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Why employee rewards don't work

Years ago, I had an editor who gave reporters a bonus if he thought we wrote a well reported story. That was a nice perk but most of us would strive for a well reported story even without the bonus.

Would it surprise you to learn that there is not a single study that has shown an improvement in the quality of work as a result of any reward system?

In fact, according to Alfie Kohn, researcher and author of Punished by Rewards, the more employers use rewards to motivate employees, the more they tend to lose interest in whatever they had to do to get the rewards.

So what does it take to motivate employees? Kohn says the best reward is the job itself. Pay a decent salary, assign interesting tasks, create a sense of community and give employees a  chance to participate in making decisions. He says employees that have those things rarely choose to go back to a place where employees get rewards. He says pay people fairly, then do everything possible to take money off their minds.

Of course, there are consultants who insist that rewards systems work and there are employees who say they will do just about anything to be rewarded with time off.

Today, I asked Dan Hoffman, CEO of NYC-based M5 Networks and a forward thinking leader, what he thought of motivating employees by using rewards. “I think it’s dangerous to tie people to a number and put cash next to it. I view rewards as way to communicate what’s important.”

For example, he says, his company had a contest to find example of the best way to tell someone bad news. He sent the winner to space camp for weekend. (Sounds cool!) That’s a reward he says his employees go nuts for "but it’s also a message that this is a fun place to work," Hoffman says.

That’s different than using rewards to as incentives for people to work hard, he explained to me. "We also pay a bounty to anyone that helps us recruit. It’s our way of sending the message that good people are important and we want to hire your friends."

I wonder if the recession has changed how employees view rewards. When our paychecks have been cut, will cash rewards motivate us differently than in the past?

What do you think about rewards? Do you find them motivating?