Incentives and status

More than the stated target

An incentive changes the benefits or costs attached to an action. It may also change what that action means. Gneezy and Rustichini’s daycare field study found increased late pickups after a fine was introduced. The study illustrates an unintended response in a particular setting; it does not show that fines generally fail or that parents share one motive. [1]

Rewards and motivation

Deci, Koestner and Ryan’s analysis found that some expected, tangible reward arrangements reduced measures of intrinsic motivation, while positive feedback could have different effects. The type of reward and the activity matter. It would be an overreach to conclude that pay is unnecessary, that recognition is always helpful or that all people respond identically. [2]

An everyday example

Illustration: A workplace recognizes the person who closes the most requests. Speed becomes highly visible, but accuracy and help with difficult cases may be less visible. A worker who asks for balanced measures is raising a question about the system’s priorities. The ranking alone cannot establish which employee contributed most or why someone pursued a particular target.

A useful reflection

Ask what behavior receives the reward, which useful behavior is omitted, and who bears the costs if the measure is pursued too narrowly. When status is involved, compare the actual benefit with the effort needed to maintain the appearance of success. Evaluate a rule’s observed effects rather than assuming its announced purpose proves its results. Revisit the design when the behavior and intended outcome move apart.

Related learning

Belonging and social influence

Consequences and learning

Patronage, appointments & state capture

Oligarchy, wealth & plutocracy

External Resources