is often considered in terms of dollars, that doesn’t mean that cash is the the equivalent of marginal benefit. That is, you can’t just replace other benefits with cash. Sometimes people value other types of rewards even greater than the equivalent in cash. And, Pink’s book and presentation highlight how it’s often things like meaning and working on something fulfilling that are much more beneficial to people than cash. So it’s not that money is bad for creativity — but that having a direct pay-for-performance type scheme seems to create negative consequences when it comes to cognitive work (it works fine for repetitive work, however) — and other types of non-monetary rewards are a lot more effective.

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