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Metadata of Note

Type: Leaf (Nomenclature present here)

Source: Payoff by Dan Ariely

Date created: 8th April, 2022

Tags: #money #job #work #psychology


[[Dan Ariely]] conducts an experiment at a semiconductor plant at Intel to answer the question of: what’s the best incentive/motivator? Money, pizza, compliment, or nothing?



Employees work for 12 hours/day for 4 days and then get 4 days off. The “productivity” of the work here is very measurable.

They conduct an experiment in the following ways. When an employee hits the target for the day on the first day, they get one of the following:

  • Money: $30 (100 NIS)
  • Pizza: A voucher to buy pizza worth $30 (100 NIS)
  • Compliment: A message from their manager complimenting them, “Well done!”
  • Nothing/Control: Nothing.



The results were interesting on the various days,

  • First Day: Control group performed the worst. Pizza performed the best (6.7% boost in productivity), Compliment was almost identical at 6.6%. Money was just 4.9% boost.
  • After First Day: The interesting thing happened on the second day where Money group’s productivity dropped by 13%. And it kept dropping further on third and fourth days, and productivity was even lower than the control group by then.
    • Whereas folks in Pizza and Compliment group also dropped their productivity, but it was still above Control group.



  • Some incentive is better than no incentive.
  • While #money boosts motivation on a one-day basis, it decreases motivation on a longer-term basis as employees begin to think, “I already worked hard yesterday to get the bonus. Today there’s no bonus so why work hard?”
    • Essentially, money makes work very transactional!
  • We don’t think on a short-term transactional scale: we think on a long-term, more enduring scale. So incentives need to be set in place keeping in mind their compounding effects.
  • We are NOT good predictors of our motivation: In another study by Kaitlin Woodley & Ayelet Fishbach, they found that we tend to focus on intrinsic motivations (the joy of doing it) when we’re performing a task, but overfocus on extrinsic motivation when we’re planning for it (the monetary reward).