Our most committed readers know that we have summarized the research on "carrot and stick" management and why it doesn't work.  You've read why offering more money actually decreases innovation and motivation.  If you need a refresher on the subject, feel free to check our past articles on the subject (WorkPuzzle 1, 2, 3, 4).

Before I share additional angles on this subject, I want you to know that I don't dislike money.  In fact, I like it very much!  But obsession with money, or using it as a primary motivator has been shown to have unintended consequences that negatively impact our ability to flourish.

In an interesting research paper, Jia Liu, Dirk Smeesters and Kathleen D. Vohs illuminate another interesting fact about money.  Apparently, just introducing the idea of money can have a negative influence on cooperation.

Here is Daniel Pinks description of the research:

"The researchers carried out a sneaky experiment that had two components.  First, they asked their participants to fill out a questionnaire on a computer.  The questionnaire itself wasn’t important.  What was important was the desktop wallpaper.  For half the participants, the wallpaper showed a pattern of shells; for the other half, it showed a pattern of Euro notes and coins.  (In the parlance of social psychology, that second group was 'primed' with money.)

Next, they took the participants and another person of the same gender into a room and gave them a beverage to taste.  This is a new sports drink called Vigor, they told their subjects, and we want your opinion of it for a marketing study.

A minute later, the other person — who was actually the experimenters’ confederate — got up to leave the room, mentioning that he or she had already tasted the drink.  Some of the confederates added, 'This drink tastes really good. I just love it.'  Some said, 'This drink tastes really bad.  I just hate it.'  Some said nothing.

Then came the test:  Did the money prime make any difference in the participants’ opinions about the beverage?

Ample research, especially the extraordinary work of Robert Cialdini, has shown we’re quite susceptible to social influence.  When we hear that other folks like something, we tend to like it, too.  And that pattern held — at least for the people who saw shells in their computer background.  These folks liked the beverage more when the confederate said he or she liked it, and less when the confederate said he or she didn’t like it.

But for the subjects primed with money — again, just some background images of Euros — the response was the exact opposite.  As the researchers write:

'The confederate’s passing comments exerted a backfiring effect on evaluations of the drink among participants for whom the idea of money had been activated.  They liked it more when the confederate said that the drink was bad, and less when the confederate said the drink was good.'

What’s going on?

Liu, Smeesters, and Vohs say that money cues can operate as threats and 'produce contrarian reactions that are the opposite of the source’s intent.'  Other research has shown that being reminded of money can make people more single-minded and more apt to work harder — but also less social, less cooperative, and less likely to help others."

The authors summarize their findings with the following:

"Money has bigger effects on people’s thoughts, feelings, and behavior than simply what it can do as an exchange medium or store of value.  People could behave toward money as if it is the ultimate tool, the quintessential vehicle to get what they want and need.  Yet, often people behave toward money as if it is a drug that possesses an abundance of motivational and reward properties…Mere reminders of it are enough to drastically change people’s preferences for work, play, and interpersonal relationships.”

As a manager, what impact does this information have on your philosophy of where fee splits should enter the conversation?  Yes, it's important to be fair and offer a decent reward for a job well done, but it shouldn't take center stage.  If it does, it will likely produce the opposite result from what you desire.

Editor's Note: This article was written by Dr. David Mashburn. Dave is a Clinical and Consulting Psychologist, a Partner at Tidemark, Inc. and a regular contributor to WorkPuzzle. Comments or questions are welcome. If you're an email subscriber, reply to this WorkPuzzle email. If you read the blog directly from the web, you can click the "comments" link below.