In this article, you’ll learn about the psychology behind rewards and motivation. Specifically, we’ll discuss why extrinsic rewards are ineffective in motivating performance in the long-term. <\/p>\n\n\n\n\n\n\n\n
Rewards Decrease Intrinsic Motivation<\/strong><\/h2>\n\n\n\nGiven a task without promise of pay, you might think it\u2019s kind of interesting and worth doing just for its own enjoyment. Get paid to do it, and suddenly it\u2019s not as fun any longer.<\/p>\n\n\n\n
We\u2019ve already seen research studies supporting this idea in the Introduction. <\/p>\n\n\n\n
Remember Tom Sawyer\u2019s fence painting experience, when he\u2019s punished with whitewashing a fence. When another boy walks by, Tom pretends to be loving his time. Painting the fence isn\u2019t a punishment \u2013 it\u2019s a privilege<\/em>, something to be mastered only by artisans. The boy begs to help, but Tom refuses, further stoking the boy\u2019s interest. Tom finally relents when the boy gives him an apple, and soon the neighborhood boys are all whitewashing.<\/p>\n\n\n\nMark Twain wrote, \u201cWork consists of whatever a body is <\/strong>obliged<\/em><\/strong> to do, and Play consists of whatever a body is not obliged to do.\u201d<\/strong><\/p>\n\n\n\nThis idea is counterintuitive – if you enjoy something when you do it for free, then wouldn\u2019t adding money only make it better?<\/p>\n\n\n\n
Rewards require people to forfeit some autonomy<\/strong> \u2013 if a person is doing something by herself, she\u2019s fully in control of her behavior. But once she starts doing it for money, someone else is pulling her lever, and she no longer feels fully in control of their lives.<\/p>\n\n\n\nExtrinsic rewards also quash the cognitive dissonance that comes with unrewarded work. Cognitive dissonance works like this – when volunteering, a person subconsciously reasons, \u201cwell I\u2019m not getting paid for this work, so if I\u2019m working hard, I must enjoy it.\u201d Once a person starts getting paid, she instead reasons, \u201cwell, I don\u2019t really enjoy the work, but it\u2019s fine since I\u2019m getting paid.\u201d<\/p>\n\n\n\n
Rewards Decrease High Performance<\/strong><\/h2>\n\n\n\nResearchers have found that financial incentives can decrease overall performance.<\/p>\n\n\n\n
In one experiment, economists paid workers in rural India to play several games requiring motor skills (like throwing tennis balls at a target), creativity (unscrambling anagrams), or concentration (recalling a large number). Workers were given different levels of rewards \u2013 4 rupees (one day\u2019s pay), 40 rupees, or 400 rupees (5 months\u2019 pay).<\/p>\n\n\n\n
Surprisingly, the 40-rupee group performed no better than the 4-rupee group, and the 400-rupee group actually performed worse<\/strong>. <\/p>\n\n\n\nRewards Decrease Creativity<\/strong><\/h2>\n\n\n\nIn many jobs, creativity is important<\/a> to find unobvious solutions to difficult problems. Research suggests that rewards decrease creativity, possibly because rewards narrow our focus \u2013 they speed us up when there\u2019s a clear path<\/strong> (like doing a routine job on an assembly line), but they blind our peripheral vision<\/strong>.<\/p>\n\n\n\nIn one experiment, participants were given a puzzle requiring creativity to solve. Here it is. You\u2019re seated at a table and given a candle, tacks, and a book of matches.<\/p>\n\n\n\n![\"\"\/](\"https:\/\/lh3.googleusercontent.com\/JqCgFPQsgHY_TS7eym4jQ1ekVzsL6deeSmckSfT8I6tQMAUaavRYygElFRFLgyaFafA6dcmRktUa5xXWqCq5v78r8LJdfkYvaWtbvzmbP82XLDZKhIRiZwNEi3OuZGXHZj5QqW3N=s0\")
<\/figure>\n\n\n\nYour goal is to fix the candle to the wall so that wax doesn\u2019t drip on the table. (You can give it a try before reading on).<\/p>\n\n\n\n
One experimental group was promised a reward if their times were in the top 25% of research subjects. The other group received no reward.<\/p>\n\n\n\n
Surprisingly, the reward group took 3.5 minutes longer to solve the puzzle<\/strong>. Getting paid more seemed to cloud their creativity.<\/p>\n\n\n\nHere\u2019s the suggested solution:<\/p>\n\n\n\n![\"\"\/](\"https:\/\/lh6.googleusercontent.com\/SVmtab78o0R1fzxQa5Dn94bf9KF-rLwkPPMojFEXrKUMtWWybjkzKwJN-rNLmsd6NsCLe5W38eBqugOpst15TsEAW6xVdWD0blxd_BfEbE02fiGXyQ4vf5FMFAQ9Vq0nyDGa77Et=s0\")
<\/figure>\n\n\n\nMore examples:<\/p>\n\n\n\n
- Paintings that were commissioned were rated as less creative than non-commissioned works, despite being rated equally in technical quality.<\/li>
- Artists who were surveyed as less extrinsically motivated<\/a> achieved greater success in professional art, possibly because they had more internal drive to push through tough times where rewards didn\u2019t come easily.<\/li>
- Different funding styles lead to different rewards. The NIH evaluates projects independently, uses regimented controls like pre-defined deliverables and renewal policies. HHMI, on the other hand, awards investigators guaranteed support for 5 years, encouraging early failure and long-term success. HHMI investigators produce many more high-impact papers<\/a> than their similarly-accomplished NIH counterparts.
