Making Rewards Work

Article courtesy of SBAM approved partner, AdvanceHR

At least two dozen studies over the last 30-plus years conclude that people who expect a reward for doing a job do not perform as well as those who expect no reward at all. If this is the case, why are so many employers still using incentive programs?

Steven Kerr, vice president for corporate leadership development and chief learning officer at the General Electric Company (GE), explored this subject as editor of the book Ultimate Rewards — What Really Motivates People to Achieve.

If so many managers are in search of the right motivational rewards, why do they so often fail? Most would quickly agree that the “Carrot and Stick” is the dominant philosophy of motivation in America. Picture in your mind the carrot and the stick, what is the central figure in the picture? Most often it is a donkey. The resulting attitude is that management is dealing with someone who must be manipulated and controlled. Is it any wonder these programs lack the desired results.

Do rewards work?
The answer depends on what we mean by ‘work.’ Research suggests that, by and large, rewards succeed at securing one thing only: temporary compliance… According to Kohn, incentives in the workplace simply can’t work.”
– From Ultimate Rewards: What Really Motivates People to Achieve

Alfie Kohn, a contributor to Ultimate Rewards explained it this way: Punishment and rewards are two sides of the same coin. “Do this and you’ll get that” is no different from “Do this or here’s what will happen to you.” Not receiving an expected reward is the same as being punished. Whether the incentive is withheld deliberately, or simply not received by someone who had hoped to get it, the effect is the same.

Kohn also asserted: Forcing people to compete with each other for rewards and recognition can destroy co-worker cooperation. For each person who wins, there are many others who carry with them the feeling of having lost. The more the reward is publicized, the more detrimental it can be.

Rewards should be capable of promoting both equity and efficiency, equity meaning the reward is approximately related to job performance. Rewarding for efficiency is often thought of as paying for past performance, but may be thought of as invigorating future performance. Keep in mind that most incentive programs also hold clear potential for enforcing dysfunctional behavior as well. For example, a reward for personal initiative may discourage teamwork. Or a reward granted to someone perceived as less deserving may illicit a negative feeling among the most productive.

Sometimes being a large company is more of a hindrance than a help. Companies that have finances available for financial rewards often overlook the non-financial rewards. Those companies that do not have the money to give financial awards often use non-financial rewards and often have better results.

Many employers are having success with team rewards. Kerr pointed out that “teams are made up of people…any reward that you can give to an isolated person you can give to a team, with the probable exception of promotions.”

Most managers assume that money heads the list in motivating subordinates, but studies show that pay typically ranks fifth or sixth. If money doesn’t motivate them, what does?

The secret is not to worry about what you are going to use for rewards, but who you are going to reward. When you determine who you are going to reward, finding the reward is easy.

“If you think you have a reward problem, it’s really a measurement issue. If you think you have a measurement problem, you really have a definition issue,” said Kerr. He suggested focusing on how a good performer behaves. “At GE, we always try to convert the roles and goals into behavior. If you want risk takers, ask yourself “What does a risk taker do that a person who is not a risk-taker wouldn’t do?” said Kerr.

Kerr also advised not to measure traits or values, such as “Sally relishes change, Harry doesn’t” Instead, convert traits into behaviors by asking yourself, “What will Sally do that Harry won’t do?” If a person with a particular quality acts the same as the one who doesn’t have that same quality, how can that quality be performance related?

What’s the solution? Change your way of thinking about people. Find out what your own assumptions are about what makes people tick. Then take a good look at your organizational structure.

Are your employees properly trained to perform their tasks? Do your employees know what is expected of them? Do your rewards ensure that there is “something in it for everyone?” Are your rewards equal to the effort that it takes to achieve them? Does your incentive program encourage innovative thinking and creativity?