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Piers Steel is a professor at the University of Calgary’s Haskayne School of Business.
Piers Steel is a professor at the University of Calgary’s Haskayne School of Business.

LEADERSHIP LAB

Money’s great – except when it demotivates Add to ...

This column is part of Globe Careers’ new Leadership Lab series, where executives and leadership experts share their views and advice about the leadership and management issues of today. There will be a new column every weekday. Find all Leadership Lab stories at tgam.ca/leadershiplab.

Does money motivate?

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Given how often we use it as an incentive, let’s hope so. We use financial rewards to motivate everything from contestant risk-taking on reality TV shows like Survivor to good behaviour from our children. But take a moment to think about your own experiences trying to motivate others to do what you want. Did the promises of cash always get you the behaviour you were wanting?

The truth is, rewards do not always work as advertised. Although there is a belief that what gets rewarded gets done, there are times when rewards are not only useless, but are actually demotivating, distracting and simply undesirable. Here’s why:

1. People crave autonomy

While the desire for autonomy can range from a weak whim all the way up to “Give me liberty or give me death,” it is typically quite substantial. People do not like others telling them what to do, and often resent any efforts to be coerced. So, if a reward is presented as a means to control someone, it can backfire. Giving employees a degree of choice in reward systems and presenting the system as encouragement rather than control can greatly reduce the perceived threat to autonomy.

2. The price tag says it all

The perceived value of a task – how desirable and rewarding it is – depends on how it is presented, and, ironically, the price tag attached to it. If people are paid more than their normal salaries to complete a certain task, they may assume the task is undesirable. However, presenting the job as desirable can minimize this effect. Like Tom Sawyer convincing the village boys to whitewash his aunt Polly’s fence by insisting they could not, it is important to make clear that the task is coveted and that others would be eager to do it. It is not just about the cash reward; it is also about creating demand for the job.

3. Rewards can distract from the goal

A dangled carrot, even though desirable, may have negative consequences on task completion. It comes down to the difference between goal choice – what path we take, and goal pursuit – how fast and well we walk that path. Rewards are great for getting people to choose an option, but they can be a big distraction as the goal is being pursued. Instead of focusing on the task at hand, people may think too much about the reward, diverting their attention and sapping their motivation. It is often better to stop emphasizing the reward once the work has been initiated.

4. Kindness is not for sale

Will rewarding altruism, where people put others first because it’s the right thing to do, generate even more compassion? Not quite. Altruism sets off a “feel good” neurobiological reaction, activating a specific region of the brain. A cash reward does not recreate the same feeling. In fact, it can actually drive out these good feelings. Called “motivational crowding,” introducing a cheap incentive can damage people’s motivation, leaving them less willing to act.

5. Rewards need a fresh take

Predicting what a person will actually find rewarding has earned its own field of study known as affective forecasting. It can be extremely difficult to figure out ahead of time what a person will find rewarding. Often the “good” is not as good as one originally expected. So, do not be surprised if a reward program decreases in attractiveness and effectiveness with time. A not-yet experienced reward may be motivational at first, but eventually the shine will fade. To keep your reward system fresh, evaluate your incentive scheme on a regular basis and continue to modify or create new rewards.

Take the time to reflect on your reward program. Bonuses can become simply another entitlement; incentive schemes may reward only schemes. When in doubt, perhaps go back to the old standby of acknowledgement and appreciation, because sometimes the best and most effective reward is simple recognition and a sincere, straightforward thank you.

Piers Steel (@pierssteel) is a professor at the University of Calgary’s Haskayne School of Business (@haskayneschool). He is a recognized authority on procrastination and the science of motivation. He is also the author of The Procrastination Equation.

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