Extrinsic motivation (by giving bonuses) can crowd out intrinsic motivation. Hence, it should only be used when the additional extrinsic motivation overcompensates the loss of intrinsic motivation. That is most often the case when there is no or not much intrinsic motivation, for example, at assembly lines.
RE: Do Bonuses and Penalties Pay Off? Social Experiment on Employee Behaviour - by chrisadventures
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Do Bonuses and Penalties Pay Off? Social Experiment on Employee Behaviour - by chrisadventures