Why Rewards Fail

Performance Improvement using rewards is fundamentally flawed because employee behaviour has many psychological factors associated with it. The cost involved in fine tuning compensation so as to boost productivity and morale of employees is considerable. We can examine these costs in the following framework. 1. Pay is not a motivator It is believed that more pay would result in better work. However, when asked What do you care about? Usually pay ranked only fifth or sixth. Frederick Herzberg, distinguished professor of Utahs Graduate school of Management, has pointed out that demotivation due to little money cannot be construed to mean that more money will increase satisfaction much less motivation. 2. Rewards punish Frederick Herzberg had illustrated some hygiene factors (KITA) that lead to job dissatisfaction. These factors will provide movement but not motivation. Rewards can be manipulative and the experience of being controlled is likely to have punitive connotations over time. The effect is the same for a person who hoped for a reward but did not get it. The new school is essentially rewarding people who are doing things right which is no different from the old school who punish people for doing things wrong. In both cases, people feel controlled which is not conducive to learning, exploration and progress. 3. Rewards rupture relationships Cooperation is destroyed when people compete with each other for rewards and gains. Teamwork seems to falter which in turn affects quality in production. Even unwanted behaviour is encouraged where a subordinate conceals a problem from the manager when they ought to ask for help. This relationship of manager and subordinate can collapse under the weight of incentives. 4. Rewards ignore reasons Reasons such as rigidity in organization, ineffective collaboration or inadequate preparation for job are not addressed or ignored when considering incentives. It is more often treated by managers as an outcome for doing a good job. This only reduces the managers leadership skills because very less effort is needed to push subordinates to work with the lure of rewards. In fact, Jone L. Pearce, associate professor of University of California has found that pay for performance actually impedes the ability of managers to manage.