When Good Incentives Go Bad

The problem with incentives is that if you get them wrong, you won’t get the result you’re looking for, and you might even encourage behaviors that are counterproductive, costing you time and energy. Even worse is when someone gets too dependent on an incentive the motivation disappears. Ever had a dog that only behaved if you gave them a treat? Parents do this with their kids, inadvertently teaching them that the only reason for doing something is an external reward. In the marketplace, over-reliance on incentives can be just as bad as it can encourage unsustainable business models that collapse when the incentives change or disappear.[…]

It’s a common practice to try to encourage or change behavior with incentives. Parents do it all the time. Have you ever agreed to do something for the reward that was promised upon completion? Finished your dinner so you could have ice cream? Or as Pink Floyd famously sang […]