Do Performance Incentives Kill Motivation?

I’ve been reading articles and business studies about how rewards in the workplace do little more than motivate people to pursue the rewards. As a stand alone sentence, this sounds ideal, but when you dig a little deeper, all is not as rosy as it seems.

When we introduce an incentive into someone’s role, we place a huge amount of focus there. If someone is just behind the target to receive the incentive, they may start behaving in ways that we wouldn’t like in order to get the incentive. They may cherry pick what tasks they do, they may cut costs in areas that will lead to greater costs later on, they may even start gaming the system just to make target. None of these scenarios is achieving what the incentive was intended to do, which was to motivate people to do a better job. All they were motivated to do was get the incentive.

On the other side, imagine that someone has got to a point where they already know that they won’t achieve their target and therefore lose out on the incentive, do you think that person is still motivated? Not at all, and if there is another incentive plan where they can still get a bonus, you can be damn sure they’re going to give up on the failed target and go after the other one, basically neglecting the part of their job that should have been a priority.


The book Punished by Rewards by Alfie Kohn goes into these reasons and many others for why rewards end up punishing those that try to implement them, as well as the people they are implemented for.

There is one point that I am conflicted about though, which is that if I agree with everything here, then I should not be wanting to get a performance bonus myself. Now I would definitely prefer a pay rise over a bonus, but I don’t think I can confidently make the argument that I shouldn’t get a bonus! The evidence is pretty strong here and I can recall times when my motivation has been killed just by expectations with no reward in sight, so what should happen when we go above and beyond the call of duty?

I haven’t got this far into the book yet, but there is something touched on that I have firmly agreed with for a long time. When a company compensates their employees fairly against market value, the focus on money diminishes greatly. It is only in the scarcity of money that it becomes a focus for us, and in that situation we aren’t likely to be working at our best anyway.

Maybe the answer is to reassess your market value every now and then and make a case for your pay to increase, rather than trying to get short-term rewards? Maybe the answer is to look for another job or pursue a promotion? These are probably questions I’m going to have to figure out myself soon, but for now I’m just going to keep following the studies and literature to see where it takes me.

What do you think about rewards? If you think they’re good, do you feel like you need them for some reason, or you just believe it is ‘fair’ to ‘recognise’ achievement in this way? Surely a salary should already recognise the value you bring to a company?

Tell me what you think

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