- If you pay people more, it doesn't always make them more productive.
- If you pay people for the work they do rather than the hours they work, it sometimes may increase productivity.
Dan Ariely, whose books I love, explains in one study with his co-authors that increased compensation doesn't always lead to more productive results. In fact, it can make them worse. He points to research that shows, essentially, that when people were incentivized with a little bit of money, they perform well. When they are incentivized with too much money, however, they're more likely to balk and perform worse.
Today I found an interesting paper that studied what happened in an automobile glass manufacturing company when some workers were switched from per-hour pay to per-piece pay. They're productivity increased by up to 36 percent! The author, Lazear, notes that per-piece pay rates are necessarily the right method of compensation in all workplaces, but rather than the method of compensation matters. In the glass factory, ambitious workers had no reason to try and set themselves apart from others when they were paid hourly--but they did when paid per piece.
What I'm hoping to do with the research I find is identify techniques people can use on themselves to increase their own motivation and productivity. I'm sure the techniques will have to vary depending on the goal, but perhaps there are proven ways to keep ourselves on task for small actions that lead to big results, no matter what they are.
