Whether they know it or not, most executives are Skinnerians. It was Harvard psychologist B. F. Skinner who popularized the theory of positive reinforcement, which holds that presenting a reward after a desired behavior will make that behavior more likely to occur in the future. To our pets we say, "Good dog!" and offer a biscuit. To our employees we say, "Good job!" and offer a performance bonus.

It seems to make sense. But research has been accumulating that shows tangible rewards as well as praise can actually lower the level of performance, particularly in jobs requiring creativity. Study after study has shown that intrinsic interest in a task -- the sense that something is worth doing for its own sake -- typically declines when someone is given an external reason for doing it.

Author and sociologist Philip Slater put it starkly in his book Wealth Addiction: "Getting people to chase money . . . produces nothing except people chasing money. Using money as a motivator leads to a progressive degradation in the quality of everything produced."

The problem is not with money per se, which most of us find desirable. Rather, it is the fact that waving dollar bills in front of people leads them to think of themselves as doing work only for the reward. Performance tends to suffer as a result.

In one study, Teresa M. Amabile, associate professor of psychology at Brandeis University, asked 72 creative writers to write some poetry. She gave one group of subjects a list of extrinsic reasons for writing, such as impressing teachers and making money, and asked them to think about their own writing with respect to those reasons. She showed others a list of intrinsic reasons: the enjoyment of playing with words, for example, and satisfaction from self-expression. A third group was not given any list. All were then asked to do more writing.

The results were clear. Those given the extrinsic reasons not only wrote less creatively than the others, as judged by 12 independent poets, but the quality of their work dropped significantly after this brief exposure to the extrinsic reasons.

This effect, according to other studies, is by no means limited to poets. When young tutors were promised free movie tickets for teaching well, they took longer to communicate ideas, got frustrated more easily, and did a poorer job in the end than those who got nothing. In another study, a group of subjects who contracted in advance for a reward made less creative collages and told less inventive stories. Students who were offered a reward for participating in still another experiment not only did more poorly at a creative task, but also failed to memorize as well as the subjects who received no reward.

What's going on here? The experts offer three explanations for such findings, and all of them have important implications for managers.

First, rewards encourage people to focus narrowly on a task, to do it as quickly as possible, and to take few risks. "If they feel, 'This is something I have to get through to get the prize,' they're going to be less creative," says Amabile. The more emphasis placed on the reward, the more inclined someone will be to do the minimum necessary to get it. And that means lower-quality work.

The very fact of turning a task into a means for attaining something else changes the way that task is perceived, as a clever series of experiments by Mark R. Lepper, a professor of psychology at Stanford University, demonstrated. He told a group of children that they could not engage in one activity they liked until they took part in another. Although they had enjoyed both activities equally, the children came to dislike the task that was a prerequisite for the other.

Second, extrinsic rewards can erode intrinsic interest. People who come to see themselves as working for money or approval find their tasks less pleasurable and therefore do not do them as well. "Money may work to 'buy off' one's intrinsic motivation for an activity," says Edward L. Deci, a professor of psychology at the University of Rochester and a leading authority on the subject.

What's true of money is also true of competition, which, contrary to myth, is nearly always counterproductive (see "No Contest," Managing People, November 1987). Deci put 80 subjects to work on a spatial-relations puzzle, and he asked some to solve it more quickly than those sitting next to them. Then each of the subjects sat alone -- but secretly observed -- in a room that contained a similar puzzle. It turned out that those who had been competing spent less time working on the task voluntarily -- and later told Deci they found it less interesting -- compared with those who didn't have to compete. The external prod of winning a contest, like that of a bonus, makes a task seem less enjoyable in its own right. Not surprisingly, what's seen as less enjoyable is usually done less well.

But there is a third reason that the use of external motivators can backfire. People come to see themselves as being controlled by a reward. They feel less autonomous, and this often interferes with performance.

There's no shortage of data showing that a feeling of freedom translates into happier and more productive employees. In 1983-84, Amabile and Stan Gryskiewicz, of the Center for Creative Leadership, in Greensboro, N.C., interviewed 120 research-and-development scientists, asking each to describe one event from their work experience that exemplified high creativity and one that reflected low creativity. The factor they mentioned most often, by far, was freedom or its absence. Receiving a clear overall direction on a project is useful, the scientists said, but they worked best when they could decide for themselves how to accomplish those goals.

Rewards are often offered in a controlling way, and to that extent, says Deci's colleague Richard Ryan, they stifle productivity. He emphasizes the enormous difference between saying, "I'm giving you this reward because I recognize the value of your work," and "You're getting this reward because you've lived up to my standards." Likewise for verbal feedback: the question isn't whether you give enough of it, or even how positive it is. What matters is how controlling the person perceives it to be.

