Why salary bonus and other "incentives" fail to meet their
"It is better not to make merit a matter of reward lest
people conspire and contend."
"Who would have thought that play could be turned into work
by rewarding people for doing what they like to do?"
- Rosemarie Anderson
This article was originally conceived to show that
incentive programs have failed due to inherent management and
personnel problems. The work environments where reward
programs are typically used are also very hierarchical and
politically charged. No matter how many carrots are put out
there, employees can’t get past the day-to-day atmosphere.
In the process of researching books covering the topic, all
I could seem to find were books on how to implement them!
After thinking about it for a while, this seemed very strange.
Where were the books that showed the cold hard facts on the
success of incentive programs?
SixSeconds.org, an organization focusing on emotional
intelligence (EQ, for short), suggests that when “choosing
ourselves” we should “engage intrinsic motivation”.
In addition to motivating ourselves, it is important to
learn how to motivate others. There are many ways to do
so; the most obvious are “extrinsic” motivations. For
example, “If you carry my bag, I'll give you a candy bar,”
is a simple example of extrinsic motivation -- it is a
bribe or a type of commercial interaction. Quite useful at
times -- but it doesn't last. Building lasting motivation
requires a more complex strategy; one that employs both
intrinsic and extrinsic motivation (ideally 60-80% of the
focus is on intrinsic motivation).
I didn’t quite buy the idea that bribes work, so I posted a
question to the EQLeadership and EQThesis lists asking if
anyone knew of solid research in this area. A list mediator,
Josh Friedman, pointed me to the book Punished by Rewards:
The Trouble with Gold Stars, Incentive Plan$, A’s, Praise, and
Other Bribes by Alfie Kohn.
What is the Problem with Incentives?
Researchers have performed hundreds of studies regarding
incentives and, unlike most psychological research, the
results are overwhelmingly conclusive: rewards actually
interfere with motivation and lower morale,
quality, and productivity. So why are there so many books
pushing incentive programs? Frankly, we don’t want (or
know how) to make the tough effort or dynamic thinking that it
takes to encourage others to self-motivate.
Why are managers inclined to use rewards? Managers use them
to get people to do their jobs. "Douglas McGregor (refers to
this) as Theory X: people basically don't like to work and
therefore need to be controlled and coerced ... if we expect
them to get anything done."
In other words, ‘motivating’ people usually means ‘making
them do what you want.’ It is coercive and controlling, and
people respond by rebelling. The rebellion is either direct -
the employee responds by ‘making a scene’, or indirect - the
employee begins a campaign to undermine the manager. And there
begins the endless loop of control and rebellion. The manager
and the employee are so busy with politics that they have
little time to focus on the task at hand. It is not surprising
that neither party recognizes what’s happening… the feedback
loop is rarely obvious: the employee and manager are both good
at not getting caught!
How Can We Get Beyond Rewards at Work?
In truth, the best a manager can do “is set up certain
conditions that will maximize the probability of (the
employee) developing an interest … and remove the conditions
that (constrain).” Mr. Kohn suggests that to do this, managers
need to “attend to three fundamental factors:” collaboration,
content, and choice. But to focus on “the three C’s”, managers
must first remove their impediments.
Firstly, get rid of all rewards. Specifically, get rid of
bonuses and at-risk pay. This will give employees the freedom
to stop worrying about money at work. If people are paid
equitably, they won’t be worrying about their personal life at
work nor will they need to be job hunting. Also, forego all
“recognition” ceremonies, plaques, and certificates.
Recognition sets people at each other’s throats and interferes
with the first “C”, collaboration. Removing these visible
tokens does not, however, relieve managers from providing
feedback. If anything, it suggests that managers must be
observing and communicating with employees constantly.
Secondly, get rid of employee evaluations. "W. Edwards
Deming ... has called the system by which merit is appraised
and rewarded 'the most powerful inhibitor to quality and
productivity in the Western world.' He adds that it 'nourishes
short-term performance, annihilates long-term planning, builds
fear, demolishes teamwork, nourishes rivalry and ... leaves
people bitter.'" In addition, "punitive strategies, such as
holding out the possibility of termination or demotion for
inadequate performance, are counterproductive in the extreme
-- not to mention unpleasant, disrespectful, and in general,
an intrinsically offensive way to deal with other human
beings... punishment typically leads not to improvement but to
defiance, defensiveness, and rage." Again, the optimal
approach a manager can take is to observe and communicate in
an on-going basis.
Finally, “create the conditions for authentic (intrinsic)
motivation.” In other words, the best thing a manager can do
is treat employees with respect. According to the research
anthology Paying for Productivity: A Look at the Evidence,
“Changing the way workers are treated may boost productivity
more than changing the way they are paid.” To begin with,
managers should first ‘observe’. Look for problems that are
impeding their performance and work with them to solve the
problems. Also, managers should ‘listen’. They should take the
time to hear what an employee is saying from the employee’s
perspective. In addition, managers should provide plenty of
feedback. People need a non-confrontational approach so that
they can internalize the things they are doing well, as well
as, focus on the things they can improve. Ultimately, managers
should take a moment to think about the consequences of their
behavior. Is the behavior controlling, or does it improve
collaboration, content, or choice for the employee?
“On most tasks, especially those that involve some degree
of complexity and require some degree of ingenuity, people are
able to do a better job in well-functioning groups than they
can on their own. They are also more likely to be excited
about their work. Both effects are due to the exchange of
talent and resources that occurs as a result of cooperation -
and also to the emotional sustenance provided by emotional
support. People will typically be more enthusiastic where they
feel a sense of belonging and see themselves as part of a
community than they will in a workplace in which each person
is left to his own devices.”
“What is a good job? … It offers a chance to engage in
meaningful work. (A good job) isn’t just that the process of
working provides enjoyment, but that the product being made
(or the service provided) seems worthwhile and important. …
The question is not just ‘Are we having fun yet?’ but ‘Are we
making a difference?’” Even jobs that don’t seem interesting
can be made palatable if offered “a meaningful rationale for
doing it anyway (in terms of its indirect effects, for
example), and giving people as much choice as possible about
how they perform the task.”
“We are most likely to become enthusiastic about what we
are doing … when we are free to make decisions about the way
we carry out a task. The loss of autonomy entailed by the use
of rewards or punishments helps explain why they sap our
(personal) motivation.” One researcher, Peter Scholtes, has
observed, “People don’t resist change, they resist being
changed.” Critics have argued that this is simply managing by
inaction. “The truth of the matter is that creating structures
that support worker autonomy is itself a challenging job.”
The quote from Lao-tzu (the father of Taoism) shows that he
recognized over 2600 years ago a problem that we’re still
grappling with today. It is certainly time for a change.