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Ideas for Impact

Don’t Reward A While Hoping for B

February 23, 2016 By Nagesh Belludi Leave a Comment

We do what we are rewarded for doing. We are strongly motivated by the desire to maximize the positive consequences of our actions and minimize the negative consequences. Academics identify these aspects of behavioral psychology using the monikers “expectancy theory” and “operant conditioning.”

Flawed Reward Systems

Reward systems ought to commend positive behavior and punish negative behavior. But many organizations tend to reward one type of behavior when they really call or hope for another type of behavior. For instance,

  • A manager who wants his sales force to create long-term customer relationships mustn’t reward salespeople for new business from new customers, but for retaining customers and expanding sales to them.
  • A project manager focused on work quality shouldn’t reward a team for completing a project on time.
  • At institutions of higher learning, especially at prestigious universities, a professor’s primary responsibilities ought to be teaching and advising students. However, the academic rewards systems assert that the primary ways to achieve promotion and tenure are through successful research and publishing. Hence, given the constraints of time, a professor is likely to dedicate more time to research at the expense of quality teaching. Alas, mediocre teaching isn’t censured.
  • As I described in my article on “The Duplicity of Corporate Diversity Initiatives,” managers who extol the virtues of “valuing differences” stifle individuality and actively mold their employees to conform to the workplace’s existing culture and comply with the existing ways of doing things. Compliant, acquiescent employees who look the part are promoted over exceptional, questioning employees who bring truly different perspectives to the table.

“On the folly of rewarding A, while hoping for B”

In 1975, Prof. Steven Kerr wrote a famous article titled, “On the folly of rewarding A, while hoping for B” that’s become a management classic. Over the decades, this article has been widely admired for its relevance and insight. The article (the 1975 original is here and the 1995 update is here) provides many excellent examples of situations where the reward structure subtly (or sometimes blatantly) undermines the goal. The abstract reads,

Whether dealing with monkeys, rats, or human beings, it is hardly controversial to state that most organisms seek information concerning what activities are rewarded, and then seek to do (or at least pretend to do) those things, often to the virtual exclusion of activities not rewarded. The extent to which this occurs of course will depend on the perceived attractiveness of the rewards offered, but neither operant nor expectancy theorists would quarrel with the essence of this notion.

Nevertheless, numerous examples exist of reward systems that are fouled up in that the types of behavior rewarded are those which the rewarder is trying to discourage, while the behavior desired is not being rewarded at all.

Idea for Impact: “Put Your Money Where Your Mouth Is”

If you see behavior in your organization that doesn’t seem right or doesn’t make sense, ask what the underlying reward system is encouraging. Chances are that the offending behavior makes sense to the individual doing it because of inefficiencies in your reward system.

Take stock of your reward systems. Effective systems should induce employees to pursue organizational goals by appealing to employees’ conviction (or intrinsic motivations) that they will personally benefit by doing so. To inspire employees, translate levers of extrinsic motivation at your disposal to intrinsic motivation as I elaborated in my previous article.

Idea for Impact: Make sure that you understand and clearly communicate expectations, and reward what you really want your employees to achieve. Don’t encourage a particular behavior while promoting an undesirable one through your rewards and praises.

Wondering what to read next?

  1. Why Incentives Backfire and How to Make Them Work: Summary of Uri Gneezy’s Mixed Signals
  2. Rewards and Incentives Can Backfire
  3. How to Lead Sustainable Change: Vision v Results
  4. Intentions, Not Resolutions
  5. Eight Ways to Keep Your Star Employees Around

Filed Under: Leading Teams, Managing People, Mental Models Tagged With: Discipline, Feedback, Goals, Motivation, Performance Management

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About: Nagesh Belludi [hire] is a St. Petersburg, Florida-based freethinker, investor, and leadership coach. He specializes in helping executives and companies ensure that the overall quality of their decision-making benefits isn’t compromised by a lack of a big-picture understanding.

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