Preposterous Thinking

Dan Pink makes several great points in his Ted Talk about why extrinsic, contingent motivation doesn't work on employees.  His point is that rewards narrow our focus and restrict possibilities.  Tests have proven that when tasks call for rudimentary cognitive skill a larger reward consistently leads to poorer performance.

There is a fundamental mismatch between what science knows and what business does.  Extrinsic motivation results in poorer performance yet organizations continue to utilize reward systems as motivation.  Dan proposes utilizing a intrinsic reward system built on the concepts of autonomy, mastery and purpose to produce better results from employees.

Autonomy:  The urge to direct our own lives.
Mastery: The desire to get better and better at a specific task.
Purpose:  Yearning to do what we do in the service of something larger than ourselves.

Progressive companies should consider crafting their culture around these three concepts if they want to push the boundaries of innovation.