Income inequality: How efforts to reduce it can undermine motivation – and the pursuit of excellence
Journal of Entrepreneurship and Public Policy
ISSN: 2045-2101
Article publication date: 10 April 2017
Abstract
Purpose
The purpose of this paper is to explain why (based on an extensive body of research findings) efforts to reduce income inequality may have negative effects on motivation and the desire to excel.
Design/methodology/approach
This paper presents the author’s personal perspective on income inequality and efforts to reduce it. However, these views are grounded in extensive literature concerning the nature of “fairness,” and the harmful effects of weakening the link between performance or effort on the one hand, and rewards on the other. Breaking this connection may be especially harmful for entrepreneurs, who have strong beliefs that the hard they work in building their new ventures, the more likely are these companies to be successful.
Findings
The paper presents what, it is hoped, provides a broadened framework within which to examine the causes and income inequality, definitions of “fairness,” and the potential effects of efforts to reduce such inequality.
Practical implications
By weakening the relationship between performance and rewards, efforts to reduce income inequality involving large tax increases may weaken the relationship between performance (accomplishment) and rewards, thus reducing motivation to work hard and achieve excellence.
Social implications
Understanding the negative implications of government-funded programs designed to reduce income inequality helps to clarify the potentially detrimental effects of such programs – effects that are neither intended not expected by proponents of such efforts.
Originality/value
The effects of efforts to reduce income inequality have not previously been examined in the context of their negative implications for human motivation to work hard and attain excellence in any endeavor – implications suggested by a large body of relevant research.
Keywords
Acknowledgements
The author is a Regents Professor and Spears Professor of Entrepreneurship at the Oklahoma State University. However, the views expressed in this paper are solely those of the author and do not in any way represent the views of the University, School of Entrepreneurship, Spears School of Business, other departments or other faculty.
Citation
Baron, R.A. (2017), "Income inequality: How efforts to reduce it can undermine motivation – and the pursuit of excellence", Journal of Entrepreneurship and Public Policy, Vol. 6 No. 1, pp. 2-10. https://doi.org/10.1108/JEPP-07-2016-0028
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited