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How Incentives Can Hinder Performance

By Jillian Broaddus and Chuck Cusumano



In Thanksgivings past on The Joshua Group blog, we’ve written a multitude of blogs on the power of gratitude. We’ve discussed the impact of thankfulness on happiness, the importance of recognition on performance, and the power of a hand-written note.


In honor of Thanksgiving 2022, we have a bit more to say on the topic of recognition – albeit, it may sound contradictory to our past postings (on the surface, at least!).


According to Inc., “Research has been accumulating that shows tangible rewards as well as praise can actually lower the level of performance, particularly in jobs requiring creativity. Study after study has shown that intrinsic interest in a task -- the sense that something is worth doing for its own sake -- typically declines when someone is given an external reason for doing it.”


Take one study led by Teresa M. Amabile at Brandeis University as a prime example: A group of 72 creative writers were tasked with writing poetry, and separated into two groups. One group was given a list of extrinsic reasons for writing (e.g., impressing teachers, earning money, etc.), while the other group was given a list of intrinsic reasons (e.g., the enjoyment of wordplay, the satisfaction of self-expression, etc.).


The results? Not only did the group of extrinsically-motivated writers write less than those who were intrinsically motivated, but the former group also showed a “significant drop” in the quality of their work.


These findings transcended beyond the world of poets, too: in numerous similar studies, the presence of a tangible (usually monetary) reward resulted in poorer performances from the subjects.


If you’re wondering why these results exist – especially in a capitalistic society in which most of us are largely driven by raises, rewards, and dollar signs – the answers are manifold. For one, rewards can encourage people to get a task done as quickly as possible, to the detriment of the details. Additionally, extrinsic rewards can erode intrinsic motivations. (If you’ve pursued a paycheck that aligns with your favorite interest or hobby, you’ve probably had a taste of this!). And, finally, there’s evidence that rewards can cause people to “see themselves as being controlled by the reward. They feel less autonomous, and this often interferes with performance.”


So, what do these findings mean for leading employees to be both engaged and productive? Does it mean lowering pay, removing bonuses, or avoiding recognition? Absolutely not. Perhaps Daniel Pink put it best by saying, “Of course the starting point for any discussion of motivation in the workplace is a simple fact of life: People have to earn a living. Salary, contract payments, some benefits, a few perks are what I call ‘baseline rewards.’ If someone’s baseline rewards aren’t adequate or equitable, his or her focus will be on the unfairness of the situation and the anxiety of the circumstance. You’ll get neither the predictability of extrinsic motivation nor the weirdness of intrinsic motivation. You’ll get very little motivation at all. The best use of money as a motivator is to pay people enough to take the issue of money off the table.”


What the findings prove is the importance of remembering to emphasize the intrinsic motivations inherent in any given task – and especially with regards to creative endeavors. Here are a few questions to ask yourself to evaluate how well you’re doing when it comes to this:


  • Are your people aware of your vision – as a company – and how their task impacts that vision?

  • Better yet, are your people aware of their personal WHY?

  • Is your workplace an environment in which people feel valued, autonomous, and supported?

  • Are you hiring for intrinsic motivation – or, in other words, are you probing for whether or not employees are signing up for a paycheck or pursuing a path aligned with their passions?

  • Are your employees in the right roles for the right tasks, in which they can easily find intrinsic motivation?


In this time of challenging recruiting opportunities, the great resignation, higher and higher wages, and the competitive nature of the labor market, wouldn’t it be nice to have an edge on recruiting? Wouldn’t it be nice to have another tool to help in retention of your current workforce? And if you are thinking of changing your employment, wouldn’t it be great to find a way to be more satisfied in your next role? Then look no further than what really is the basis of motivation for yourself or your employees!


If you’re struggling with recognition, engagement, or the answers to any of the above questions, we’re here to help – please simply reach out to us at hello@thejoshuagroupconsulting.com.


And we hope you have a HAPPY THANKSGIVING!

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