Understanding how to motivate employees to be productive has always been an enduring topic. In the business world, leaders have spent decades experimenting with rewards and penalties, trying different combinations of carrot and stick based on instinct, trend, or tradition. 🥕🤔
However, neuroscience has found vastly different brain activity when people receive incentives or are threatened with disincentives. Understanding this psychological difference can help you tailor your rewards program to inspire action and increase employee satisfaction.
Hitting the rewards accelerator
If you want your employee to step on the gas and be more productive, rewards are the way to go. Because of our evolutionary history, the promise of a reward encourages action.
While we’re not racing to hunt and gather anymore, acting fast still has a host of benefits, whether it’s getting the corner slice of the birthday cake or being the first to volunteer for a meaningful project.
The human brain recognizes rewards with a surge of dopamine from deep in the midbrain that travels to the motor cortex along a channel that promotes action. This dopamine surge helps prioritize acting to get the reward above other mental processes.
If you want to see an example of this phenomenon, put a piece of candy in front of a young child. Unless they’ve had lots of training in manners (otherwise known as disincentives from Mom and Dad), they’re going to act the way their previous experiences have taught them to: grab that candy, unwrap it, and pop it in their mouth.
This action surge completely outpaces their decision-making frontal lobe, so it takes a second to justify what they just did if you ask.
How can you apply this principle to your workplace? For jobs where more activity often translates to more success, such as sales positions or taking support calls, having a regular framework of rewards and recognition can encourage employee momentum.
A friendly competition for a reward can also encourage employees on any team to act in changing a work habit or adopting a new policy. One such program at BambooHR is called the Rafferral: every qualified candidate an employee refers earns them one ticket for a raffle with cash or experience-based rewards. We get a lot more action with prizes than we do from duty alone.
The brains brake pedal: Demotivation
An opposite effect happens when the brain perceives something it wants to avoid. In the midbrain, the dopamine surge activates a different path of receptors that repress action. This process frequently precedes the fight-or-flight response—imagine your legs locking up on the edge of a bungee jumping platform, or a soldier who freezes in battle.
Here’s a vivid story of this effect in action: when I was 12, I was crossing a local road with a friend. Traffic was heavy and there was only one stoplight in my town at the time, so when there was a small break, my friend encouraged me to book it. My freeze reaction kicked in when I was in the middle of a lane with an oncoming bus.
Me, pointing: “But there’s a bus!”
My friend: “That’s why I said to run!”
Me, a second later: “...Oh!”
It was a near miss. I probably went right under the rearview mirrors as I lurched out of the way. In this case, my demotivation slammed the brakes at the worst possible time.
Here’s the question, though: do your employees feel like a bus is coming? The implied threats of the working world are much less noticeable than public transport barreling toward you, but uncertainty can ramp up the stress and leave your employees overwhelmed.
The natural response to do nothing until the invisible danger passes can lead to analysis paralysis, or, when facing long-term job stress and uncertainty, burnout.
Without clarity on what’s expected of them, employees can get stuck in a mental freeze with the fight-or-flight response coming too little, too late.
This can happen at times of huge change—like a company acquisition, new management, or navigating a global pandemic. There are many change management frameworks developed specifically to address this very human response!
Putting employee motivation strategies to action
Of course, motivation and demotivation are much more sophisticated than a teenager alternating between pedals and getting whiplash while learning to drive.
For every reward-based action, the brain suppresses other actions and thoughts, like a professional driver tapping the brake to drift around a hairpin turn.
Recognizing the right blend of stop and go for each role helps you tailor your incentives and disincentives to the results you want. For example, you might want to reward a sales rep for increasing sales, but only focusing on personal incentives can encourage unhealthy competition between employees or cutting corners to reach the reward. In extreme cases, unregulated rewards plans can crash through the guardrails for disastrous results.
On the other hand, roles like managing compliance, processing payroll, or running quality assurance on a product involve acting to respond to the possibility of future dangers to the company. But even though these employees can’t improve their action score by fixing problems that don’t exist, their motivation doesn’t need to be limited to avoiding a mistake-based firing. You can still use recognition to encourage them to engage with your company.
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One example of this is my employer BambooHR’s value of Lead From Where You Are. It encourages employees to own their decisions and share their insights into making processes better, whether it’s beating a sales record or finding a better way to coordinate between departments.
This contrasts with a demotivating culture where employees freeze, fearing that their actions or ideas are overstepping their authority.
Tips for balancing incentives and disincentives
- Make performance management a consistent process. No news isn’t always good news, not when employees start second-guessing the reasons why they’re left to drive blind. Regular one-on-one meetings give managers opportunities to recognize employees, apply timely course corrections, and connect them with the resources they need for their projects and progression.
- Make a distinction between rewards and regular compensation. Few people see paying their mortgage as a rewarding activity. But all too often, that’s what they do with their cash rewards. You’ll want to make sure your employees aren’t relying on your reward structure to meet their financial necessities, because desperation can lead to unethical behavior.
But when compensation is taken care of, switching to closed-loop gift cards can help ensure that your employees get that habit-strengthening dopamine boost from a real reward—even if it’s a DoorDash lunch instead of a team lunch.
- Improve your employees’ quality of life. When employees know your organization considers their daily experience, both at the office and at home, it helps ease their foot off the brake. These considerations don’t have to break the bank—offering flexible remote work scheduling or making improvements to employees’ office space can demonstrate your organization’s willingness to invest in their success, especially when paired with meaningful career development.
Get employees back in the driver's seat
Understanding how incentives and disincentives affect employees lets you build a workplace experience that puts them back in the driver’s seat: ready to act, grow, and progress. Developing this active, engaging culture is one of the first steps to building a vibrant, thriving business.