Research shows that when a task is simple, meaning it doesn't require imagination or complex problem-solving, we can give monetary incentives to increase performance – that is, to increase the quantity of the output. For example, a worker in an assembly line can be paid by the number of parts they assemble instead of per hour of work. As a result, they will feel motivated to increase the number of parts assembled. This type of motivation is what we call extrinsic – coming from the outside – and is the most widely used type of motivation (for example, in the form of bonuses or disciplinary punishment).
Problematically, when a task is about quality instead of only quantity, and when it requires imagination or figuring out complex stuff, simple monetary incentives don't work very well. In fact, several controlled experiments...