- (Shortform note: this may suffer from the confound that HHMI is far more selective in its funding than the NIH (selecting only 20-30 researchers per year), and this may not be properly controlled for in the study.)<\/li><\/ul><\/li><\/ul>\n\n\n\n
Rewards Decrease Good Behavior<\/strong><\/h2>\n\n\n\nPeople naturally want to do good things. Counter-intuitively, paying them for good behavior reduces their morality.<\/p>\n\n\n\n
A study of Swedish blood donors found that paying people about $7 for each donation <\/strong>reduced<\/em><\/strong> the percentage of women who were willing to give blood to 30%, down from 52% in the control unpaid group. (Men were unaffected by pay.)<\/p>\n\n\n\n- Interestingly, a third group was given the option of donating the $7 to charity. Here the donation rate remained unchanged, at 53%. <\/li>
- A related study found that giving blood donors a day off work increased donations.<\/li><\/ul>\n\n\n\n
What explains these effects? Donating blood is an inherently altruistic task, giving a \u201cfeeling that money can\u2019t buy.\u201d Removing barriers to altruism, like giving a day off, increased its success rate. But directly paying for it reduces internal motivation<\/a>. <\/p>\n\n\n\nRewards Increase Bad Behavior<\/strong><\/h2>\n\n\n\nRewards can promote cheating. Rewards narrow focus<\/a> to whatever it takes to get the reward, at the expense of the bigger picture<\/strong>.<\/p>\n\n\n\nExamples:<\/p>\n\n\n\n
- Corporate scandals seem to be driven by short-term rewards \u2013 Enron cooked its books to meet short term revenue goals. (Shortform example: Wells Fargo imposed sales quotas and bonuses for opening accounts, and frontline workers were caught without customer permission)<\/li>
- A classic study showed that when child care centers charged parents for picking up their child late, the delinquency rate increased<\/strong>. One explanation is that previously, parents were driven to treat the caretakers fairly, partly in return for caring for their precious children. But a fine reduced the relationship to a transactional level<\/strong>, where parents could now make a rational decision that the fine was worth their time in being late.<\/li><\/ul>\n\n\n\n
In contrast, intrinsic motivation<\/a> views the task as a reward in itself. When the goal is to do one\u2019s best and grow, it\u2019s impossible to act unethically or chat, because the person you\u2019ve disadvantaged is only yourself.<\/p>\n\n\n\nRewards Create Addiction<\/strong><\/h2>\n\n\n\nJust like a drug, short-term rewards can induce a large effect initially, but two perversions happen over time: 1) people habituate to the reward and need more of it to induce behavior<\/strong>, and 2) when the reward is withdrawn, the intended behavior shuts off<\/strong>.<\/p>\n\n\n\nFrom a physiological standpoint, this is unsurprising, since task rewards trigger the same dopaminergic system that respond to drugs.<\/p>\n\n\n\n
Like Tom Sawyer realized, giving a reward for doing something inherently signals that it\u2019s an unpleasant task (people need to get paid to do this). And once you\u2019ve given a reward to someone for doing something, there\u2019s no going back \u2013 the person won\u2019t agree to do the task unpaid from that point on.<\/p>\n\n\n\n
Studies also show that activation in the brain\u2019s nucleus accumbens, part of the dopaminergic system, increases risky choices<\/a> and risk-seeking mistakes. This may partly explain why casinos give their participants rewards (free drinks, surprise gifts) to further spur risk-seeking in gambling.<\/p>\n\n\n\nRewards Encourage Short-Term Thinking<\/strong><\/h2>\n\n\n\nExtrinsic rewards can narrow the focus<\/a> of our decision making<\/a> to short-term effects, ignoring long-term benefits.<\/p>\n\n\n\n
Mark Twain wrote, \u201cWork consists of whatever a body is <\/strong>obliged<\/em><\/strong> to do, and Play consists of whatever a body is not obliged to do.\u201d<\/strong><\/p>\n\n\n\n This idea is counterintuitive – if you enjoy something when you do it for free, then wouldn\u2019t adding money only make it better?<\/p>\n\n\n\n Rewards require people to forfeit some autonomy<\/strong> \u2013 if a person is doing something by herself, she\u2019s fully in control of her behavior. But once she starts doing it for money, someone else is pulling her lever, and she no longer feels fully in control of their lives.<\/p>\n\n\n\n Extrinsic rewards also quash the cognitive dissonance that comes with unrewarded work. Cognitive dissonance works like this – when volunteering, a person subconsciously reasons, \u201cwell I\u2019m not getting paid for this work, so if I\u2019m working hard, I must enjoy it.