More performance for more money?

How rewards become a trap

Rewards are a popular way to boost motivation in a team or company. The underlying assumption is that a reward increases commitment. However, as studies have shown, this approach, if applied incorrectly, can have the opposite effect.

Thought experiment: Imagine you're helping a good friend move. You've taken half a day off work for this. You're working like crazy, but it looks like the move won't be finished in the allotted time. Then, your friend generously offers you €20 if you work faster. How would you react? What feeling does this offer evoke?

This thought experiment reveals several connections. The well-intentioned reward carries the significant risk of being perceived more as a reproach than as motivation. Thoughts like, "He probably thinks I only work hard for money," or "He doesn't see that I'm already giving it my all," quickly arise. Furthermore, the offered reward immediately provokes a cost-benefit analysis. You could have earned significantly more in the same amount of time with less effort if you had gone to the office. Moreover, intangible contributions, such as high commitment and loyalty, are practically priceless. Attempting to pay for such contributions shifts the balance of giving and receiving to the material realm. This usually leads to a decrease in intangible motivation.

Offering a reward when the limits of what is reasonable have been reached or even exceeded reinforces the feeling that efforts are neither seen nor appreciated. In this way, a reward can be perceived as a veiled threat or reproach. This risk is particularly high in projects that push teams to their performance limits.

The desire to motivate intangible qualities like loyalty, commitment, or creativity with material incentives can lead to these virtues falling victim to a cold, hard cost-benefit analysis. Resources previously available free of charge will henceforth be seen as services that must be paid for. Do you know the true value of loyalty or creativity? It can be expensive! And there are long-term disadvantages because returning to intangible exchange is difficult once this step of material calculation has been taken. The resulting shift in thinking is similar to that of children who learn that it's not Santa Claus but their parents who put the presents under the Christmas tree. The value of the mystical magic is irretrievably lost.

It is advisable to seek a balance on an equal footing to avoid this dilemma. For example, superiors can reciprocate the loyalty of their employees by being loyal themselves, offering them support, protection, respect, or undivided attention.

The attempt to get away with it as cheaply as possible by offering a reward that seems inappropriate or even insulting to the recipient is punished particularly severely. It usually leads to a drop in motivation even below the level that would be expected without a reward. A classic case of a bad investment.

A restaurant server is typically annoyed by an inappropriately low tip. A compliment without a tip is more acceptable. Even if it seems mathematically irrational, most people prefer to work without pay or as volunteers rather than for inadequate compensation. Psychologist Dan Ariely, for example, has demonstrated these connections and described them in his book "Thinking Helps, But Doesn't Do Any Good.".

Ultimately, the subjectively perceived scope of action is restricted by external control via a reward. Suddenly, it is no longer one's own will to succeed that drives actions. The consequence: a defensive reaction to the restriction of personal freedom, leading to a decrease in the willingness to take initiative or causing the tasks "motivated" in this way to evoke a certain reluctance.

Some rewards simply aren't worth it. You can learn which rewards are worthwhile in the following sections. 7 tips on rewards (request them here!)

I welcome your suggestions at denkanstoss@microconsult.de.

Further information

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