Punished By (Poorly Conceived) Rewards

My copy of Alfie Kohn's Punished by Rewards has been sitting on my desk for several weeks, as I've been piecing together this post.  What finally prompted me to complete it was Paul Hebert's (Incentive Intelligence) post and his responses to some of Mr. Kohn's precepts.  Here are mine.

As many of you probably know, Kohn's book is essentially an indictment of rewards, or what he calls "carrot and stick psychology" in the workplace, the classroom and the world in general.  If you are a rewards professional and haven't yet read it, I recommend that you do.  His perspective is one that you should know and appreciate, even if you don't always (as I don't always) agree with it. 

As the centerpiece of his argument against workplace rewards, Kohn puts forth The Five Problems with Rewards ... at Work.  I'd like to highlight and respond to each of these in turn, based on my own experience in and knowledge of the field.

1.  Rewards punish.

Kohn says "In some circles, it is no longer necessary to make the case that punishment destroys motivation:  this fact is already understood."  I believe you'd be hard pressed to find a reward professional, or any other student of management, who speaks out in favor of punitive management practices of any kind.  Not only because they don't work, but also because of their destructive impact.  The success of Bob Sutton's book The No Asshole Rule would suggest that most of us finally get this.

Having said that, however, it is disingenuous to pretend that negative consequences have no place in the adult workplace.  Failure to perform the job for which one is hired can - and typically does - lead to consequences more serious than withheld rewards.  Along with any other things it represents, the employment relationship does have at its heart an economic transaction in which both parties agree on certain expectations that will be met as part of the exchange.  And while we don't effectively manage people simply by either providing or witholding rewards (though I've seen it tried), rewards - along with clear communication, regular feedback, coaching and development - are a valid component of the overall management toolkit.

2.  Rewards rupture relationships.

Relationships, Kohn tells us, "are casualties of the scramble for rewards."  Using individual rewards to pit people against each other in an environment where they need to work together is, frankly, stupid.  Of course, such a practice would "discourage the social support and sense of belongingness", as Kohn notes.  Reward professionals understand that effective reward practices must strike a balance between recognizing the role of the group and the role of the individual employee.  Tipping that balance too much in one direction or the other inevitably causes problems - much like the problems that Kohn alludes to.

3.  Rewards ignore reasons.

"The point here is remarkably simple," Kohn says.  "In order to solve problems in the workplace, we must know what caused them."  Not to be flippant, but ... duh!  No reward professional worth their pay would overlay an incentive plan on a workplace issue without first seeking to understand the root causes.  I find that nearly half of the incentive plan "feasibility studies" that I conduct end with the conclusion that there are a number (sometimes a big number) of needs that must be addressed (which can range from communication to process improvement to management development) before any incentive plan should be put in place.  And I have difficulty believing that I am alone here. As I am fond of repeating, incentive plans support, but are no substitute for, sound management practices.

4.  Rewards discourage risk taking.

Kohn relates the following anecdote. "'People will do precisely what they are asked to do if the reward is significant' enthuses one proponent of pay-for-performance programs.  And here we have identified exactly what is wrong with such programs."  And he's right.  Rewards that are too singular in their focus, or so heavily weighted (as part of the overall pay package) as to disproportionately and inappropriately influence behavior, do tend to produce problematic results.  As incentive guru Jerry McAdams is fond of saying, "Be careful what you reward, for you will surely get it."

Reward professionals understand that the design and implementation of effective rewards demands careful consideration of and planning for the potential consequences - intended and otherwise.

5.  Rewards undermine interest.

Kohn's point here is that "extrinsic motivators not only are less effective than intrinsic motivators, but actually reduce intrinsic motivation."  While this is certainly true in many cases (again, with ill-considered and ineptly implemented rewards), I have difficulty believing that it is true across the board, and that intrinsic and extrinsic motivation are always mutually exclusive.

Bottom line, I think there is a fundamental difference between the way Kohn views rewards, at their very core, and they way that I do.  He sees them as a bribe, a way to get people to do what they wouldn't otherwise be willing to do.  I see them as a form of partnership; which is what I believe the employment relationship represents at its best, a way of creating and sharing success.  It is a dialogue, as in the example of a group incentive plan where leadership says, "These are the things we must accomplish together, as an organization, to be successful.  Help us get there and we'll share the value generated by that accomplishment."  In this context, the incentive provides important directional cues - as Paul Hebert notes in his post - as well as an agreement to work together and share the benefits. 

