Reward systems do not improve the quality of work

I saw this tweet from The Chief Happiness Officer and was immediately intrigued:

“Not a single controlled study has shown a long-term improvement in the quality of work as a result of any reward system.” - Alfie Kohn

A quick spot of Googling turned up the source article.

It's well known that financial rewards are not the best way to motivate people. But this article takes it a step further and says that even the noncash rewards the people cite as being motivating to them don't really have any effect long-term:

"If people are asked which sort of incentive they like best, they may well pick something other than money. But look at how the question -- and, more disturbingly, the choice offered in some real organizations -- is framed: you only get to choose the flavor of the doggie biscuit you’ll be offered, not whether to replace the whole system."

So what does motivate employees?

"Numerous studies have shown that when people are asked what is most important to them about work, the top answers are factors such as interesting work to do, or good people to do it with, or a chance to have some say about what one does. These are not rewards. They are not offered conditionally, on the basis of satisfying someone who has more power than you do."

At NixonMcInnes, we've tried out various different rewards systems, even ones that give the control  to the employee. But in the end we have settled for a simple company-wide profit-share scheme and a focus on democratic principles. We have by no means cracked it, but we're working on it. And I think this article adds some validation to our direction.

"It’s particularly interesting to ask folks who have worked at organizations that don’t use rewards at all, those that pay people a decent salary and then help them create interesting tasks, a sense of community, and an opportunity to participate in making important decisions. These people, in my experience, rarely choose to return to a place in which employees receive patronizing pats on the head or other goodies for pleasing the boss. They want to be paid, not “incentivized”; encouraged, not praised; offered respect, not reinforcements."

Comments

[Curious]

Are sales based roles an exception?

[tomnixon]

Very good point, Curious. I was wondering this myself. I think yes and no.

I think that some salespeople are different from the rest of us because they are genuinely focused on money and material gain. More money, cars and Swiss watches actually makes them happier. Whether this is genuinely true in the long-term is debatable, but I think it's good enough to keep them motivated and performing well at work for a long time.

But I don't think all sales people need to be rewarded directly for their performance in the form of commission. If you are passionate about what you're selling, and what it means to the organisation if you close that deal, then you can perform well without extra rewards. This is the model of sales that I'm building in our company. Targets - yes, but no extra rewards.

[yang]

But without money, how can the people have to basis to work?

[Amorita Maharaj]

I feel even though we are not always rewarded financially, non-monetary rewards such as praises and development via trainings or more involvement in decision making processes are vital tools needed in order to keep employees motivated and performing - Otherwise it becomes an unhappy place to go to work.

[rantersparadise]

"Give control to the employee"

Why didn't this work?

Just found your blog and would be really interested in the stuff that didn't work. I am currently trying to start my own business which is rooted within the democratic model but I try not to get too idealistic.

Semler is great and I read his stuff whenever the world gets even more undemocratic to reaffirm to me that it can be done but with hard work.

Anyhow, looking forward to reading more, thanks.

[Skeptical]

As CEO, getting great work for pennies is your reason d'être, so forgive me for being skeptical.

I know that I'm a lot happier on 75k than 32k (a salary change I have actually made) because, whilst money is not the be all and end all, you need fungible wealth to self-actualise (unless you find a very cheap lifestyle that fulfils your deepest needs - a Buddhist monk?). I don't enjoy worrying about bills, or whether I can afford the steak on the menu.

"I think that some salespeople are different from the rest of us because they are genuinely focused on money and material gain."

I've heard this repeated by others many times - the division of the human race into salespeople and the rest as a means for justifying different renumeration policies. A case of reductio ad absurdum?