Some research suggests reduced cooperation and collaboration among college faculty may result when annual pay increments are based on merit evaluations. Various theories and principles have been put forward to explain these effects. The overjustification theory suggests that extrinsically presented rewards become more salient than one's intrinsic interests and tend to diminish subsequent interest in the task. Equity theory suggests that when one works hard and receives high pay, production will be increased to reduce the inequity resulting from overcompensation relative to others. Those who perceive themselves as hard workers receiving low reward reduce productivity to achieve equity. The minimax principle suggests that salient extrinsic rewards cause people to maximize the chance of reward with minimum effort. Research has found, for example, that adults and children choose less difficult tasks in order to assure reward. Implications of this research are related to annual merit pay in colleges and universities. (Author/JD)