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Why Most Employee Rewards Don't Motivate

Written by
George Dickson
George Dickson

Employee rewards do have the power to motivate, but the format and circumstances matter.

In his book, Carrots and Sticks Don’t Work, Paul Marciano talks about how reward systems involving positive reinforcement, negative reinforcement, and punishment have been widely misunderstood among business leaders.

“We have been led to believe that the same principles that get a mouse or pigeon to “work hard” are the ones that we should use to make human beings more productive. Here’s the news-flash: human beings performing work in organizations are actually different from mice running in mazes and pressing bars for food pellets.”

Marciano recommends managers focus less on carrot-and-stick rewards, and provide employees with more meaningful motivators.

Here are a few ways you can balance employee rewards and recognition to motivate employees and inspire engagement more effectively.

Replace large, one-time rewards with smaller, more regular rewards

Giving away a single annual award is a big mistake employers often make. They put a great deal of money and effort into one large event, only to see minimal ROI in employee engagement. Why?

The power in awards isn’t in the rewards themselves, it’s about what the rewards represent. It’s the peer recognition, the manager praise, the intrinsic feeling that an employee's contributions are valued. That’s where most employee motivation comes from.

With each day that passes, the memory of a bonus check fades, regardless of how large the check was. So does the mental connection between the reward and the work done to warrant it.

Employee rewards don’t need to be gargantuan to make a big impact, and this is great news for growing companies who can't afford to hand out massive annual bonuses.

Rewards can be allocated in small amounts — even exchanged among peers. Keeping rewards small will also allow you to allocate more rewards in a more timely manner, while remaining in budget. Check out our low-cost reward ideas here

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Don’t rely on rewards alone

Realize that even though tangible rewards can make a big impact, they're only part of a larger equation.

To truly boost engagement, there needs to be an ecosystem of support and recognition sustaining employees. Creating an environment where peers are encouraged to recognize one another takes much of the burden from management, while providing an opportunity to recognize contributions that may otherwise have gone unnoticed.

Make regular giving and receiving of recognition and rewards accessible. The more convenient opportunities your employees have to build relationships, recognize, and support one another, the more motivated and engaged they’ll feel.

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Originally published on April 24, 2015 → Last updated March 11, 2022

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George Dickson

George is dedicated to strengthening organizational cultures with thoughtful leadership and frequent recognition. George formerly managed content and community at Bonusly.

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