Can anyone remember an effect where if you underpay someone they turn out to be less motivated to work than if you hadn't paid them at all (at least in some circumstances? Or did I just invent that?

Yes -- one of my upper-level managers mentioned it. He said the finding was that when you use pay too much as a carrot, then the intrinsic motivation of the task is diminished, and people enjoy it less.

Calvin and Hobbes quote: "It's only work if somebody makes you do it."

That might be something different - I'm thinking of a specific effect where you effectively get a dip in performance between offering 0 and offering some 'adequate' amount, whereas I think the effect you're talking about is a reduced benefit from offering any amount of money at all. Still, do you have a reference? I need to read up on it...

He was referring to an "adequate" amount as well. He said with researchers, it often works best to pay them enough that they're satisfied but not so much that they start working just for pay. I know not the citation, but your favorite search engine probably does if you ask it the question nicely. (Make sure to say "please" and "thank you.")

You're probably thinking of the work on cognitive dissonance theory. You may want to look into the related topic of self-perception theory.

I'm not sure about the "less motivation" or "more motivation" part, but there were a couple famous studies that were similar. One study on cognitive dissonance is summarized here: http://www.simplypsychology.org/cogniti ... nance.html

Some students performed a really boring task. The experimenter then offered either $1 or $20 (in around 1959) to tell the next person that the task is really fun (in other words, tell a lie). The people who were paid $1 to lie were asked after the entire study about the original task, and they said that the original task was relatively enjoyable. The people who were paid $20 to tell the lie told the experimenters after the study that the original task was relatively boring. People who got only $1 (theoretically) believed that the money alone would not have motivated them to lie, so they convinced themselves that they voluntarily did the task and made themselves feel better about it by telling themselves that the original task was fun.

There was another series of studies, the Hawthorn studies at Western Electric, revealed the observer's paradox. The original study was quite long and had many parts. They did things like adjust the lighting levels and measure changes in productivity. The workers were aware that they were being studied, and the experimenters would interview the workers and heard some of the grievances about the original working conditions. Workers in different parts of the factory spontaneously perceived a competition related to productivity and really worked hard. Some combination of the observation and hearing of grievances made the workers feel better about their jobs, and they greatly increased productivity even when lighting and other objective conditions were objectively worse. For social scientists, the study was a warning that you might *think* that you are changing one thing (lighting levels) but your presence in the environment can also have strong side-effects.

I believe you're thinking of the overjustification effect.

MTGandP wrote:I believe you're thinking of the overjustification effect.

You nailed it, MTGandP. Thanks!

Dan Pink had a pretty good TEDTalk on this phenomenon.