I’m about halfway through a book called Drive, by Dan Pink. It’s a paradigm shifting book which basically says everything we thought we knew about motivation is wrong, especially as it relates to money and using the “carrot and stick” approach to managing. His premise (and supported research) says that money really only works as an incentive if the task being performed is very routine and mechanical (think assembly line), but that if the task requires any creativity at all, monetary incentives actually work AGAINST achieving the goal. For people performing creative tasks, Pink argues the key motivating factors are autonomy, mastery, and purpose.
Check out this great video that summarizes the concepts of the book in a really entertaining way: