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The idea that people are solely self-interested and materially orientated has been thrown overboard by leading scholars. Empirical research, in particular experimental research, has shown that under suitable conditions human beings care for the wellbeing of other persons. Above all, they are not solely interested in material gains. Recognition by co-workers is greatly important. Many workers are intrinsically motivated

When a remote authority sets incentives, people respond by manipulating the system. This fact is poorly understood by education reformers who are fond of pay-for-performance and national standards

The Hayekian story here is that effective compensation practices require local knowledge and tacit knowledge.