To reward or not to reward employees

To reward or not to reward?
Employee Reward and Recognition plans

Laboratory conditions where dogs and monkeys were subject to experiment to repeat behavior in some way applies to human behavior and conditioning. This theory appeals to HR professionals for trying out reward programs not realizing that what works on animals do not work for humans. There is early research finding with animals to show that enhancing intensity or level of driving force beyond a point works but it does not keep enhancing learning and performance. (The Yerkes-Dodson law).The application of this did not go beyond laboratory.

Even simple award programs can impact in much broader and complex ways on the individual and collective behavior. Today’s workplace is different in terms of technology and multi-culture. Therefore the tested rewards are not enough to produce enthusiasm and motivation.

Even if people were offered enough money to live comfortably for their entire life, they would still prefer to work, said 70 % people who were working.

On the other hand there are people who enjoy what they were doing and would not look for going up the ladder. What is then a good work or great workplace and how to create it?

The good work which motivates is described by Martin Luther king.” If a man is sweeper and doing the street sweeping job he should be doing it like Michel Angelo or Beethoven so that everyone stops by to wonder what a job it was.”

More than 50 % of Companies in the USA use some form of incentive plan and spend over 77 billion dollars annually. More than half of that are non-cash awards. Hefty incentives, paid vacations, birthday treat, theme parties, and plaques have been in existence as rewards based on behaviorist model of driving force. In most manufacturing setups output based incentives called as payment by results, are prevalent though the system has changed its shape in recent years and is known as gain-sharing or work team results

Many forward-thinking managers, who promote team-work, participative management culture, continuous improvement efforts and the like support the use of rewards to institute and maintain these very efforts. They simply use reward as bait to accomplish their own goals.

Having experimented with many cultural groups by introducing both monetary and non-monetary rewards I came to a conclusion that “if you do you are damned and if you don’t do you are still damned” .What I mean is you introduce the rewards and if your attrition is still high, you are facing the management’s ire. If you do not introduce the rewards you will suffer from criticism of employees for being very conservative. Hence this attempt to clear the air on rewards.


Why rewards really work or don’t work?


Instituting reward of any form and recognition plans is no insurance to employee loyalty and superior performance. The employee reward plans can at the best achieve impermanent or a temporary correction in employee behavior. Rewards do not produce lasting changes in employee behavior just as penalizing employee brings an impact which lasts only for short period. The positive impact of rewards lasts only for few days just like the swing and sting of cricket ball which is lost once the shine fades away.

Employers cannot aspire to secure durable loyalty just by rewarding even long serving employees through a gesture to acknowledge the continuous contribution. Acknowledging invokes positive feeling which lasts till the recipient finds and compares some other colleague whom is perceived to have got the reward undeservingly . In one organization where I worked The award selection committee felt that the youth should be encouraged and the award should go to the junior most eligible contestant when there was a tie with very senior employee for “employee of the year award” for smart performance. The decision turned out to be counter- productive act. Within one month, the employee was sitting in an exit interview .The reason cited by him for his exit was that he felt it to be fair to be given a pay raise after having proven his capability as the top performer .He deserve the raise and according to him it would meet the competitor’s offer which was fair compensation for his caliber . Who decides what is the fair compensation?

The management decided to scrap all the award .The good intention of management to reward superior performance with a honest intention to get repetition of the behavior failed to buy even temporary loyalty.

The unhappiness that follows any disappointment drives the person behave entirely different and do even untried things if possible to avoid any further disappointment. Despondency and negative feeling arising out of unfulfilled aspirations to win can lasts longer. Announcement day of winners of various awards in organizations makes employees who did not make it to feel disappointed and sulk. Whoever lost would not openly acknowledge or say that some other employee deserved to win .When someone loses the immediate reaction is to doubt or question the system .This is not any management would expect to get in return for rewarding an employee.

There is always a section of employees who perform to their peak level despite absence of any reward .The big question is whether rewards can ensure better output ? The answer is negative. The employees, who always look forward to getting a reward have higher anticipation . When their anticipation fails it results in huge disappointment and they become less productive . There is conclusive evidence that people with anticipation to receive a reward for completing or for just doing a task successfully , simply do not perform at superior level when compared to those who work with no anticipation. It is the nature to anticipate which makes employees to work for the reward and makes them deliver less as they work only in the environment which fetches return for doing something mostly money.

