"Motivation does not come from financial incentives alone. Again, the financial sector has done us all a disservice in promoting the belief that massive financial compensation is necessary to motivate individuals".
So writes Mervyn King, Chairman of the bank of England. about what might levers we might pull to drive up economic activity.
It's worth cutting this out and keeping it.
If you think people only do stuff for money – or even mostly do stuff for money – you'd be wrong.
There are lots of other sorts of reward and disincentives – not least is the social stuff that we go on about [people doing what other people do, for instance].
Put it this way: financial incentives presume that individuals are primarily financial optimisers, acting independently in their own interest. Paul Ormerod makes this point really well in his new book - "incentives" tend to be part of an "individualist" or "I" model of behaviour.
Some people are focused on financial incentives all the time [we call them things like "greedy mothers"], all of us can be taught to be that way [ditto] but…and there's quite lot of evidence that financial incentives can overwhelm other intrinsic motivations in certain circumstances [prosocial behaviour can actually reduce when you pay volunteers].
But – it's far from clear that financial incentives always have a positive impact in shaping behaviour in the desired direction, be it in personal health, charitable activity or criminal activity. Sometimes they actually have a negative effect [as above] becoming the reason why you continue to do something.
So if you're looking to change behaviour, please be careful with financial incentives: they don't work like they say they do [not least because we're not like they say we are] and they can actually work against the desired outcome.
Look for the other – often [pro]social – motivations.
Whatever it is you do, don't just do it for the money…