035 - Incentives Serve the Powerful, Undermine Autonomy, and Gut Creativity

Alfie Kohn is a prolific author and expert on the psychological and organizational effects of rewards, incentives and competition. As a longtime fan of his thinking and writing, it was a huge treat (no pun intended) for me to talk with him about the counterproductive impact of incentive systems in the workplace. In 2018, the 25th Anniversary Edition of Kohn’s superb book, Punished by Rewards—The Trouble with Gold Stars, Incentive Plans, A’s, Praise, and Other Bribes was released. In the years since the original publication, other experts piled on scholarly articles and best-selling books confirming the deleterious effects of financial rewards—especially when critical thinking, creativity, and collaboration are needed. But alas, organizational leaders continue to fuel the swarms of compensation consultants who promise to tweak the organization’s existing incentive system into an even better incentive-based compensation scheme. You know, into one that actually works…<br /><br />We discuss intrinsic motivation, which is when motivation arises from within and there is inherent satisfaction in performing a task. And Mr. Kohn contrasts that with extrinsic motivation, when behavior is performed because of outside causes such as rewards or to avoid punishment. Rewards, like punishment, increase compliance and diminish intrinsic motivation which creates reliance on extrinsic motivation in order to perform. <br /><br />Alfie Kohn points to the fact that attaching an incentive signals the undesirability of a task and thus devalues it. Incentives or rewards are also control mechanisms, and people inherently do not like being controlled by others or manipulated into performing tasks.<br />And how does a BSM (business school mindset) contribute to the prevalence of incentive compensation systems? By definition, the BSM relies on control, measurement and comparison. Alfie Kohn describes a parallel in the education sector with increased reliance on the sterile formulations of economists to apply measurement and mathematical mod