Why employee rewards are frequently ineffective and potentially counterproductive

Competition is a funny thing.
Competition is a funny thing.
Image: Reuters/Grigory Duko
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In 2018, a study of 15,000 students in California revealed some puzzling news: Awarding students for perfect attendance led to poorer attendance in the future.

For their experiment, researchers divided their subjects into groups. In one, students were told preemptively that they would receive a reward at the end of term. In the other, students who had perfect attendance were surprised with a reward retrospectively. Students who knew about the award all term behaved no differently to control students. But students who were surprised with an award actually attended classes less often thereafter.

So, in the best-case scenario, this type of award bore no impact on behavior, and in the worse cases it actually made attendance worse.

We really did think that both awards would improve attendance,” said Carly Robinson, a researcher from Harvard University. “We were pretty confident. When they actually increased their absences, we were stumped at first.”

Why does rewarding top performers lead to worse performances? And are there situations where awards do work?

If we apply this study to the workplace rather than academia, it gives us some important things to think about.

For one, offering financial rewards for a task implies that the task is difficult, which can be demotivating for workers. It can also imply that the manager offering the award does not trust that the worker will be sufficiently motivated to complete the task—also demotivating.

In the study I first mentioned, the students came from a range of ethnicities and household incomes, spoke different languages, and came from inner-city and suburban schools. So cultural differences can be ruled out as an indicator of performance.

However, as Robinson pointed out, good attendance is universally seen by students as “pretty lame.”

“Attendance is not cool in school, so you can imagine a public award would increase the number of days students miss,” she said. “That’s not something I want to be recognized for. There have been studies that monetary rewards are effective, but even $5 or $10 awards do not have an impact.”

Giving out awards is a fairly common trend to motivate people to achieve goals in classrooms and in the workplace. But as studies like this one show, awards might be causing unseen problems for you and the people you work with.

In many cases, the desire to not stand out from the crowd overshadows the benefits of recognition. Our concerns about how a reward will be perceived, either by our peers or our manager, indicates how strongly we are influenced by social norms and reputation. Robinson also suggested that students with perfect attendance records felt entitled to days off after being singled out for their good behavior. The implication is that perfect attendance is not normal—it’s extra, otherwise the award would not have been given. An award for perfect attendance might merely make it clear that a student can decide to put in the same “normal” level of effort she or he sees classmates putting in for a less-than-perfect record, and that’s fine.

“Instead of actually motivating them, students were interpreting that they were attending more than their classmates and the school expected them to,” Robinson said. “The effect was biggest among the lowest academic students. When you give awards for attendance it leaves them feeling licensed to miss school going forward because they are overshooting what was expected of them. It appeared that after the award period was over, they felt licensed to miss more school.”

And what’s the worst that can happen, as long as your performance is still at least average?

I am hesitant to generalize, but I think there is something negative about giving an award for something that is expected of you,” said Robinson. “By doing so it sends the message that something you should do every day is not expected.”

$ = Thx

In terms of retrospective awards, unexpected financial rewards are no more motivating than a “thank you.” In other words, being surprised with money is nice, but it is not more effective at maintaining and improving those workers’ performances than verbal recognition.

Rewarding good performance may have unintended positive effects in some cases—if it is applied to the right people.

Top performers typically appear to be unaffected by awards, but low and below-average performers who see their colleagues singled out for praise show signs of improvement. Perhaps the implication that their bosses have noticed they are not working well is enough to motivate them to do better, even if their poor performance is not explicitly called out. However, for this to work, poor performers must make accurate assessments of their own work, which does not always happen.


For some people, recognition is something to avoid, whether positive or negative. People with wallflower traits, for example, see any public recognition as potentially negative. The biggest motivator for wallflowers is to appear “normal.” Although there aren’t any solid estimates for what portion of the population identifies as wallflowers, researchers say that they are more likely to be women. And since women make up nearly half of the workforce in most places, bosses and managers would do well to pay attention to the ways they interact with award systems at work.

Wallflowers are hyperaware of potential negative consequences of praise, making it very difficult to highlight good performance. For example, if you call a wallflower an altruist, they might interpret that as being called overly image-conscious and selfishly wanting to appear too good to others.

This presents some challenges for business leaders seeking to raise performance levels by using praise. In one experiment, after being encouraged to make charitable donations, people were told how much others had agreed to donate, and offered the opportunity to change their donation. Most people increased their donation to appear more charitable than others. Wallflowers, however, only increased their donations to match the average figure—and did not exceed it.

Not all praise is created equal

That is certainly not to say that all women are wallflowers, or that women in general respond negatively to awards. In some situations, high-profile, public recognition can have positive effects—particularly when it recognizes underrepresented people. Generally speaking, women put forward their ideas at work less frequently than men, but some awards can reverse this. After public recognition of work by highly talented women, the gap between men and women in terms of confidence to speak up closed.

Jana Gallus of the UCLA Anderson School of Management and Emma Heikensten of Stockholm School of Economics address the fact that collaborative work suffers when talented team members do not feel confident speaking up in meetings. For exceptionally skilled women, recognition of their achievements in front of their male peers led to more contributions in meetings, perhaps because those colleagues are forced to recognize their abilities. If there is any use for awards at all, it is in situations like this, where recognition is as important for the individual as it is for their colleagues.

For highly talented men, on the other hand, public recognition was as effective as private recognition, so there is less importance on recognition in front of peers.

Clearly the consequences of awards reach far beyond the individual who receives them, and those consequences can be unintentionally good or bad. For Robinson, her work on school attendances is on hold, because she does not want to conduct more research that inadvertently encourages students not to go to school.

“I think there is something about attendance that is not award worthy,” she said. “Should we reward people for showing up? It makes me think that awards are given out too often, and we should probably study what signals they send. They seem to make common sense, but we found in this one scenario they do not work. And we should be cautious of their unintended consequences.”

So, should we be using awards at all? The data indicates that it is entirely too complicated for a yes or no answer. Perhaps the days of rewarding people for school attendance are numbered, but they might still have a place elsewhere in society—we just need to be discerning about who we offer them to.