[youtube]http://www.youtube.com/watch?v=u6XAPnuFjJc[/youtube]

Incentives like employee bonus pay, app badges, student grades, and even lunch with President Obama are all the rage. Despite their widespread use, most research finds that incentives are terrible at improving performance in the long-run on anything but mindless rote tasks, because the fixation on prizes clouds our creative thinking. However, a new Harvard study of teachers found that a novel approach to incentive scould dramatically improve student performance: give teachers a reward upfront and threaten to take it away if performance doesn’t actually improve. Exploiting the so-called “loss-aversion” tendency could open the door to creative incentivizing for software designers and managers.

Continue reading… “Researchers at Harvard find creative way to make incentives work”