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The Science of Rewards
People use rewards expecting to gain the benefit of increasing another person’s motivation and behavior, but in the process of doing it, they often incur the unintentional and hidden cost of undermining that person’s intrinsic motivation toward the activity.
Incentives designed to clarify thinking and sharpen creativity end up clouding our thinking and dulling creativity.
Because rewards, by their very nature, narrow our focus. They’re helpful when there’s a clear path to a solution. They help us stare ahead and race faster. But “if-then” motivators are terrible for certain challenges. The rewards, in such cases, can narrow down people’s focus and blinker the wide view that can allow them to see new uses for old objects.
Extrinsic rewards
Researchers have found that extrinsic rewards can be effective for algorithmic tasks; that depend on following an existing formula to its logical conclusion. But for more right-brain undertakings; that demand flexible problem-solving, inventiveness, or conceptual understanding; contingent rewards can be dangerous.
When children don’t expect a reward, receiving one can have little impact on their intrinsic motivation. Only contingent rewards; if you do this, then you’ll get that; usually have the negative effect. The underlying reason is that It requires people to forfeit their autonomy
Research shows that the secret to high performance isn’t our biological drive or our reward-and-punishment drive, but our third drive; our deep-seated desire to direct our own lives, to extend and expand our abilities, and to live a life of purpose.
Addiction
Rewards are addictive in that once offered we expect them again and again whenever a similar task is completed. Before long, the existing reward may no longer suffice. The bonus quickly begins to feel like the status-quo.
The addictive nature of rewards can also distort decision-making.
The reward stimuli found at casinos may lead to an increase in the likelihood of individuals switching from risk-averse to risk-seeking behavior.
Short-Term Thinking
Extrinsic motivators can reduce the depth of our thinking. They can focus our sights on only what’s immediately before us rather than what’s off in the distance.
Several researchers have found that companies that spend the most time offering guidance on quarterly earnings deliver significantly lower long-term growth rates than companies that offer guidance less frequently.
The very presence of goals may lead employees to focus myopically on short-term gains and to lose sight of the potential devastating long-term effects on the organization.
In environments where extrinsic rewards are most salient, many people work only to the point that triggers the reward; and no further.