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Rewards – Perks For Productivity or Insult To Injury?

Are little non-cash rewards like movie passes etc just the grown-up equivalent of a primary school gold star &, if so, is that a bad thing?

Leaders, managers, supervisors – all those who are charged with the responsibility of producing improved results through other people – are constantly on the look-out for ways to provide behaviour reinforcement to those people. Why? Because, for their entire careers, that’s what they’ve been taught is the smart thing to do. Maybe they’ve even had some experience of it working. Carrots and sticks, positive reinforcement, negative reinforcement, punishment and extinction (look it up.) It sounds plausible – reward the behaviours we want more of and disincentify those we want less, or none, of. Antecedent, behaviour and consequence. To this approach, in general terms I say, “Yeah Nah.”

Christopher Shea recently blogged briefly in the Wall Street Journal about rewards – gifts for staff for performances rendered. It’s interesting. It references a German economist’s study of the relative effectiveness of little cash rewards versus little equivalent gifty rewards. The moral of the story and it’s hard to argue with this = it’s the thought that counts. Check it out.

If you’re in a leadership role & you’re seriously considering slapping a $7 coffee mug on someone’s desk for “doing a bang-up job and just being a real trooper”, then maybe you should stop reading blogs about leadership and start reading fortunes in chicken entrails? That way you might be awakened to the possible future consequences of such a dog-treat approach to motivating people. If it’s the thought that counts (and it is) then give the thought via ongoing, sincere, specific, esteem-building, behaviour-based and timely feedback. Put the $7 in a jar. Soon enough, it’ll add up to a morning tea team soiree which is probably more effective than individual tokens which may do more harm than good.

Interesting as it was, that study was even more so after some recent reading I’ve been doing on the lie that is behavioral reinforcement in the workplace. Employees are grown-up human beings not kids or dogs. Chucking them a treat is supposed to reinforce ongoing performance improvement? I think that is true sometimes and people in robotic linear task-oriented jobs may well respond to these if they are done well.

Neverthless, if you have ordered 144 coffee mugs printed with the slogan, ‘You don’t have to be mired in 19th century management thinking to work here but it helps’ you may as well distribute them to your team – assuming they haven’t left for better jobs at the performing seals’ circus.

Coffee, Loyalty And Motivation?

Endowed progress concept exemplified by contrasting coffee loyalty cards

How many coffee shop loyalty cards do you have?

How many coffee shop loyalty cards do you have? (If you have more than one, you may wish to consult a dictionary for the meaning of the word ‘loyalty.’) Do they all operate the same way? Think about all the old-fashioned loyalty cards you’ve seen. Not the new electronic point-collecting plastic cards with magnetic strips or microchips. Think of the timeless dog-earred cardboard ones with ten squares or cups or whatever and purchases earned a stamp or a holepunch. At some delicious and delirious future time, you get that tenth stamp and the next cup is FREE!!! It’s like Christmas but without the immense tension, family drama and homicidal / suicidal thoughts.

Did those cards affect your behaviour? Did they drive your decision-making? In what ways? Which type of cards were most successful – for the cafe? The whole point of those things, one would presume, was to increase profit in the long run for the cafe. They’re not giving you free coffee because you’re awesome. (This is no way belittles your actual level of awesomeness.)

In 2006, a study was done at a carwash contrasting two different approaches to loyalty cards. Half the cards were normal ‘get eight stamps, get one free’ cards. The other half were the same except that the card needed TEN stamps but the first two stamps had already been given. For that second group of cards, the first purchase was, in effect, the THIRD stamp.For the business, the cost was the same for both types of card – the customer still needed to buy eight carwashes.

And this had what impact?

19% of the first group of cards got redeemed up to the tenth and final stamp thus rewarding the customer their freebie. And how did the second group of cards go? 34%! Almost double. AND they filled their cards quicker AND as they got closer to completing their card, the gaps between carwashes diminished. The closer they got to their ‘goal’, the more active they appeared to be pursuing it.

That’s interesting in and of itself if you’re running a business and considering implementing a loyalty card. That’s not what I’m writing about though. This is just a demonstration of a good old predictable human trait called ‘Endowed Progress.’ People are more likely to progress towards a goal if they perceive that they have already made progress towards it.

How can we help others move towards their work and life goals leveraging the endowed progress effect? Weight loss or a promotion are common goals. Although both would be better expressed using something like the SMART model. (Specific, measurable, attainable, relevant and timebound. “Lose 10kg in 3 months etc”) Somehow we / they need to give themselves credit for the progress they’ve already made before they officially start. The weight loss or getting promoted equivalent of two free stamps.

Conversely, people can experience negative effects with endowed progress. Ever waited for a bus? The bus is late. The bus is later still. Maybe the bus isn’t coming at all? Again, research indicates that the more time we invest in waiting for something, the more irrationally attached we become to continue waiting. (That said, you just know that the moment you walk just far enough away, the bus will come around the corner… psych!!)

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