External incentives don't work with programmers

The surprising science of motivation is a very good talk by Dan Pink that explains what most people with (real) experience in the software programming field already know: If someone isn't internally motivated to work on something (for “something” in the set of jobs that require the use of cognitive skills), external incentives such as bonuses won't fix that. Moreover, as demonstrated by studies (look at the video for the details), they often hurt. Joel Spolsky provides a plausible explanation:

“But when you offer people money to do things that they wanted to do, anyway, they suffer from something called the Overjustification Effect. “I must be writing bug-free code because I like the money I get for it,” they think, and the extrinsic motivation displaces the intrinsic motivation. Since extrinsic motivation is a much weaker effect, the net result is that you’ve actually reduced their desire to do a good job. When you stop paying the bonus, or when they decide they don’t care that much about the money, they no longer think that they care about bug free code.”

—The Econ 101 Management Method

So now you have another proven fact that explains why passionate, motivated developers are so valuable. But don't forget to see Dan's talk: it's a very good one and takes less than twenty minutes.