Why money doesn't always motivate

03/13/2009 | Harvard Business Review

Businesses that use monetary incentives to motivate their employees or customers sometimes find the scheme does the exact opposite. When day-care centers in Israel started fining for late pickups, for example, tardiness shot up as parents began "to think of lateness as simply a commodity they could purchase," economist Samuel Bowles writes. An employer's financial reward is prone to fail if it suggests mistrust of the employee, he writes.

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