Concept
Overjustification Effect (Extrinsic Reward Undermining Motivation)
motivation incentives management
Adding a financial incentive on top of an activity someone would otherwise do for its own sake — competence, enjoyment, social norms — can reduce motivation and performance rather than improve it, because the extrinsic reward crowds out the intrinsic reasons for doing it well. Bruce Daisley cites this as evidence against a still-common piece of managerial textbook wisdom: that bonuses, commission, and financial incentives reliably improve employee performance.
A London School of Economics review of 51 separate studies on pay-for-performance schemes found that financial incentives can reduce motivation, weaken adherence to fairness and other social norms, and produce a net negative effect on performance (see Financial Incentive Motivation Studies). The same pattern shows up outside the workplace: children offered a cash prize for creating art produced lower-quality, less creative work than children given no reward at all.
Ayelet Fishbach gives the same classic 1970s finding in more detail: children given a certificate and a red ribbon for drawing subsequently drew less than children given no reward, once the reward was removed — the external prize crowded out their sense that drawing was something they did simply because it was enjoyable (the founding study is Lepper, Greene, and Nisbett's 1973 paper — see Lepper Greene Nisbett Overjustification Crayon Study (1973) for its full design). Fishbach's own research with Michal Maimaran extends the effect to health messaging: telling young children (ages 3-5) that a food they already liked was healthy, and would make them stronger or smarter, measurably reduced how much of it they subsequently chose to eat — adding an extrinsic justification undermined a food's existing intrinsic appeal (see Fishbach Maimaran Healthy-Food-Labeling Study).
A live field demonstration, plus its explanatory theory (Episode 288). Richard Wiseman paid one group of BBC volunteers £10 to pick up litter and another group just £2; the well-paid group rated their own enjoyment 2/10, the modestly-paid group rated it 8.5/10, doing the identical task (see Wiseman Litter Payment Self-Perception Study). Wiseman explains the mechanism via Self-Perception Theory: people infer their own enjoyment from observing external cues (like payment size) the same way they infer other people's feelings, rather than through direct internal access.
Discussed in
- Episode 22 — 22- How to be a good boss
- Episode 124 — 124-how-to-stay-motivated-according-to-science
- Episode 288 — 288-what-the-world-s-best-chat-up-line-reveals-about-human-psychology (litter-payment field study; self-perception theory)