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Why Rewards Cause Problems #6: Rewards Undermine Interest

Guest post by: Robert Whipple

Article Overview: We do things because we are interested in them, generally not to get some kind of tangible reward. Organizational reward systems often overlook the very powerful intrinsic motivators of their workers, and get only a tiny fraction of the discretionary effort that is available. The attached article gives some insight on this phenomenon.

Why Rewards Cause Problems #6: Rewards Undermine Interest

Rewards Undermine Interest

If you look back at your peak performance times in your life, I am 100% sure you were being driven by intrinsic motivators rather than some reward. We are all at our best when we are doing the things we think are right and noble. Alfie Kohn puts it this way, "Few will be shocked by the news that extrinsic motivators are a poor substitute for genuine interest in one's job. What is far more surprising is that rewards, like punishment, may actually undermine the intrinsic motivation that results in optimal performance. The more a manager stresses what an employee can earn for good work, the less interested that employee will be in the work itself." (Kohn, 1993, p 114) Other authors suggest that the mechanism is the idea that if people feel they need to be bribed to do something, it isn't something they would ordinarily want to do.

My personal estimate after having worked in a large corporation for 33 years is that companies generally get less than 25% of the discretionary effort that is available in the work force. If you doubt that, take a look around at how people work. You will see there is an incredible opportunity for more output. Nobody can sustain performance at or near the 100% of potential. That would burn us out. But, if my estimate in even close to being correct, most organizations could double productivity and still have people working at a comfortable 50-60% of their peak capacity.

Some people will say that organizations today are stretching their workforce nearly to the breaking point. I would agree that some groups are totally abusing the workers by simply eliminating jobs and asking people to double, triple, or even quadruple their job responsibilities. I still believe the reality in most instances is that there is a huge amount of discretionary effort and efficiency that is left off the table.

So, how do managers get more of this discretionary effort of the workforce? Simple, just change the culture to one of higher trust where people willingly give their maximum potential because their true motivation is intrinsic (Trust, alignment, recognition, sense of self worth etc.) rather than extrinsic (carrot and stick approach).

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Article Tags: Interest, motivation entitlement relationships problems Reasons Risk control, pay, Punishment, rewards



Related Forum Posts
Re: THE SECRET TO SUCCESS IS ALL IN YOUR HEAD...RIGHT NOW!!! - Success = Thinking (Head) + Heart (Feeling / Interest) + Hand (doing/ action). Success - H3 Robert
Advertisement that sales - Plan your marketing programme. It should include commitment to capital resources. If you run a small business, you aren't likely to have a generous enough advertising budget that will allow you to run costly branding or campaign ads. Every advertisement you run must convey to your prospect a solid offer and attractive reasons to act quickly, and result in increased sales and an enhanced image of your company. Good advertising always pays its own way through increased sales and profits, improved cost-effectiveness, reduced selling costs and shortened selling cycles. A useful formula that will help you increase the effectiveness of your advertising efforts is A-I-D-A, which stands for Attention, Interest, Desire and Action. When creating an advertisement, always remind yourself that it should: (1) capture your prospects' Attention, (2) arouse their Interest in your offer, (3) create their Desire for your product or service, and (4) provide a powerful spur to Action, that is, turn your prospect into buyers. Remember, bad advertising is an unproductive expense, and good advertising is an investment in future profits!
Re: When does a trend become a legitimate business opportunity? - Moreover, I recall the time when bubble tea was the next big thing in Toronto... and then the market became flooded with new shops, only for the trend to die off and result in many failed small businesses. "Interest" and "confidence" are not enough to help a business stay above water.
Received my first Letter of Interest, What now? - After blasting financial and VC firms with my executive summary, I have finally received my first Letter of Interest. I'm really excited that my work is finally starting to show results, but that makes me all the more cautious. The terms aren't very good, give up a little less than half of the company for less than a million dollars of funding. It also says I'll basically have to do what they say so they can 'protect' their interest. So my question is, how open are these letters of interest to negotiations? I really appreciate any information/advice from anyone who's been through the process so I don't sign up for something I will regret. Thanks!
Micro Loans - That's interesting Russell. The following is more information on Micro Loans and anyone within the USA who would like a list of Micro Loan Lenders (listed by State) I have that information! Just let me know and i'll get it out to you in my spare time. The Microloan Program provides very small loans to start-up, newly established, or growing small business concerns. Under this program, SBA makes funds available to nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. The average loan size is about $13,000. Applications are submitted to the local intermediary and all credit decisions are made on the local level. Terms, Interest Rates, and Fees: The maximum term allowed for a microloan is six years. However, loan terms vary according to the size of the loan, the planned use of funds, the requirements of the intermediary lender, and the needs of the small business borrower. The maximum loan amount is $35,000, however, the average loan amount is around $13,000. Interest rates vary, depending upon the intermediary lender and costs to the intermediary from the U.S. Treasury. Generally these rates will be between 8 eight percent and thirteen percent. Collateral Each intermediary lender has its own lending and credit requirements. However, business owners contemplating application for a microloan should be aware that intermediaries will generally require some type of collateral, and the personal guarantee of the business owner. Technical Assistance Each intermediary is required to provide business based training and technical assistance to its microborrowers. Individuals and small businesses applying for microloan financing may be required to fulfill training and/or planning requirements before a loan application is considered. How to Apply: Small businesses that are interested in applying for a microloan should contact a microlender in their area.


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