Goal Setting and Monetary Incentives

ocean clog the wings, nor too high, lest the heat of the sun melt them. When they flew from the tower, Icarus forgot his father’s warnings and began to soar higher and higher, thinking only of his own excitement and glory. As he flew nearer to the sun, his wings slowly began to soften. One by one the feathers fell, and he plunged into the sea. When Daedalus reached land, he hung up his wings, never to fly again. Like the wings of Icarus, two motivational techniques, goal setting and monetary incentives, have proven extremely effective in motivating higher performance; but also like those wings, these techniques can produce disastrous consequences for those who mishandle them. The purpose of this article is to show how goal setting and monetary incentives can actually work too well and produce counterproductive effects. The analysis is based on research I and others have conducted, as well as on numerous examples from corporate America.