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Do Incentives Actually Cause Failure?

By June 10, 2012 May 6th, 2020 No Comments

“When the stakes get too high, performance can suffer”, according to a new paper from researchers at California Institute of Technology. Previous studies had suggested that success rates decline with high incentives because people can be too motivated. The newest research suggests otherwise, finding positive responses in the reward-response area only when the incentive was first introduced. In other words, participants responded well to the initial incentive but grew distracted once the task was under way.

“Worries over losing the carrot—even before the carrot is in hand—can lead to failure”, said Vikram Chib, a postdoctoral scholar at Caltech and lead author of the report.

“There are instances where incentives can be good for a big goal or a long-term project such as hitting annual sales targets. But for day-to-day encouragement of employees, recognition is a better approachhe stated.

From my experience at Brownie Points I certainly concur with the final sentence. A culture of Recognition is crucial for any organisation hoping to implement a successful program of staff engagement.

However, I feel that the other comments about carrot (and by inference stick) should be put into context. I believe that a well-planned reward and recognition program is all carrot and no stick, so it does not have a negative impact on performance. Reward and Recognition is about getting staff to “go the extra mile.” Staff members that are motivated will thrive on this. Those that aren’t motivated to increase performance are not punished; they simply don’t receive the rewards for extra effort.

Another concern I have with this report is that it does not reference the benefits associated with short or mid- term goals, achievable targets and measurable performance. It also does not address the importance of setting performance criteria monitored against pre-determined KPIs (key performance indicators) to measure the positive impact on the business.

The report also fails to mention perhaps one of the most important points about staff engagement, that a good reward and recognition program should deliver transparency so that everyone can see who was rewarded AND WHY. When employees see the reason for the recognition and the subsequent reward this often acts as a motivator to other staff members.

Recognition on its own has a limited shelf life (see my blog 26th May). Reward AND Recognition programs should be sustainable and deliver real measurable benefit to the business.

To learn more about recognition and reward programs that benefit your business contact the team at Brownie Points on 03 9909 7411 or email us at info@browniepoints.com.au

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