The Evolution of Motivation
Title: The Evolution of Motivation (with Timothy Besley)
Abstract: This paper studies the idea that reward structures in organizations co-evolve with the motivation of workers. Firms employ workers and choose an incentive scheme. New workers who join an organization are socialized by those who work there already. We study three examples of non-pecuniary motivation: pure intrinsic motivation, mission-based motivation and motivation based on reciprocity. In all three cases there is a complementarity between limiting the use of pecuniary rewards, specifically bonus pay, and creating an incentive to become a motivated agent. We characterize the conditions under which non-pecuniary motivation grows or diminishes over time.