Ok, my first thought was that these people are being given tasks which require skill or intelligence. But he gets to that, so cool.

The gist I'm getting is that performance related pay would work in the factory where the job in hand is to operate machinery, or other mundane tasks like picking & packing, basically a great deal of industrial production. According to this research, it starts to fall apart where the job in question is cognitive... where it requires innovation and creativity. I guess smart people perform worse when under financial pressure, and where there's a huge carrot, it distracts them from peak performance. It's an interesting conclusion.

I think the points I am making relating to industry are supported by this research. Mechanical tasks improve in quality with pay.