Studies have shown that monetary incentives can trigger more effort but can end up hindering performance and that emotions affect performance. However, very few studies have empirically evaluated the incentive–performance relation by estimating the effect of a monetary reward on all three outcomes: effort, emotions, and performance. We estimate the effect of providing a monetary incentive on the cognitive effort, emotions, and performance of a group of university students while solving a mathematics and logical reasoning test. We evaluate the hypothesis that a monetary reward can trigger an emotional response that counteracts the positive effect of increased effort on performance. We use an eye tracker and a facial recognition algorithm to provide direct and objective measures of participants’ effort and emotional response while solving the task. On average, we find that the incentive produces more cognitive effort, induces feelings of surprise and fear, and fails to improve performance. We allow the effect of the incentive to vary according to the participant’s Grade Point Average (GPA) and find that those in the bottom 80% of the GPA distribution responded with the same additional effort as those in the top 20%. However, different from those in the top 20%, those in the bottom 80% experienced a decline in performance that coincided with a shift in anger, surprise, and fear. Overall, these results provide strong evidence consistent with our hypothesis.