In a recent field study, Duncan Gilchrist, Michael Luca, and Deepak Malhotra set out to answer a basic question: "Do employees work harder when they are paid more?"
In a famous scene from the film "Jerry Maguire," NFL wide receiver Rod Tidwell repeatedly screams, "Show me the money!" as his agent listens on the other end of the telephone. Intuition might tell us that showing the money motivates, and that increasing an employee's salary should correspondingly boost his or her motivation. It does—under certain conditions. The evolving field of behavioral economics is challenging the assumption that more money inevitably leads to increased effort.
This article was provided with permission from Harvard Business School Working Knowledge.