I just finished reading Drive by Daniel Pink and I must say that it is one of the best business and psychology books I've ever read!
The book discusses what Pink refers to as the "failure of Motivation 2.0." Basically, Motivation 1.0 is to find food, water, shelter, not get eaten by mountain lions, etc. Motivation 2.0 came to be around the time the firm was established. It was a simple matter of carrots and sticks. If you do good things, you get rewards, if you do bad things, you get punishments.
Turns out that this is not a very good way to do things. Indeed, Pink notes an analysis of 51 studies on performance based bonus incentives showed they actually hurt performance.
Pink offers seven reasons these carrot and stick rewards usually fail. The two that stuck out to me the most were:
1) They encourage cheating.
2) They can turn fun or interesting things into what feels like work.
He recommends trying to motivate people by inspiring their "intrinsic interest." This could be by challenging them, offering opportunities to learn and grow, to move up, etc. It's a lot trickier than the old carrot and stick model, but the research shows it is also a lot more effective.
"Every day is a new life to the wise man."
The Righteous Mind
Star Slate Codex
Consulting by RPM