The rewards destroy inventive nature of employees. In an experiment conducted with consumer product designers, people produced highly qualitative result when any reward was absent than when a huge incentive was introduced. Creative people are motivated to invent not because of the drive to make money but because of their urge to make the world better place to live .They are not working towards reward when indulging in invention.

In general management‘s belief that some form of rewarding employees in would keep the motivation level up has also been disproved many times over.

Rewards have the potential to create distortions in pay and sabotage pay parity. Monetary incentive has the potential to create inequality in employee’s total earnings. Imagine a situation where a salesman gets a chance windfall order, which brings huge incentive in one quarter and the way it can upset day to day rhythm of life style . Moreover such windfall gains create social tension in the family and friend circles due to temporarily elevated life style.

Normally the tendency of people is to go crazy with spending when there are sudden windfall gains only to regret about it later being unable to maintain it. Rewards end up creating heartburns among peers and consequently attrition.

Telling an employee to behave in most desired way with promise of a reward is not really very different from telling the employee not to repeat a behavior with threat of discipline. In an organization that created culture of rewards for every action, the employee’s focal point is the reward itself than the task accomplishment.

When the design of the reward is aimed to elicit or encourage certain behavior, that makes the manager to become more scheming with the subordinates and the feeling of being controlled is likely to assume punitive perception over time. Penalty and reward approach are thus belonging to the same currency family. Both end up having a negative overtone because they are perceived as calculative move.

An Employee who had worked harder anticipating a reward ends up feeling belittled which is as bad as being penalized. The child in the person sulks and tells that “you got cheated”. For any employee who worked extra hard, if reward was not forthcoming the psychological effect is always depressing. When the anticipation runs high for reward, it is more depressing and demoralizing from a miss-out.

The dilemma of reward or discipline is always taunting every management. Managers are tempted to hire subordinates who are more prone to comply and do things as per the manager’s demand and the manager then rewards for compliance and expect a repeat behavior. This approach is no different from another type of manager whose way is to find people who are doing something wrong and disciplining them with hope to stop that behavior. Both categories of managers live in a paradigm of their own. Either is not correct approach as both are perceived as controlling.

Rewards create dysfunctional leadership. Managers often are tempted to use incentive systems as a substitute for giving employees the right recognition with useful feedback, emotional and social support, and autonomy on the job. Rewards create ineffective leadership

Manager’s effort in tempting subordinates with an incentive bait for getting the results requires much less effort in training, mentoring and educating. Manager’s resorting to this easier option of tempting people with rewards to achieve their own goals of better rewards for them. Indeed some evidence suggests that productive managerial strategies are less likely to be used in organizations that rely heavily on pay-for-performance reward plans. Thus rewards create ineffective leadership and ill prepared managers for crisis management during bad times when rewards disappear.

In one of the recent studies it was noted that supervisors tended to follow the path of least efforts or no strong leadership style or style of task orientation to reach the goals when incentives plans were in place to lean on.

In order to make employees participate in any activity organizations have tried various forms of incentive and it has been established that there has not been any better employee involvement. Thus Rewards blunt the managerial or leadership abilities which are harmful to the organization.

Jone L. Pearce, associate professor at the Graduate School of Management, University of California at Irvine, observed in “Why Merit Pay Doesn’t Work: Implications from Organization Theory,” pay for performance actually “impedes the ability of managers to manage.” Rewards create ineffective leadership.

Creativity is first victim: Rewards discourage risk-taking. You pay huge money for achieving sales targets People will do exactly what they are paid for Monroe J. Haegele, a proponent of pay-for-performance programs, in “The New Performance Measures.” Creativity is first victim

When temptation is created to think about what one can l get for doing a task People become less inclined to think beyond the task and explore newer options? Creative approach is the first fatality of rewards culture

Creativity is first victim: The late Cornell University professor, John Condry, was more succinct: rewards, he said, are the “enemies of exploration.”


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