Getting this agreement right, which is admittedly a challenge, can be a very powerful, positive thing.  I've seen it first hand.  To convince me otherwise is asking me to disbelieve my own experience.

In summary, I do want to say that Kohn does us all a service by calling attention to the often misguided and flawed programs which are put in place in an attempt to improve performance.  The essence of my issue with his perspective, however, is that he paints all reward efforts with the broad brush of condemnation using arguments and examples that, in fact, represent very poorly conceived and implemented practices.  Not only is this incorrect, but it is also insulting to those of us who work diligently to ascertain where rewards will make a positive contribution and where they will not, and who apply the principles of sound reward design to their development and implementation.

So, there it is. 

My blog is blessed with a lot of smart readers.  I would welcome your thoughts and responses to this, particularly if you're familiar with Kohn's work. 

Comments

[Frank Giancola]

Ann,

More food for thought from W. Edwards Deming, the reknown quality guru who is given credit for making Japan a manufacturing powerhouse that provides Americans with many of the material goods that they prize so highly.

These are among his 14 points for transforming management effectiveness:

Eliminate slogans, exhortations, and targets asking for zero defects or new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

Eliminate numerical goals, numerical quotas, and management by objectives. Substitute leadership.

Remove barriers that rob people of joy in their work. This will mean abolishing the annual rating or merit system that ranks people and creates competition and conflict.

One of his main points---While management tends to blame their employess for the company's troubles, Deming believes that the fault is more with the processes and systems that management has saddled them with to do their jobs.

Frank Giancola

[Ann Bares]

Frank:

Thanks for the comment and for sharing the Deming wisdom. I will agree with his point about systems - in fact, I include a quote from him in a performance management course I teach: that 94% of performance outcomes are attributable to the system. When I advise clients NOT to implement incentive plans (or to at least postpone them), most of the time it is because the performance issue being addressed is clearly a system issue, not a people motivation issue. Some colleagues of mine would argue (and have) that if you hold out a large enough carrot, the people will deal with the system issue. This may be true in some cases, if the broken aspects of the system are under their control. If not, putting a carrot out there that they have no way to reach only frustrates and demoralizes people. Again, I think it comes back to a careful assessment of the circumstances to determine whether rewards would be helpful or hurtful.

Does Deming advocate eliminating all goals and objectives? Or only numerical ones. What is leadership, if it doesn't include clear communication of the desired end result?

[Frank Giancola]

Ann,

You have asked some good questions, and he appears to have gone a bit overboard on some points, but unfortunately I do not know enough about his work to answer them.

What I have found to be valuable in his work is the thought that good work systems have just as much to do with results as employee performance. We are too quick to assume that if the company is not getting the results it wants, something is wrong with the people and how they're being rated, not with the work systems (policies, processes, directions,equipment,budgetrestraints, etc.)

It's a common management cop-out for their failures.

Frank

[Ann Bares]

Agreed. Deming's assertions about the importance of systems are very valuable, particularly for those of us in the reward profession.

I also agree with the thought that he goes a bit overboard on some points (although I will allow that it may simply be that I'm not familiar with his teachings on a deep enough level). I feel the same is true for Alfie Kohn. He sheds light on some important and valid points, but then pushes them to such an extreme that he leaves his credibility open to challenge.

Thanks again for your comments!

[Kris Dunn]

Ann -

That's pretty deep material and I agree with your points. As more of a layperson with rewards, my focus has been to keep them moving. I think some of Kohn's concerns can happen, but only if programs get stale. My preference is to move back and forth - individual and team, etc. to keep programs fresh and prevent the thing from seeping into entitlement...

KD

[Ann Bares]

Kris:

Thanks for checking in and sharing a comment. I agree that it is important to keep reward programs fresh and relevant, which requires regular reviews and retunings. I also agree that any and all of Kohn's concerns can happen when programs are not well-conceived or well-maintained. I just don't believe that they're a given.

[Paul Hebert]

As with any management or business strategy/tactic - there isn't a single answer. The pendulum should be in the center - not at either side.

Deming's reliance on systems and Kohn's distaste for rewards show - there is evidence that both strategies work (and don't work.)

