Human Behavior - How “fear of loss” can bring out hidden potential?

The management of a factory in China asked consultants to design a better incentive bonus system.

Most of the consultants suggested fine-tuning the amount of bonus, but two behavioral economics researchers worked purely on the language of the letters through which workers were informed about their bonus.

As an experiment, one group was told that if they met certain targets, they would get a certain amount of money as a bonus.

Another group was told that they had provisionally been awarded a certain amount of bonus based on their capabilities. However, if their work fell below certain targets, then they would lose the bonus.

In reality, the two schemes were identical.

As researchers had suspected, workers who had been given the provisional bonus were much better at meeting the targets.

The fear of losing something you already have is much stronger than the motivation to gain something new.