Employee reward discourage risk-taking

rewards Thousands of companies all over the world use employee reward programs, thinking that they will motivate their employees to achieve higher productivity. Unfortunately, the effect is quite the opposite… employee reward programs tend to destroy the quality of employee performance. I want to explain this to you in my blog post.

“It is better not to make merit a matter of reward less people conspire and contend.” Lao-Tzu

In his book, “Behaviorism, Science, and Human Nature”, Barry Schwartz defends that rewards change the way employees engage in a given behavior. Usually, our focus is narrower when no rewards are present.

Employee reward programs give people the incentive to do just what is necessary in order to get the job done and nothing else. When people are working for rewards, they tend to take fewer risks than if rewards were not present. They usually don’t play around with different possibilities or follow any hunches that might not give them anything back. They stop becoming risk-takers because the objective shifts from doing the job to getting the reward. This is justified by Pittman et al. (1982, p. 790).

This attitude is a huge problem for creating educational environments. People learn from experimentation, so when companies have employee reward programs, they create environments where learning and innovation generally disappear.

People that work for rewards don’t want to get negative results; they want to be successful as fast as possible. In his book, Schwartz states that, “Once one finds some response pattern that works reliably [to secure a reward], it is pointless, even foolish, to deviate from it.”

John Condry actually says that rewards are the enemies of exploration. You can find more information in his article here.

When we have employee rewards, our goal is not necessarily to succeed at the task… we don’t care if we do it well or not. Instead, our objective is to get the reward. If we could get the reward without even needing to perform the task at hand, we would do it. This was proven by Kenneth O. McGraw and Jirina Fiala in their article “Undermining the Zeigarnik Effect: Another Hidden Cost of Reward”.

For the conclusion, I am going to quote Alfie Kohn from his book “Punished by Rewards”:

“‘Do this and you’ll get that’ makes people focus on the ‘that,’ not the ‘this.’ Prompting employees to think about how much will be in their pay envelopes, or students to worry about what will be on their report cards, is about the last strategy we ought to use if we care about creativity. We can summarize this discussion as follows: Do rewards motivate people? Absolutely. They motivate people to get rewards.”

This blog post is part of my new book that I am writing: Get Rid of Performance Reviews, if you are interested in the topic please subscribe as a Beta Reader and receive the 1st part for free right HERE.

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  2. Pingback: Organisational structure: Matrix Org. harm your company

    • WilliamHic
    • May 6, 2016
    Reply

    I cannot thank you enough for the forum post.Much thanks again. Great.

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