The common belief that financial incentives inevitably lead to harder work is a powerful one in the modern workplace. However, decades of psychological research suggest that for tasks requiring creativity and complex problem-solving, monetary rewards can actually have the opposite effect.
This contradiction was highlighted by an experiment in the 1960s, which revisited the original Dunker's Candle Problem from the 1940s. The challenge requires participants to fix a lighted candle to a wall so that the wax does not drip onto the table, using only the candle, a box of tacks, and matches. The non-obvious solution is to empty the box, tack it to the wall, and use it as a shelf for the candle—requiring participants to overcome functional fixedness and perceive the box not just as a container, but as a potential component.
In the 1960s variation, one group of participants was offered a financial reward for completing the task quickly, while the control group was simply timed. Surprisingly, the group offered the financial incentive did not perform as well or as quickly as the group that received no reward. This demonstrated that for tasks demanding creative problem-solving and cognitive flexibility, the pressure of a monetary reward can be counterproductive.
Intrinsic Motivation Over Money
This finding is supported by a growing body of evidence indicating that people do not work for monetary rewards alone. While having a certain level of income is important, beyond that necessary threshold, money ceases to be the primary motivator for performance.
Instead, the key factor is intrinsic motivation. If an individual does not have an intrinsic interest in the work, their creativity and problem-solving abilities will not be as sharp. The financial factor, in some cases, can add pressure that makes it difficult to think outside the box and find creative solutions.
Therefore, while money can incentivize quantity or speed in purely mechanical tasks, it is the internal drive, interest, and sense of purpose that fuels the creativity and ingenuity necessary for complex challenges.
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