Are Rewards Demotivating? Myth and Reality

January 29, 2014 Darcy Jacobsen

One of the central themes for this blog is the tremendous power of recognition and reward to increase engagement, drive behavior and motivate employees. Rewards, praise and community all play a role in this process—and the basic principles of social psychology, positive feedback and operant conditioning make it clear why this works.

But occasionally someone asks us about studies of intrinsic and extrinsic motivation that have come out of the education world, and they express fears that rewards might be bad for engagement.

In some criticisms of reward, educational scholars have argued that rewards may:

  • Decrease time spent on a task after the reward is removed
  • Inhibit self-determination and creativity
  • Decrease intrinsic motivation (where people engage in an activity primarily for its own sake)

Yet other scholars, largely from organizational psychology, have argued that recognition and tangible reward for effort will:

  • Increase initiative, creativity and “out of the box” thinking
  • Produce a “generalized increase in industriousness”
  • Reinforce and encourage desired behaviors
  • Improve people’s attitudes toward tasks that might otherwise be considered “thankless”

So which is it? Are tangible rewards motivating or demotivating?

There has been a feisty debate about this question for some decades now. And it turns out that the devil is in the details—in particular in terminology and the types of experiments being conducted.

A while back, Professors Judy Cameron and W. David Pierce from the University of Alberta decided to clear things up. They compiled and analyzed two decades of studies to get to the bottom of this very question.

They found that rewards CAN be detrimental—but only under very specific circumstances. They found that “when subjects are offered a tangible reward (expected) that is delivered regardless of level of performance, they spend less time on a task than control subjects once the reward is removed.” (The emphasis here is mine.)

It turns out, when studies show that rewards are bad, it is because the researchers are lumping together expected incentives with inspired rewards and often ignoring performance altogether. This makes complete sense. As we know from our own experience, there is a wide difference between a “tit-for-tat” expected incentive that is not based on performance, and an organic reward from a manager or peer who has been genuinely inspired by your great performance. This is why we steer clear of leaderboards or quota-based gamified recognition, for instance. (They may have a place in pure incentive contests, but not in recognition, in our view.)

A few years after that first analysis, Cameron and Robert Eisenberger from the University of Delaware published another paper, in which their examination of the research literature concluded that: “Our analysis of a quarter century of accumulated research provides little evidence that reward reduces intrinsic task interest.”

All this shows that there is no reason to think of intrinsic and extrinsic motivation as antagonistic. In fact, extrinsic and intrinsic motivators work well together, as we see very clearly in our own recognition and reward data. This is also echoed in the scholarship. A study at UC Berkeley found that: “far from being incompatible, intrinsic and extrinsic reasons for learning are both encouraged by tangible rewards.”

So, according to these analyses, when properly designed to be inspired and performance-based:

  • Rewards do not reduce intrinsic motivation.
  • Rewards do not limit creativity.
  • Rewards do not reduce our willingness to spend time on tasks.

You may be wondering, then, what ARE the effects of spontaneous, performance-dependent, tangible rewards? Here are three that come from the research:

Rewards make us feel more competent: According to Cameron: “A tangible reward that one perceives as being deserved for successful performance of an activity is likely to maintain or enhance the perception of self-competence without undermining feelings of self-determination.”

Rewards make us more willing to perform tedious tasks: A related 2001 study showed that “rewards can be used to enhance time and performance on tasks that initially hold little enjoyment.”

Rewards make us more creative: According to Eisenberger and Byron (2011), reward for creativity increases creativity when recipients clearly understand that creativity is a goal. (Rewards expressly for high performance also increase creativity—but to a lesser extent.)

I hope that this synthesis has been at least a little helpful in resolving any lingering concerns you might have about the role of tangible rewards in building a motivated, satisfied and engaged workforce.

If you have any other questions about best practices, I recommend you have a look through our Recognition Blueprint guide to best practices.

If you enjoyed this post, you might enjoy these companion posts:

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