Why Cash is a Less Effective Incentive
Common wisdom to increase production would dictate a change in the monetary compensation plan. Pay more cash and get more results. Everyone likes money - it is a simple and rational choice. And if money is so desirable, why not use it as a reward to induce more desired behavior? Many corporations do just that. It is undeniable that money works to drive behavior, and money used as an incentive yields positive results - up to a point. The fact, however, is that money is not the optimal reward to get extra effort from people.