Cafe Classic: For Motivation, Can It Really Be Better to Take Away Than to Give?

Editor's Note:  Evidence abounds on the power of negative incentives.  Yes, they work - but is that really the best way to get the most from your people?  

Finding that motivational sweet spot, explains Kelly Goldsmith, Assistant Professor at Northwestern University's Kellogg School of Management, requires providing people with effective incentives.  So far so good.  What is the best way to do this?  Precisely the opposite of what most firms - and most managers - are doing, she claims.

Goldsmith received a lot of attention for her research and her claim, highlighted here in Kellogg Insights online magazine, that negatively framed incentives (where you might have money from an allotted amount taken away for not meeting a goal rather than receiving money for goal attainment) are more effective in driving performance than positive ones.  The reason?  The prospect of losing something is far more motivating than the prospect of gaining something.

Goldsmith isn't the first to pick up on the power of negative incentives.  I've seen and heard the topic come up in a number of forums over the years (I'll bet you have, too) and have encountered more than a few negatively-designed plans along the way. 

I am not a fan.  Negative incentives may have their place, but I haven't yet found it.

One of the biggest problems I have with proponents of this approach is their apparent assumption that all motivation is the same.  That the motivation which is produced by the fear of loss is no different in any respect than the motivation which stems from anticipation of a gain.  That one behaving under the influence of one acts no differently than someone responding to the other.  The sheer fact that we have evidence of their disparate impact on behavior and effort tells us they are different.  Might we not want to understand and appreciate the full potential meaning of that difference before we sign on to the fan base?

One of my favorite quotes about incentives comes from Chip and Dan Heath (authors of Switch and Made to Stick), who say:

Incentives are like a jet engine. There's no question the engine will take you somewhere, fast, but it's not always clear where. Or what you're going to mow down on the way.

Well, if positive incentives are like a jet engine, then negative incentives are like a jet engine on steroids.  Better really know where you've got that thing pointed and what may lie in its path.  As the Heath brothers make clear, incentives don't operate in isolation.  They operate on people who work among other people in a complex organizational system.  What kind of collateral damage might occur as a result of negatively framed incentives?  What consequences might they have on relationships, on collaboration, on trust levels and on the organization's culture overall?

What's your take, dear readers?  Am I all wet here?  Have you encountered or used negatively framed incentives yourself - and do you have a different perspective to share?  Would love to hear what others think.

Ann Bares is the Founder and Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting and survey administration services to a wide range of client organizations.  She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time. Follow her on Twitter at @annbares.

Creative Commons image "Question of Money" by Ano Lobb

Comments

[E. James (jim) Brennan]

In this circumstance (https://www.compensationcafe.com/2014/09/holding-back-an-increase.html), the suspension of economic incentives was the key to producing an extremely positive behavioral change.

Supplying a negative consequence was the only thing that got through to the employee after every positive incentive had failed.

[Ann Bares]

Thanks Jim - good (recently published) example!

Sheesh - my memory isn't what it used to be!

[E. James (Jim) Brennan]

Your caveats remain valid, however, Ann.

People all have different motivations. What hits the "sweet spot" for one may leave another completely cold.

Some workers block out all negatives and only fixate on positives. Others coast on intrinsic satisfaction, ignoring all carrots and sticks. The majority enjoy positives and will flinch from negatives.

These are simply various reinforcement tools. Occasionally you need one tool more than another for the issue at hand.