Does Compensation Motivate Performance?

Businesswoman throwing money into air in office3 times it works well … and 2 times it doesn’t.

By Marc Rosenberg
Partner Comp: Art & Science

The Harvard Business Review published an intriguing article on compensation titled “Rethinking Rewards” written by Alfi Kohn, who describes himself as a leading critic of competition.

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Says Kohn: “It is difficult to overstate the extent to which most managers of people believe in the redemptive power of rewards. Certainly, the vast majority  of  companies  try  to  motivate  employees by tying compensation to performance. But research suggests that, by and large, rewards succeed at securing one thing only: temporary compliance. They do not create an enduring commitment to any value or actions. A kick in the pants may produce movement but never motivation. Rewards do not alter the attitudes that underlie our behaviors.”