THE THING ABOUT INCENTIVES: And 7 Reasons Not To Use Them

The Roots of “The Stuckness” - Scientists placed 5 monkeys in a cage and in the middle, a ladder with bananas on top. Every time a monkey went up the ladder, the scientists soaked all of the monkeys with ice water from a fire hose. This continued until no monkey was willing to go up the ladder regardless of the temptation.

Then the scientists substituted one of the monkeys with one that had never been in the cage. The first thing the new monkey did was to go up the ladder to get the banana. Immediately the other monkeys thrashed the newcomer. After several beatings, the new member learned not to climb the ladder even though it never knew why.

A second monkey was then substituted and the same thing occurred. This time, the first replacement monkey participated in the beating of the new monkey. Eventually all the monkeys were replaced; each time the other monkeys participated in beating the new monkey who tried to climb the ladder and get the banana.

Eventually, what was left was a group of 5 monkeys that had never received a cold shower, yet continued to thrash any monkey that attempted to climb the ladder. If it was possible to ask the monkeys why they beat up anyone who attempted to go up the ladder, we bet you the answer would be…   “I don’t know – that’s just how things are done around here.” 

At The Workplace -  There is perhaps no better example of this kind of “stuckness” to doing the same things over and over without really understanding why than the continued reliance on Skinnerian behavior modification to try to get employees to change. As with almost every other area of our culture, the use of extrinsic motivation at the workplace is alive and well. Regular perusal of webinars, podcasts and LinkedIn posts will turn up a myriad of discussions on techniques to improve results from the use of incentives for business and health-related change; what kind, how much, how often, carrots or sticks, etc.

Some say money works better than trinkets. Others say you have to use larger amounts to get the changes you want. Others argue it is all about the timing of the rewards in relation to the behavior.  Others insist that it works better when you take away something away rather than when you give it. Others say group competitions work better. Others say you should only use extrinsic motivation for participation and not behavior change. And still others propose that the incentives only work if the people competing for them get to choose what they are.

The Crux of The Matter - But here is the thing about incentives. The real problem with incentives has little to do with the type or the amount or the frequency or any of the other variables mentioned above, and everything to do with one critical factor. That factor is contingency.

Simply stated, “a” is said to be contingent on “b” if it occurs or exists only if “b” happens.  Synonyms for contingent include: dependent on, conditional on, determined by and hinging on. In pop psychology terms this is often referred to as “do this and you’ll get that.”

In incentivized employee health approaches people are promised a reward (positive reinforcement) if they participate in a program (screening, HRA, weight loss, smoking cessation, etc.) or achieve some predetermined behavioral or health outcome. And/or they are punished (insurance premium increase for example) if they don’t participate or don’t reach an agreed upon goal.

Why this Approach is A Really, Really Bad Idea - The research over the past 40 years – scores if not hundreds of studies conclusively demonstrate that contingent rewards and punishments do not lead to sustained behavior change for behaviors that involve even a modicum of creativity and thinking. The consistency of this finding is quite remarkable. With children and adults, governments and businesses, workers and learners, it is nearly impossible to find a study that suggests otherwise.

It might seem like this would be enough to convince vendors and businesses to stop subjecting employees to these approaches. Unfortunately, although these approaches do not benefit participants, there is a lot of money to be made by promoting them. Companies are allotting incentives of $600 or more per employee in order to run these programs, and the wellness provisions of the Affordable Care Act permit 30-50% increases in insurance premiums as punishment for noncompliance – an amount that can be not so affordable for many participants. Perhaps senior scientist for Rand Health Advisory Services Soeren Mattke expressed the reality most clearly:

“In my mind, exposing the most vulnerable employees to that level of pressure would be sound policy if, and only if, workplace wellness programs were powerful enough to reverse years of deeply ingrained behaviors. Yet our data show that they are not even attracting more than a quarter of employees and have a modest impact on those who participate. That is why I believe it is time to start rethinking workplace wellness, and come up with models that are both fairer and more effective.”