This point was made in a study conducted by Deci, Ryan, and James Connell. From questionnaires completed by several hundred workers in a corporation that manufactured business machines, they found that those who worked for controlling managers were less satisfied with their jobs and more concerned with pay and benefits. The attitude seemed to be, "If you're going to control me, I'm going to be alienated, and what I'm going to focus on is money." In a related laboratory study, Ryan found that when subjects were praised, told in effect, "Good, you're doing as you should," instead of simply letting them know how well they had done, motivation was low.

Does all this mean that employees should be paid less or ignored when they do good work? Definitely not. Is it an argument for scrapping incentive plans? Probably not. What the research indicates is that all incentive systems -- along with verbal feedback -- should be guided by two clear principles. Higher-quality work, particularly on jobs requiring creative thinking, is more likely to occur when a person focuses on the challenge of the task itself, rather than on some external motivator, and feels a sense of self-determination, as opposed to feeling controlled by means of praise or reward.

Practically speaking, this means that incentives announced in advance are more likely to undermine performance than are unexpected bonuses that recognize an outstanding job after the fact. Particularly deadly are incentive programs run as contests in which some teams (or individuals) will not receive bonuses no matter how well they perform. Managers need to consider the impact of any incentive payment on the workers who don't receive it -- another hidden cost of rewards.

Provided these conditions are met -- and everyone feels the system for awarding bonuses is fair -- incentives may not be harmful. But a supportive workplace, one in which workers are allowed autonomy and are not only informed about company goals but help determine them, may not even need incentive systems.

The larger point is that innovation cannot be forced but only allowed to happen. You can help create the conditions that allow it by playing down the significance of rewards and playing up what employees find appealing about the task itself. Effective supervisors take care of their subordinates' financial needs but don't make a big deal about money and its relationship to performance. Instead, they concentrate on the most powerful motivator that exists: the intrinsic interest people have in solving problems. People are most interested when their curiosity is aroused -- when discrepancies exist between what they thought was true and what they've just encountered -- and when they are challenged by a task that's neither so difficult as to be overwhelming nor so simple as to be boring.

What's more, employees should be matched with the kind of work that they find interesting. "In hiring we almost never look at intrinsic motivation," Amabile observes of most organizations. Yet having someone work on the sort of problem to which he or she is naturally attracted is likely to produce better results than using some artificial means to boost performance.

Of course, some tasks are universally regarded as dull. In these cases, the idea is to get people to internalize the importance of doing them -- to transform external reasons into internal incentive. Deci and his colleagues have recently turned their attention to this problem. Their findings suggest that a manager should acknowledge that the task is boring, explain why it needs to be done, and try to maximize a feeling of autonomy.

In another experiment, Deci and graduate student Haleh Eghrari had 90 subjects press a computer-keyboard space bar every time a dot of light appeared on the screen, a task most found uninteresting. The researchers admitted to one group that the activity wasn't much fun, but they explained that it could be useful for learning about concentration. These individuals were praised for their performance afterward. A second group was told that they "should attend to [the task] very carefully . . . since it will be for your own good." Later they were informed that they had done well "as [they] should." The third group was given only instructions without explanation.

As with the competition study, each subject was then left alone in a room and given the option of continuing to play with the computer once the experiment was over. Those in the first group chose to do this more often and also did a better job at the task. "People need to experience a sense of initiation," Deci explains, "so the less you're controlling and demanding, the more they have a chance to feel that initiation themselves."

Self-determination, then, proves decisive with boring tasks as well as with interesting ones. And it isn't only an autocratic environment that wipes out feelings of autonomy. Even well-meaning managers can be controlling in the way they praise or reward. Likewise, financial incentives can come to seem so important that they reduce the attraction of the task itself. Lest managers squelch the very innovation they hope to create, rewards should be used with caution.



Discretionary 58%

Achievement of sales goals 24%

Achievement of profit goals 30%

Percentage of sales 8%

Percentage of profits 28%

Return on equity/assets/sales 8%

* Total exceeds 100% because of multiple responses.

Source: 1987 INC. Executive Compensation Survey


* Amabile, Teresa M. "Motivation and Creativity: Effects of Motivational Orientation on Creative Writers." Journal of Personality and Social Psychology, vol. 48, 1985, pp. 393-399.

* Deci, Edward L. et al. "When Trying to Win: Competition and Intrinsic Motivation." Personality and Social Psychology Bulletin, vol. 7, 1981, pp. 79-83.

* Lepper, Mark. R. and David Greene, eds. The Hidden Costs of Reward. Hillsdale, N.J.: Lawrence Erlbaum Associates, 1978.