Using Rewards and Consequences Effectively in the Workplace (6 min)

“When we are acknowledged for our work, we are willing to work harder for less pay, and when we are not acknowledged, we lose much of our motivation.”

– Dan Ariely

Now that you understand how rewards and consequences work to influence behavior, let’s take a look at how you can use this knowledge effectively in the workplace. Effective ways of using rewards might include:

• Tailor Rewards to Your Employees – everyone is motivated by different things, and so we must be mindful of offering rewards and recognition that will be well-received by the individual. Some people might thrive on being singled out for public praise while others would much prefer to be acknowledged as part of a team effort, and to share the reward and recognition with their colleagues.
• Moderate the Use of Rewards – excessive use of positive reinforcements can cause employees to only aim as high as the target which is set in order to get the reward, rather than challenging themselves to grow and develop continuously. Setting goals that are progressive can encourage employees to keep seeking to outperform their best performance.
• Balance Team and Individual Rewards – this is important to avoid demoralizing those who are not always ‘winning’ and keep everyone pulling together, rather than seeking individual rewards alone. Incentivizing team behavior is as important in most cases as incentivizing individual performance.
• Reward Exceptional Performance Rather Than Incentivizing the Basics – A study on rewards that were given for punctual attendance and reduced absenteeism showed a long-term decline in these areas and no sustainable behavior change. In cases were bonuses were given for outstanding performance, particularly retrospectively, the measured effects were more positive.
• Diversify the Rewards – money is a strong motivator but can have the effect of changing motivation from intrinsic (I want to do well for a sense of pride and satisfaction) to extrinsic (doing well is a transaction for which I will get a cash payment), thereby removing the intrinsic motivation that was there initially. In some cases, you might do better to offer acknowledgment and praise for a job well done, tapping into the intrinsic motivations that are already present and amplifying the reward.

Check out this video (3 mins) about different ways to offer recognition to employees.

Tips for Making Consequences Effective

• Make Consequences and Expectations Clear – for negative consequences to be effective and fairly implemented, both the expectations and the consequences must be made very clear from the outset. These might be set out in an employment contract, staff handbook or in the company policies and procedures document.
• Be Moderate in the Use of Consequences – if used excessively, negative reinforcements can lead to low morale and an atmosphere of stress and fear among employees. Threats may create a short-term spike in performance but over the long-term, it can be demotivating and destroy trust and respect.
• Follow Through and Be Consistent – once an expectation and a consequence have been clearly set out, it is important that you follow through and deliver the consequences if the need arises. Empty threats and inconsistency erode trust and respect and will undermine your ability to maintain standards in the workplace.
• Be Proportionate – to be seen as fair and avoid alienating or demotivating employees, any negative reinforcements or consequences that are applied must be proportionate to the matter at hand e.g. dismissing an employee for being late on only a single occasion would be generally considered disproportionate and will undermine the respect and trust that employees have in you to make fair and rational decisions.
• Be Timely – Operant Conditioning theory tells us that the proximity of the consequence to the action makes a difference in how effective it is. A negative consequence that comes a long time after the infraction or poor performance is less likely to have an impact on future behavior than one that comes immediately.