The fact that there is disagreement demonstrates the need for analysis and probably more importantly - synthesis - when it comes to management of people.

If systems didn't rely on people - and people didn't rely on systems neither point of view would be valid.

Your most recent post Ann - highlights the fact that judgment is needed in all these cases - and that is why we have management.

Judgment brings the pendulum back to center when it swings too far in one direction or the other.

[Ann Bares]

Paul:

Great summary. Any point of view - when pushed to its extremes - ultimately loses its credibility.

And there doesn't seem to be any escape from the need to apply judgment - and temperance - in business management.

Thanks!

[Charles H. Green, Trusted Advisor Associates]

Excellent posting, Ann, and thanks for linking it to my own (much more whimsical) post over at Trust Matters http://trustedadvisor.com/blog/308/When-Incentives-Backfire

David Maister, among others, makes a good point in this arena. At a certain level of scale, and at a certain level of transformational depth, the way you get things done must rely less and less on process and extrinsic motivations, and more and more on principles and values.

I once heard a sales manager say the job of a sales manager is to do the right thing--despite the incentives.

I once heard the CEO of a major consulting firm, in answer to a question about the absence of incentives to support a particular move, say, "I don't want anyone putting internal incentives in place that are just transfer pricing; you have to trust your partners to do the right thing, and if you don't, it's not an incentive problem you've got, it's a trust problem."

Both are right, I think, yet so are you. So the question is now "who's right," but "what are the conditions, or in what respects, is your point more valid, and is Kohn's point more valid?"

I'm not sure of the answer, though again I suspect it may have to do with complexity? Or depth of personal change required? Other ideas?

Again, great post, and written in a very right way.
Thanks.

[Richard Dillard]

Go back and read, really read Alfie Kohn's work "Punished By Rewards" or "No Contest; The Case Against Competition", and W. Edwards Deming's work "Out of the Crisis". Become a student of systems and commit to learning what they have to teach. Read Peter Scholtes "The Leader's Handbook" or Meg Wheatley's "Leadership and the New Science". Understand all you can about Deming's Profound Knowledge System (what the 14 points were based on): Theory of Knowledge, Systems Thinking, Variation, and Psychology, and begin to get a better handle on common vs. special causes of variation, operational definitions, and the customer principle. One of the best things I ever read was: "All of the empowered, motivated, teamed-up, self-directed, incentivized, reengineered, and reinvented people you can muster cannot compensate for a dysfunctional system. When the system is functioning well, these other things are all just foofaraw. When the system is not functioning well, these things are still only empty, meaningless twaddle." -- Peter Scholtes, The Leader's Handbook

These men are not pushing anything to extremes, rather simply confronting the brutal facts. What Deming, Scholtes, and Kohn (as well as others) suggest has not been tried and found wanting, it has been found difficult and left untried. If they are not enough, consider the work of Frederick Herzberg or Douglas McGregor, but for goodness sake, I beg you, open your mind fully to their point of view. You've already taken the first step by recognizing you don't know enough about what these men are advocating. Come full circle.

Finally, consider the following flawed assumptions (from Scholtes, The Leader's Handbook) behind just the performance appraisal itself...something every pay-for-performance program depends on at its core:
- Evaluation will improve an employee's performance.
- The employee being evaluated has [total] control over [all] the results.
- The employee's individual contribution can be discerned from the contributions of the system and other managers and workers in the system.
- All processes wiht seemingly identical equipment, materials, training, job descriptions, etc., are, in fact, identical.
- The standards of evaluation are related to factors demonstrably important to the business and its customers.
- The standards are reasonable and achievable.
- Each system in which an employee works is stable adn capable of delivering the expected results.
- The evaluation covers performance over the entire cycle of evaluation, not just the period recallable by recent memory.
- All evaluators are consistent with each other.
- Each evaluator is consistent from one employee to the next.

And just so you know, I'm not being overly critical of your point of view, simply suggesting that there is a more useful one to improving individual, group, and organizational performance. By definition, all theories (points of view) are valid, some are just more useful than others. I believe Deming, Kohn, Scholtes, et al., have the most useful theory on motivation and systems.

Perhaps one of the best ways to digest their theories is by reading a new book called "System Accidents" by Thomas A. Smith. Smitty breaks down the most difficult concepts (too quickly rejected by many) into easily digestible kernels of performance improvement truth by applying it to the field of occupational safety.