In an interview with Jessica Gross at Longreads, Dan Ariely explained why money alone — in this case a proposal to pay the top 10% of teachers a bigger bonus — might not improve performance. It goes something like this: If you think that the solution is to give the top 10% of teachers a bonus, it means that you think that teachers know what to do, and the only thing keeping them from doing it is that they are lazy, and they need another motivation. Not only that, but this particular solution requires that every teacher thinks they could be in the top 10%. Because if only the top 10% think they could be in the top 10%, it will not motivate the bottom people. So, people need to be over-optimistic in this scenario.
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