I’ve written several times about Daniel Pink’s nuanced analysis of extrinsic rewards — that they can work well in motivating mechanical work, but be unsuccessful in encouraging anything requiring higher-order thinking skills. You can read my previous posts on this topic at My Best Posts On “Motivating” Students.
Another study now reinforces that view. Here’s an excerpt from What Is The Right Amount To Pay Bankers?
We found that as long as the task involved only mechanical skill, bonuses worked as we usually expect: the higher the pay, the better the performance. But when the task required even rudimentary cognitive skill (as we might suppose in- vesting and banking do), the outcome was the same as in the Indian study: a potential higher bonus led to poorer performance.