But, Not Only Doesn’t it Work – To make matters worse, it is not only that these approaches fail to result in sustained change for the vast majority of people who participate in them. In addition, the research from the past 4 decades is also resoundingly clear that the use of extrinsic motivation engenders a variety of significant negative consequences. The term for this is iatrogenesis defined as:

“Any effect on a person, resulting from any activity of one or more persons acting as healthcare professionals or promoting products or services as beneficial to health, that does not support a goal of the person affected.”

It is important to be clear that the rewards themselves are not the problem; it is the contingency. For example, if someone at work does a great job on a project and her manager decides to reward her with a free dinner at an expensive restaurant as an unannounced thank you, this does not set in motion the same iatrogenic consequences as if the reward had been promised beforehand contingent on some predetermined goal achievement. Of course if employees start expecting rewards every time they accomplish something that may create some issues, but nothing like what happens when they are embroiled in “do this and you’ll get that.”

Unfortunately, people promoting the use of extrinsic motivation rarely acknowledge the decades of research that clearly demonstrate the iatrogenesis that is engendered by its use. In a recent, widely publicized, hour-long webinar on the use of incentives, there was barely a mention of this literature. For a profession whose prime directive is not “get” people to change or “get” people healthy but rather “first do no harm,” this is simply unacceptable.

Top 7 Reasons Not To Use Them - With that in mind we propose the top 7 reasons (# 1 being they don’t promote sustained change) to avoid using contingent rewards and punishments to try to “get” employees to change. Four decades of research have consistently and conclusively demonstrated that these approaches

1. Are Habit Forming - This is why incentives for wellness programs at the workplace have increased from an average of $260 per employee to almost $700 per employee in just the past five or six years!
2. Diminish performance – From students to artists to workers, performance suffers when pressure and coercion are involved.
3. Diminish creativity – Many studies show that extrinsic motivators often end up diminishing rather than increasing creativity.
4. Foster short-term thinking – Extrinsic motivators tend to promote taking the shortest path to the desired outcome regardless of whether it is the best or safest route.
5. Encourage cheating and lying – Why tell the truth on personal questions on a survey or Health Risk Assessment, or when reporting data from your fitness tracker, when lying and cheating will get you the reward just the same? And you won’t have to reveal anything you don’t want to (or shouldn’t have to).
6. Reduce or extinguish intrinsic motivation – Extrinsic motivation ends up diminishing intrinsic motivation – exactly the opposite of what you want for your employees. In fact, even when intrinsic and extrinsic motivations exist at the same time for the same person, the extrinsic motivation can crowd out the benefits of being intrinsically motivated.
7. Do not promote sustained behavior change.

What to Do Instead? – While change can certainly be difficult, internationally renowned management expert Peter Senge directs our attention to the real crux of the matter when he says:

“People don’t resist change. They resist being changed.” 

Given this reality and the fact that budgets for workplace wellbeing are almost always tight, it just makes sense to carefully examine the pros and cons of using extrinsic motivation at the workplace. Here are 5 suggestions to help with the process of doing that:

• Familiarize yourself with the research on workplace incentives – Be sure to read more than just vendor studies, and take those with at least a grain of salt.
• If discussions about incentives at the workplace do not include considerable focus on the likelihood of iatrogenesis – consider walking away.
• If someone recommending incentives cannot come up with at least a few of the 7 potential negative consequences referenced above – definitely walk away.
• If wellbeing at your workplace is heavily incentivized consider carefully weaning employees off them.
• Learn how to foster intrinsic motivation

Fostering intrinsic motivation is the best and perhaps the only real way to achieve sustained change at the workplace, for both business and health-related behaviors. And although the process is a bit more complex than just piling on rewards and punishments, we actually do know how to do this. To a large extent, it comes down to promoting autonomy, mastery and purpose for employees. To learn how to transform your workplace culture to promote intrinsic motivation consider exploring our Online Training Certificate Program. Till then we leave you with this quotation from our book, recently recommended by Employee Benefit News as a must read for 2016.

“People are motivated by work that provides them with autonomy, growth, meaning, and purpose. People can’t be paid or punished into these behaviors; they contribute or withhold their best efforts depending on how connected they feel to the organization, manager, or team.”