Motivation and Incentives

The employees’ motivation strongly influences their performance and can be one of the key factors for organizational success. But how can organizations use incentives in a specific and effective way? How much can intrinsic incentives and leaders’ behavior increase the employees’ motivation? A leader’s behavior has been proven to strongly affect their employees. Our research has shown that control can have negative effects on the employees’ motivation; however, praise, e.g. awards, positively influences motivation and consequently performance. While employees perceive the decision for control as a sign of mistrust, social recognition by awards – either symbolic or monetary value – has a positive effect.

Reference:

• Kosfeld, M. & Neckermann, S. (in press), Getting More Work for Nothing? Symbolic Awards and Worker Performance. American Economic Journal: Microeconomics.
• Kosfeld, M., & Falk, A. (2006), The Hidden Cost of Control, American Economic Review, 96, 1611-1630.