Well make up your damn mind – do rewards motivate or don’t they?

MotivationFor a long time, rewards were the be-all and end-all of motivation. Everyone knew that the way to encourage people to achieve better results were to reward better results. Bonuses, incentive schemes and pay grades were created to implement this.

Then science starts interfering and pointing out that, actually, rewards only motivate in a very narrow set of circumstances and that there is a huge gap between what science knows and what business does. That’s what Dan Pink talks about in his excellent TED presentation.

Now the effect of rewarding students for performance and good behavior in schools have been tested very rigorously and the results appear in this excellent Time article, according to which some rewards do lead to better performance.

So which is it? Do rewards motivate us to shine or don’t they? This is not only interesting for schools, the findings may apply to businesses as well.

Some background:

A Harvard economist named Roland Fryer Jr. did something education researchers almost never do: he ran a randomized experiment in hundreds of classrooms in multiple cities. He used mostly private money to pay 18,000 kids a total of $6.3 million and brought in a team of researchers to help him analyze the effects. He got death threats, but he carried on. The results represent the largest study of financial incentives in the classroom — and one of the more rigorous studies ever on anything in education policy.

The results were surprising:

The experiment ran in four cities: Chicago, Dallas, Washington and New York. Each city had its own unique model of incentives, to see which would work best. Some kids were paid for good test scores, others for not fighting with one another. The results are fascinating and surprising. They remind us that kids, like grownups, are not puppets. They don’t always respond the way we expect.

In New York the study resulted in no improvement in test scores. Fryer called the results “as zero as zero gets.” New York was ironically the city where students were rewarded for better test scores.

The program that got the best results was in Dallas:

Schools in Dallas got the simplest scheme and the one targeting the youngest children: every time second-graders read a book and successfully completed a computerized quiz about it, they earned $2. Straightforward — and cheap. The average earning would turn out to be about $14 (for seven books read) per year.

So what might explain the difference? Why did one scheme fail while another got results?

I think the answer might lie in the fact that the NY scheme rewarded results while the Dallas scheme rewarded the process, ie. the actual steps towards the results.

I’m going out on a limb here, but I do think that this carries directly over to the business world. At work it is more motivating to reward effort rather than results because while results are rarely directly under your own control, your efforts are.

In other words, you can work your butt off on a project or a sale and still not get it because of factors completely outside of your influence. Or in the current crisis, you can work hard to meet your sales budget, but there’s no hope in hell you will, because the entire market is down 15%. Conversely, you might be a no-good, talentless slacker but due to a general increase in the market or one windfall client you still reach your goals for the year.

This is what Srikumar S. Rao talked about at our last conference, where he encouraged the audience to focus on the process, not the outcome.

Go read the whole article at Time.com – it’s fascinating stuff.

Your take

What do you think? Do rewards motivate you? How and when do you like to be rewarded? Are there any circumstances where rewards tend to demotivate you? Please write a comment, I’d love to hear your take.

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16 thoughts on “Well make up your damn mind – do rewards motivate or don’t they?”

  1. You hit the nail on the head…. “At work it is more motivating to reward effort rather than results because while results are rarely directly under your own control, your efforts are.”

    Humans can only control behavior – not outcomes. As managers and leaders we need to fully understand that concept if we are to effectively influence behavior in our organizations – and that is what properly designed reward programs do – influence behavior.

    There has been a lot of negative press around incentive and reward programs because we’re seeing evidence that they cause bad outcomes – Wall Street being one of the biggest examples of poorly design programs going wrong.

    The reason we have conflicting evidence on whether incentives and rewards work is that we’re not comparing apples to apples. In every case where incentives work poorly the design was poor. When they work – the design is good.

    The problem is we are blaming the tool not the practitioner. I can safely say that in every case of bad outcomes the program was designed poorly.

    I’ll probably be saying this until I retire (which is probably never) – In any surgery whether it results in a good or bad outcome, we never focus on the scalpel – we focus on the surgeon.

    Reward programs are the same – they are simply tools. Blame the practitioner/designer – not the tool.

    Thanks for advancing the conversation.

  2. The best motivator I ever had on a job was my boss, who would appear in my office about every week to 10 days and say something like “I just wanted to let you know, I really appreciate the good job you do for us”.

    I was often dumbfounded. I sometimes wondered what I had done right, but it always gave me a glow.

    My current boss often lets out an enthusiastic “YAY!!” when I hand in a project. She is my 2nd favorite boss of all time and a lot of it has to do with this simple, no-cost motivator.

