Bonuses Don’t Motivate Developers

“… merit pay emphasizes the direct relationship between job performance and dollar rewards, thereby detracting from intrinsic motivation in the work itself. A system that would switch the emphasis to rewards for self-development and opportunities for greater responsibility would seem to serve both individual and organizational goals in a more effective manner.”

2. Alfie Kohn, author of another book on motivation, wrote in a Harvard Business Review article in 1993:

  • Joel Spolsky, after quoting the above, wrote in 2000:
  • “… any kind of workplace competition, any scheme of rewards and punishments, and even the old fashion trick of ‘catching people doing something right and rewarding them,’ all do more harm than good. Giving somebody positive reinforcement (such as stupid company ceremonies where people get plaques) implies that they only did it for the lucite plaque; it implies that they are not independent enough to work unless they are going to get a cookie; and it’s insulting and demeaning.”
  • Joel again, in 2006, writing about what he calls the “Econ 101 Management Method“:
  • “But when you offer people money to do things that they wanted to do, anyway, they suffer from something called the Overjustification Effect. “I must be writing bug-free code because I like the money I get for it,” they think, and the extrinsic motivation displaces the intrinsic motivation. Since extrinsic motivation is a much weaker effect, the net result is that you’ve actually reduced their desire to do a good job. When you stop paying the bonus, or when they decide they don’t care that much about the money, they no longer think that they care about bug free code.”
  1. Rote, mechanistic tasks: more money works beautifully in that specific case. Which is why we have bonuses at all, because it worked so well in the factories where Henry Ford pioneered the concept of paying workers a better wage for better performance.
  2. Too little money: if workers think they’re not being paid fairly, it becomes a sticking point and all they think about is how they’re being screwed, which obviously prevents them from performing at their full potential.
  1. Autonomy: as a manager, giving your employees autonomy is the best way to get them engaged in the work. He mentions Atlassian’s ShipIt Days as an example of how autonomy leads to great things, and should’ve mentioned Google’s 20% time as well.
  2. Mastery: “the urge to get better at stuff”. This is a big reason why the open source movement exists.
  3. Purpose: an important reason to do what you’re doing. The open source movement ties in here, and also crowd sourced efforts like Wikipedia, but increasingly, companies: Apple, Google, Facebook all have self-invented lofty purposes for their existence, and this inspires their employees.

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