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Incentives Don't Work

Updated: Dec 30, 2022

Hello beautiful humans!

Incentives are proven... PROVEN to not always work effectively in today's business world. I know, I know, I didn't believe it at first either. After watching a video of Dan Pink, (cited below), I had to check out the research myself and here is what I found.

Now, before I go into the facts of what I found, I should say that I don't agree entirely. I believe that the right incentives can have an effect, however, it did not seem to be a lasting effect. What I have realized (as I look back at my years of offering PTO, gift cards, and other such incentives) is that they didn't last. It was only a temporary motivation. Employees participate and were engaged at first, but it didn't take long at all for their initial motivation to wane, for them to lose interest and revert back to their previous work habits.

Three reasons incentives don't work

This is not to say that incentive programs never work, they sometimes do. Think about your own experiences both on the giving and receiving end of incentives. You may began to see patterns that you had not noticed previously. I did!

Reason #1 - Lack of Value

One reason is as simple as value. My employers weren't valuing me, my ideas, skills, talents, or efforts. They were only valuing the end goal. After jumping through the necessary hoops to obtain the incentive, I would often believe that the effort was not worth the incentive in the first place. This led to less and less participation in the incentive program until the employee, at least in my case, no longer participated.

When incentives do work: On a short term basis. You never want your staff and employees to feel they aren't valued for contributing to the company or business. So keep the incentives short term and make the incentive something that shows how much you appreciate and value the efforts to attain the goal. Ask them what they want instead of what you want to give them. You can usually find some middle ground to meet them on.

Reason #2 - Loss of Quality/Quantity

Another reason they didn't work for long is because they decrease efficiency. Unfortunately, in order to obtain the incentive, quality and/or quantity (more often quality) suffers. In this case, it is normally the company that ended the program with the understanding that a decrease in quality was not an acceptable sacrifice to quantity and/or vice versa.

When incentives do work: When the loss is worth the gain. Maybe the goal is to increase the quality of a product or process. Analyze what the acceptable loss of quantity is going to be. You won't tell your staff "it's ok if your production falls behind as long as quality is up", but you will know when the loss is no longer acceptable and its time to pull the plug on the incentive program.

Reason #3 - Lack of Focus

Finally, probably the most compelling reason they do not always work is talked about in the afore mentioned TED Talk presentation with Dan Pink. His most intriguing findings, in my opinion, are related to Sam Glucksberg (cited below) and his experiments utilizing the candle problem.

Basically, Gluckensberg ran an experiment with two separate groups. One group he offered a monetary incentive to complete the candle problem in the quickest amount of time. The second group was not offered an incentive and were simply asked to find a solution to the candle problem. The participants offered an incentive actually took longer than participants who were not offered the incentive.

Sounds ridiculous, I know, but among the conclusions he came to (simplified) is that operating based on incentive, the participant's stifled their creativity. Their focus was not only on the puzzle but paralleled by the thoughts of 'I have to be the quickest to get that incentive'. Because their focus was shared with two lines of thought, they were unable to give their complete attention to solving the problem. The participants not given the incentive were free to focus entirely on the problem at hand and were not preoccupied with thoughts of trying to get it done as fast as possible. Therefore, they were able to complete the puzzle more quickly.

When incentives do work: When the task is...simple! When the task is mechanical, maybe even routinely repetitive, requires little focus or need for detail or thought. Caution: It may seem like many tasks and jobs would fall into this category, but don't be fooled! Even some of the most mundane tasks require much more thought and focus than you might imagine.

Are you seeing the pattern here? Incentives create a lack... lack of value, lack of quality, lack of production, lack of focus, lack of creativity... lack, lack, lack.

How to create motivation without traditional incentives?

Pink gives a few examples in his presentation, I'm going to reference two of them here (both are cited below).

Atlassian is an Australian software company that hosts a 24 hour period where they allow employees the freedom to work on any personal idea that relates to the company's product line and aligns with their values. Employees who participate then share their idea in presentations 24 hours later. This has been wildly successful for their company having many new services/products produced by this simple, engaging employee program.

Another is the motivational model utilized by Google. Google allows its staff to spend 20% of their time working on their own ideas that will be of benefit to Google. Ideas such as Google Maps. That's right! One of Google's (and perhaps the internet's) most used resources worldwide came from an employee's idea that they were allowed to work on because of this motivational strategy.

Kaizen is yet another model that is used by Toyota. It focuses on allowing all of its employees, from the janitor to the CEO and everyone in between, to participate in 'continued improvement' throughout the company by offering ideas that will affect their direct environment. It could be as simple as adding a 'hotkey' for repetitive typing phrases or a picnic bench for breaks to as big as logo change or marketing shift. The company can then utilize a team to discuss new ideas and decide what is within budget and 'doable' that will provide the best overall improvement for the company and its workers.

These types of motivation all show an appreciation of employees and that their contributions have value within the company. In turn, employees feel included, engaged and involved in the company's progress and growth.


Create a motivation strategy that will include members of different departments and encourage their ideas for making improvements to the company just to see what they come up with. If nothing else, it will create an atmosphere of inclusion, promote problem solving and idea sharing and build comradery among employees. You may even find a strategy that you can build on an incorporate within your company as an ongoing employee engagement and motivation model.

Morals of the Story:

  1. Incentives are only successful when they are temporary, applied to menial tasks and often require sacrificing quality, productivity, etc.

  2. Incentives stifle creativity and do not take advantage of the talents, skills and ideas of workers.

  3. Allowing programs that nurture and promote employees to share their ideas are proven successful.


Dan Pink Ted Talk Presentation

Sam Glucksberg Candle Problem Experiment

Atlassian Ship It Day

Google 20% Time's%20%E2%80%9C20%25%20time,wrote%20in%20their%20IPO%20letter.

Toyota Kaizen

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