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rationalnoodles comments on Rationality Quotes September 2014 - Less Wrong
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I don't understand what he wanted to say by this. Could somebody explain?
Instead of giving your employees $100 raise, give them $1200 bonus once in a year. It's the same money, but it will make them more happy, because they will keep noticing it for years.
It'll also be easier to reduce a bonus (because of poor performance on the part of the employee or company) than it will be to reduce a salary.
I say give them smaller raises more frequently. After the first annual bonus, it becomes expected.
Intermittent reward for the win.
http://en.wikipedia.org/wiki/Hedonic_treadmill
Basically what Lumifer said.
I speaks to anchoring and evaluating incentives relative to an expected level.
Basically, receiving a raise is seen as a good thing because you are getting more money than a month ago (anchor). But after a while you will be getting the same amount of money as a month ago (the anchor has moved) so there is no cause for joy.
While you are getting a raise you might be more motivated to work. However after a while your new salary becomes new salary and you would need a new raise to get additional motivation.