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Well make up your damn mind – do rewards motivate or don’t they?

Posted Apr 15 2010 1:12am

MotivationFor a long time, rewards were the be-all and end-all of motivation. Everyone knew that the way to encourage people to achieve better results were to reward better results. Bonuses, incentive schemes and pay grades were created to implement this.

Then science starts interfering and pointing out that, actually, rewards only motivate in a very narrow set of circumstances and that there is a huge gap between what science knows and what business does. That’s what Dan Pink talks about in his excellent TED presentation .

Now the effect of rewarding students for performance and good behavior in schools have been tested very rigorously and the results appear in this excellent Time article , according to which some rewards do lead to better performance.

So which is it? Do rewards motivate us to shine or don’t they? This is not only interesting for schools, the findings may apply to businesses as well.

Some background:

A Harvard economist named Roland Fryer Jr. did something education researchers almost never do: he ran a randomized experiment in hundreds of classrooms in multiple cities. He used mostly private money to pay 18,000 kids a total of $6.3 million and brought in a team of researchers to help him analyze the effects. He got death threats, but he carried on. The results represent the largest study of financial incentives in the classroom — and one of the more rigorous studies ever on anything in education policy.

The results were surprising:

The experiment ran in four cities: Chicago, Dallas, Washington and New York. Each city had its own unique model of incentives, to see which would work best. Some kids were paid for good test scores, others for not fighting with one another. The results are fascinating and surprising. They remind us that kids, like grownups, are not puppets. They don’t always respond the way we expect.

In New York the study resulted in no improvement in test scores. Fryer called the results “as zero as zero gets.” New York was ironically the city where students were rewarded for better test scores.

The program that got the best results was in Dallas:

Schools in Dallas got the simplest scheme and the one targeting the youngest children: every time second-graders read a book and successfully completed a computerized quiz about it, they earned $2. Straightforward — and cheap. The average earning would turn out to be about $14 (for seven books read) per year.

So what might explain the difference? Why did one scheme fail while another got results?

I think the answer might lie in the fact that the NY scheme rewarded results while the Dallas scheme rewarded the process, ie. the actual steps towards the results.

I’m going out on a limb here, but I do think that this carries directly over to the business world. At work it is more motivating to reward effort rather than results because while results are rarely directly under your own control, your efforts are.

In other words, you can work your butt off on a project or a sale and still not get it because of factors completely outside of your influence. Or in the current crisis, you can work hard to meet your sales budget, but there’s no hope in hell you will, because the entire market is down 15%. Conversely, you might be a no-good, talentless slacker but due to a general increase in the market or one windfall client you still reach your goals for the year.

This is what Srikumar S. Rao talked about at our last conference, where he encouraged the audience to focus on the process, not the outcome .

Go read the whole article at – it’s fascinating stuff.

What do you think? Do rewards motivate you? How and when do you like to be rewarded? Are there any circumstances where rewards tend to demotivate you? Please write a comment, I’d love to hear your take.

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