What to Do When Rewards and Incentives Don’t Work

UPDATED: May 22, 2023
PUBLISHED: February 4, 2016

As a leader, what do you do when:

  • a star employee seems to be showing signs of slowing down?
  • sales reps are barely making their numbers despite the new product line introduced to jumpstart sales?
  • the committee responsible for putting on the company’s 25th anniversary party requested employees to send in self-shot videos telling a personal story about working there—and they’ve only received four entries? (The committee was counting on showing at least 12.)

If you follow conventional practices when it comes to motivation, you incentivize, reward or pressure people to perform. So you:

  • offer the star employee a raise, the corner office or a prestigious assignment.
  • incentivize the product line, hoping the bribe stimulates sales reps to sell it. As extra incentive, you set up a new condition—if a sales rep makes his numbers but hasn’t sold enough of the new product line, he’s ineligible for the annual sales reward trip.
  • announce a contest to encourage video entries with an iPhone 6 as the prize for getting the most likes for your video. You send out one of the entries already received, declaring that it sets the standard to beat.

Now you wonder why the sales reps failed (or succeed this quarter and fail miserably the next), the committee never received any more video entries, and the star employee quit anyway.

Related: Stop Trying to Motivate People—It Won’t Work

What happened? To borrow from the old “carrot and stick approach” of leadership, which provides a combination of rewards and punishment to induce behavior, you beat your people with carrots (the rewards that were supposed to motivate them).

Instead, take advantage of the compelling science of motivation based on this premise: People want to thrive. Contrary to conventional wisdom, no one wants to be bored, disengaged, disconnected, useless, victimized or incompetent. People will take the carrots and yield to the stick, but they yearn to thrive.

What motivates people to thrive in the workplace? It’s not money, power or winning. Not promotions, raises or benefits. Not beauty, image or status. Those are recipes for suboptimal motivation and long-term disengagement.

The best motivation comes from the three basic psychological needs: autonomy, relatedness and competence, or ARC. These three needs are as essential as the “big three biological needs” for water, food and sex. When psychological needs are satisfied, people flourish. When these needs are undermined, people languish. 

Related: The Science Behind Why You Don’t Feel Motivated

When the reason for motivation is suboptimal such as the promise of a reward, the hope of gaining power or status, or acquiescing to pressure, there is no way people can experience the positive energy, sustained vitality and sense of well-being that comes from satisfying ARC.

You can wean your employees off carrots and hang up your stick by adapting motivation best practices that support people’s autonomy, relatedness and competence:

1. Encourage autonomy.

Frame deadlines as useful information critical for achieving important goals rather than sticks for applying pressure.

2. Deepen relatedness.

Reframe metrics that have no emotional meaning. Conduct motivational outlook conversations with employees to help them attribute their own sense of meaning to critical organizational goals and outcomes. You cannot impose your values or feelings on others, but you can guide their exploration of values and sense of purpose they find compelling.

3. Develop people’s competence.

Focus on setting learning goals, not just output goals. Shift your focus from accomplishment to building competence. Instead of just asking, “What did you get done today?” try asking, “What did you learn today?”

4. Promote mindfulness.

Prompt awareness of options a person may not have considered. Ask questions such as “Why is this important to you (or not)?” and “Why are you finding this goal so challenging (or rewarding)?” These simple yet powerful, open-ended questions help individuals rise above patterns of behavior that often sabotage their best intentions.

5. Align with values.

Conduct a values conversation with individuals you lead. They may have succumbed to suboptimal motivation based on money, rewards, incentives, power, status, fear, pressure, guilt or shame because they have not consciously or deliberately aligned their work to meaningful values that generate sustained positive energy, vitality and sense of well-being.

6. Connect to purpose.

Your organization has probably spent enormous resources crafting and socializing its vision, purpose and mission. Now help individuals do the same. Encourage the people you lead to develop their own workplace purpose statements. There are few things in life more powerful than acting from a noble purpose.

Related: 3 Ways to Stay Motivated and Keep Moving Forward

Susan Fowler is widely known as one of the foremost experts on personal empowerment. Her extensive experience and knowledge gained through 15 years of advertising, sales, production and marketing across the United States has fueled her quest to help individuals achieve their highest levels of success. Susan is a catalyst for CHANGE through Compelling evidence, Humor, Accelerated learning, Next steps, Global perspective and Emotional connections. She is the co-author of more than six books, including Why Motivation Doesn't Work... and What Does and Self Leadership and the One Minute Manager with Ken Blanchard and Laurie Hawkins.