The Evolution of Motivation and Incentive Systems Research: A Literature Review

Abstract

Theories on incentive systems and motivation have changed dramatically since the turn of the twentieth century. They started out by viewing the worker as inherently lazy and opposing work which gave birth to piece-rate and cash-bonus systems. Around mid-century, scholars adopt a different view, in which the worker is seen as having different and more complex needs than just money. They find that workers want interesting projects, recognition by co-workers and superiors, and to grow, both in the job and as a person. Cash bonus systems are found to be harmful if improperly organized. Intrinsic motivators are shown to be superior to extrinsic ones and more valued and managers are encouraged to adopt incentive systems that take such motivators into account. Incentive systems can have a big impact on the successful adoption of strategy and a link has been found between the two. The future of this type of research lies within exploring non-monetary rewards in various contexts, designing alternative incentive systems and researching their applicability in business as well as linking application of incentive systems to the evolving research agenda in business research.