29 September 2013
The Dirty Truth on Rewarding Employees
I found an article that sparked my interest on the Harvard Business Review’s Working Knowledge website for many reasons but primarily because it was an article that discussed the real impacts of rewarding employees for certain things in the workplace, which I feel is a very important aspect of management in the workplace. In “How to Demotivate Your Best Employees” by Dina Gerdeman, she takes very important pieces from a recent paper called The Dirty Laundry of Employee Award Programs: Evidence from the Field, written by Harvard Business School Assistant Professor Ian Larkin, along with ...view middle of the document...
In order to deter from consequences, many companies look for incentives and rewards for doing the right thing. According to the plant managers in this study, not coming to work affects them at a higher level since it is a plant and one employee not showing up for work causes employees at work to suffer because the one person absent has to be there in order for the others to be effective at work. The program implemented at the plant started in March 2011 and lasted nine months and the employees with perfect attendance for a month, including no unexcused absences or tardy shift arrivals, were entered into a drawing to win a $75 gift card to a local restaurant or store; the winner's name was drawn at a meeting attended by all the employees. At the end of the sixth month, the plant manager held another drawing for a $100 gift card for all employees with perfect attendance records over the previous six months (Gerdeman, 2013). The study showed that there were benefits but because of the nature of our society, there was also “gaming” the system in order to be eligible for the reward program. While there were increases in the punctuality of the employees that were known for absences and tardiness, there were also a demotivation taking place with the employees that had consistently been punctual and productive. The study found that employees that were already doing the “right” thing at work felt left out when they saw that the winners of the program were employees that just changed for the “rewards” instead of those who habitually were on time. After the program was underway some employees reverted to their old ways which included being tardy and now because the usual punctual employees were demoralized due to not winning the awards program there was an increase in lack of productivity all stemming around the implementation of the reward program. So the main reason this program was put in place was to stop the loss of money and productivity that tardiness and absenteeism caused and it actually ended up adding to the deficit.
While this article attacked this reward program, there is a silver lining in this case because not all programs are more detrimental than beneficial but the key to determining the best course of action for your organization would depend on the overall mentality of your employees. The researchers in this instance concluded that “rewarding one behavior sometimes can "crowd out" intrinsic motivation in another” (Gerdeman, 2013). So to...