We interviewed hospital leaders and unit nurses in twenty-five hospitals between June and October 2008 to explore the effect of performance-based incentives. Interviewees expressed favorable impressions of the impact that incentive policies have on quality and safety. However, they raised concerns about the policies' effects on the nurse workforce. Their concerns included the belief that performance-based incentives would increase both the burden and the blame for nurses without corresponding improvements in staffing levels, work environment, salaries, or turnover. To maximize the intended policy impact without jeopardizing the workforce that holds the key to their adoption, we recommend that policy makers invest in implementation support, redesign hospital incentives to reward teamwork, and involve nursing leaders in the design of future incentive policies.