\u201d Once a person starts getting paid, she instead reasons, \u201cwell, I don\u2019t really enjoy the work, but it\u2019s fine since I\u2019m getting paid.\u201d<\/p>\n\n\n\n Researchers have found that financial incentives can decrease overall performance.<\/p>\n\n\n\n In one experiment, economists paid workers in rural India to play several games requiring motor skills (like throwing tennis balls at a target), creativity (unscrambling anagrams), or concentration (recalling a large number). Workers were given different levels of rewards \u2013 4 rupees (one day\u2019s pay), 40 rupees, or 400 rupees (5 months\u2019 pay).<\/p>\n\n\n\n Surprisingly, the 40-rupee group performed no better than the 4-rupee group, and the 400-rupee group actually performed worse<\/strong>. <\/p>\n\n\n\n In many jobs, creativity is important<\/a> to find unobvious solutions to difficult problems. Research suggests that rewards decrease creativity, possibly because rewards narrow our focus \u2013 they speed us up when there\u2019s a clear path<\/strong> (like doing a routine job on an assembly line), but they blind our peripheral vision<\/strong>.<\/p>\n\n\n\n In one experiment, participants were given a puzzle requiring creativity to solve. Here it is. You\u2019re seated at a table and given a candle, tacks, and a book of matches.<\/p>\n\n\n\n Your goal is to fix the candle to the wall so that wax doesn\u2019t drip on the table. (You can give it a try before reading on).<\/p>\n\n\n\n One experimental group was promised a reward if their times were in the top 25% of research subjects. The other group received no reward.<\/p>\n\n\n\n Surprisingly, the reward group took 3.5 minutes longer to solve the puzzle<\/strong>. Getting paid more seemed to cloud their creativity.<\/p>\n\n\n\n Here\u2019s the suggested solution:<\/p>\n\n\n\n More examples:<\/p>\n\n\n\n People naturally want to do good things. Counter-intuitively, paying them for good behavior reduces their morality.<\/p>\n\n\n\n A study of Swedish blood donors found that paying people about $7 for each donation <\/strong>reduced<\/em><\/strong> the percentage of women who were willing to give blood to 30%, down from 52% in the control unpaid group. (Men were unaffected by pay.)<\/p>\n\n\n\n What explains these effects? Donating blood is an inherently altruistic task, giving a \u201cfeeling that money can\u2019t buy.\u201d Removing barriers to altruism, like giving a day off, increased its success rate. But directly paying for it reduces internal motivation<\/a>. <\/p>\n\n\n\n Rewards can promote cheating. Rewards narrow focus<\/a> to whatever it takes to get the reward, at the expense of the bigger picture<\/strong>.<\/p>\n\n\n\n Examples:<\/p>\n\n\n\n In contrast, intrinsic motivation<\/a> views the task as a reward in itself. When the goal is to do one\u2019s best and grow, it\u2019s impossible to act unethically or chat, because the person you\u2019ve disadvantaged is only yourself.<\/p>\n\n\n\n Just like a drug, short-term rewards can induce a large effect initially, but two perversions happen over time: 1) people habituate to the reward and need more of it to induce behavior<\/strong>, and 2) when the reward is withdrawn, the intended behavior shuts off<\/strong>.<\/p>\n\n\n\n From a physiological standpoint, this is unsurprising, since task rewards trigger the same dopaminergic system that respond to drugs.<\/p>\n\n\n\n Like Tom Sawyer realized, giving a reward for doing something inherently signals that it\u2019s an unpleasant task (people need to get paid to do this). And once you\u2019ve given a reward to someone for doing something, there\u2019s no going back \u2013 the person won\u2019t agree to do the task unpaid from that point on.<\/p>\n\n\n\n Studies also show that activation in the brain\u2019s nucleus accumbens, part of the dopaminergic system, increases risky choices<\/a> and risk-seeking mistakes. This may partly explain why casinos give their participants rewards (free drinks, surprise gifts) to further spur risk-seeking in gambling.<\/p>\n\n\n\n Extrinsic rewards can narrow the focus<\/a> of our decision making<\/a> to short-term effects, ignoring long-term benefits.<\/p>\n\n\n\nRewards Decrease High Performance<\/strong><\/h2>\n\n\n\n
Rewards Decrease Creativity<\/strong><\/h2>\n\n\n\n
Rewards Decrease Good Behavior<\/strong><\/h2>\n\n\n\n
Rewards Increase Bad Behavior<\/strong><\/h2>\n\n\n\n
Rewards Create Addiction<\/strong><\/h2>\n\n\n\n
Rewards Encourage Short-Term Thinking<\/strong><\/h2>\n\n\n\n