The Surprising Truth About Incentives

There is a longstanding belief in corporate America that financial incentives are the most powerful motivator of performance. The findings of various studies by behavioral psychologists suggest otherwise.

In Drive: The Surprising Truth About What Motivates Us (Riverhead Books, 2009) author Daniel Pink outlines the potential unintended consequences of using monetary incentives exclusively: extinguishing intrinsic motivation, diminishing performance, crushing creativity, encouraging unethical behavior, and fostering short-term thinking. Rather, he says, “autonomy, relatedness (connection with others) and competence (a sense of mastery, accomplishment and achievement) are the core human needs and key intrinsic motivators.”

Further research shows that people perform much better when they feel that their personal values and ideals are aligned with those of their organization and where they derive meaning from pursuing the company’s mission. To be effective, incentive systems must address these intrinsic motivations and acknowledge employee successes in accomplishing the organization’s clearly defined set of goals. A successful incentive system promotes full employee participation by offering a wide array of rewards and keeping employees motivated to participate.

BEYOND FINANCIAL INCENTIVES

Incentive travel is an important part of this wide array of rewards. Exotic travel with colleagues has been found to activate intrinsic motivation for the following reasons:

  • It is more tangible than money. People are ultimately motivated by “what money can buy” rather than money itself.
  • When incentive travel is carefully customized it feels more personal and individual to the employee being rewarded.
  • It enhances an employee’s sense of “relatedness” when one travels with colleagues on a “company” trip.
  • The “emotional” benefits of rest, entertainment, and education continue to motivate long after the trip has ended.
  • Money tends to disconnect people from one another, while travel seems to further connect employees to the organization that entertained them.

THE POWER OF IMAGINATION

Meeting planners who design incentive travel understand the importance of imagination in motivating behavior. They are careful to research an entire company’s “bucket list” to ensure that they design a trip that comes to life in the employee’s imagination. This concrete “dream” can be re-imagined every day by employees as they work toward a progressive goal that will be their ticket to ride. Planners are careful to include a “wow” factor, like dinner atop the Eiffel Tower or a helicopter ride along the Great Wall of China, to keep the “dream” alive during the long winter’s toil. Luxury, adventure, and novelty are all dream-catchers that money alone can never activate.

THE BOTTOM LINE

People do work for money, and most of us enjoy spending it. In an affluent country, however, we do not consider money a reward. We consider it just compensation; our due. We easily become addicted to bonuses. In his research findings published in 2003, Anton Suvorov says, “A contingent reward makes an agent expect it (again) whenever a similar task is faced…Before long the existing reward may not suffice. It will quickly feel less like a bonus and more like the status quo, which then forces the owner to offer larger rewards to achieve the same effect.”

A SAFARI

Two weeks with colleagues on a photo safari across the vast expanse of Africa will never become the “status quo”.

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