knowquestion :: Stephen Bounds

Over time, a fixed extrinsic motivator will cease to be effective, and in fact will tend to have a slightly negative effect as people incorporate it into their expectations.

For example, a bonus pay that becomes routine will rapidly be treated as part of the employee's remuneration. Any reduction in the "standard" bonus will become demotivating, even though technically it is an increase over the baseline pay.

This graph visualises that decline in positive impact over time.