    In both cases I think the reactions they had are part of why I feel/felt I can go to them when I am stymied and ask for advise on how to proceed, without feeling like a failure.

  3. Couldn’t agree more. My career started in pharmaceutical sales, where bonuses were paid on market share growth. The problem is, at best a pharmaceutical salespersons efforts only affected 25-30% of the results. Not exactly motivating.

  4. The insight that it is better to reward process than results runs contrary to the prevailing leadership wisdom, which says that you should aim people at results (through rewards and accountability) and give them the freedom to find their own way to achieve them.

    I think the truth is somewhere in between. People need to know the result they are aiming for as well as the key behaviors to get them there. If you reward for behaviors, the connection between the desired result and the behavior needs to be clear, otherwise you might get the behavior, but not the result.

  5. Came here through twitter and ow.ly. Retrying as it looks like my comment did not post.

    Daniel pink points out what science knows and business ignores, that the motive power of rewards and incentives can support completion of narrow tasks and derail finding solutions to more complex challenges.

    Kaizenblog mentions to focus on the process, not the outcomes.
    http://www.conversationagent.com/2009/07/kaizen-and-blogging.html

    Slow down to gain understanding of the bizarre domain in the world. #context

    #1h

  6. Exactly the right takeaway from the article and the Dan Pink book. Think of it this way – rewarding outcomes = incentives. Rewarding the process = recognition.

    That’s why, in most instances, we strongly advocate for behavior-based employee recognition that is focused on company values. In such programs, any employee can be recognized (preferably frequently, specifically and in the moment) for demonstrating behaviors that reflect your company values in contribution to achieving your objectives. Sure, they can be recognized when the final deliverable is realized, but it’s just as important to recognize them along the path when they consistently and sometimes extraordinarily contribute to the coming success.

  7. Agree with Derek. In my experience rewards represent only a short term satisfaction and also become sort of an expectation – almost in a Pavlovian response sort of way.

    I am absolutely for rewards, but they are part of a trade. I (the employee) work for you (my employer/my manager), so you pay me in return. I give a little extra (hard work/great results), so you give me a little extra, too (rewards). Rewards are an after-the-fact display of recognition and they compensate me for the past; they don’t motivate me for the future (at least not in a sustainable way).

    Where it becomes motivating, is when you (my employer/my manager) give first (“before-the-fact recognition”): When you give me trust, respect, the training and tools I need to achieve great results, a positive attitude, encouragement; – when you recognize my needs; when you recognize my ambitions and skills and you show interest in my wellbeing – then you motivate me to be engaged and contributing to your (the employer’s/company’s/manager’s) wellbeing as well, by giving my best.

    It’s a bit like standing in front of a fire place and saying “Give me heat!” And the fireplace says, “Well, give me wood!” And you say “No, show me first that you can do it!” :) The fire place can only produce great results when you “give first” and support the process.

    Anja

  8. I believe rewarding progress is a much better motivator than results because I generally reward myself for every little step along the way. To me forward progress is worth celebrating, even if it’s a mental pat on the back. Feeling good about progress brings out a feeling of accomplishment which carries through to the end.

    Interesting study. I appreciate you sharing this with us,
    Val

  9. Interesting research. Part of the challenge is that people are motivated by different things. In the two cases mentioned here the requirements were given to the students. In one case they need to score well on tests and in the other they need to complete the task. I certainly don’t have the miracle formula for motivation but I have noticed that regardless of pay the people that I have worked with usually seem to perform better and are more engaged when they are working on a project that seems to be going somewhere. Steady progress is a great motivator. Additionally, feeling like they have some ownership over how the project is going to be done makes a difference in motivation as well. I’ve seen high paid and low paid folks dragged down by a poorly defined project or one that had little hope of succeeding and I’ve seen those same folks get really excited when they were working on something that was moving forward.

    Thanks for the information!

  10. you see, it can be different for different jobs too.

    I m in a sales job, so I can basically see my results with efforts that I make. If I just focus on the process and not the outcome, my managers will not keep me in the company anymore, coz in sales, they want results.

  11. The best motivation in the world is called Attitude Motivation as taught by the late great Paul J Myer of SMI. When you align the goals or yours or someone who works for you with the mission/vision of the business you will have true and lasting motivation. Values aligned with vision is always a win-win for everyone concerned.

  12. I have reached a point in my professional and personal life where I might even reward myself for accomplishing small goals and often with positive thought! A little hard work pays off. It was all part of my whole plan to motivate myself more and get to places faster. If I get up with the alarm and hit the floor running even, my reward is realizing how great it is to be alive and to be able to walk! Might seem silly but it works wonders for me.

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