The Yankton brain trust is all about Daniel Pink's well-researched argument that rewards don't motivate performance. LK refers to Pink in my comment section. Nathan Johnson links to this animation of Daniel Pink's lecture on the failure of merit bonuses to drive better results. Governor Daugaard, pay attention:
Pink discusses an experiment done at MIT on bonuses and performance. Researchers found that bonuses did motivate better performance in purely mechanical tasks. However, when tasks involved even rudimentary cognitive skills, bonuses led to worse performance. Concerned that small cash bonuses might not be sufficiently motivational among well-to-do MIT students, researchers conducted a similar experiment in India, where the bonuses were the equivalent of two weeks' to two months' salary (a range in which Governor Daugaard's $5,000 merit bonuses fall). The results in India were similar: individuals receiving medium-sized rewards didn't perform any better than folks receiving small rewards, while the folks getting the highest rewards performed worse.
I know our Governor doesn't believe in empirical research, but Pink says these results have been replicated over and over: For simple tasks, bonuses work. For complicated tasks requiring conceptual and creative thinking (welcome to my day), bonuses don't work. Pink says you get better performance by paying everyone enough to take their minds off money. Governor Daugaard's plan is all about focusing everyone's attention on a competition for money. Oops.
Pink also says the three keys to motivation are autonomy, mastery, and purpose. I'm not sure what the Governor's plan does to encourage mastery, but his state-mandated uniform evaluations certainly don't encourage autonomy. And his bonuses make us think the purpose of showing up for work is competing to beat our neighbor for cash. Again, oops.