Just Say “No” To Rewards and Punishment

In leadership training workshops, management “gurus” often advise leaders to develop a system of rewards and punishments to encourage “good” behaviors and discourage “bad” behaviors. While few would argue that you would not increase the frequency of desired behaviors in this way, there are limitations to what can be achieved and a number or risks that are often overlooked.

A careful reading of B.F. Skinner’s foundational work on operant conditioning reveals some of these limitations. If a leader chooses to rely heavily on rewards and punishments to meet his or her objectives, the leader must: determine what is “good” and “bad,” know exactly what is reinforcing and what is not reinforcing for each team member, design a precise schedule of reinforcement for each team member, and maintain that discipline over a very long period of time. Although that might be possible, the best outcome that could be hoped for would be mediocrity.

And, it is highly probable that morale would decline to the point that little real work would get done unless the “boss” was constantly vigilant. An unsustainable process! Additionally, punishment encourages all sorts of counterproductive behaviors such as avoidance, lying, hiding mistakes, malicious obedience (doing exactly as one is told while knowing it will cause problems), sycophancy, and many other undesirable responses.

More importantly, it would create an overly dependent workforce that would be helpless without the direct oversight of their managers. And, the resulting culture would be full of all the resentment, distrust, and cynicism that are the natural outcomes of attempts to manipulate. Human beings are not rats. It isn’t that people don’t respond to rewards and punishment. They do. Most parents raise their children that way. According to Dr. Thomas Gordon, “Most children were brought up in families in which one or both parents administered frequent and liberal doses of rewards and punishments to make their kids do what the adult decided they should do.” He goes on to assert that these children take these lessons with them into adulthood.

Small wonder our organizations rely so heavily on boss-subordinate relationships to function. Some leadership training continues to encourage leaders to employ even more ways to use their power to gain compliance from their employees. Gordon goes on to say, “…no wonder these leaders express such disbelief when confronted with the idea that they lose influence when they use power.

In fact, most of them enroll in the L.E.T. (Leader Effectiveness Training) course expecting to be taught how to use their power more cleverly or more wisely – certainly never expecting to be taught not to use it at all!” (Gordon, Thomas. Leader Effectiveness Training: The Foundation for Participative Management and Employee Involvement, 1977, G. P. Putman’s Sons, New York, NY).

While an employee who lies, cheats, and steals may be more than deserving of punishment, or a team member who spends many extra hours to finish a challenging project on time may certainly deserve a reward for a job well done, as the primary tool for creating a high performance culture, rewards and punishments are woefully inadequate and often turn out to be obstacles to improvement.

Much of the research on rewards and punishment in the workplace focuses on what kind of reward or punishment is more effective*. Or, whether rewards work better than punishment. Neither approach asks the right question. Do you, as a leader, need to impose rewards and punishment on your team members at all?

All environments have built in rewards and punishments. For example, you complete a difficult report on time and it feels good. That is a kind of reward. Your name gets mentioned in a flattering way during a meeting and it makes you proud. You get to spend the whole weekend with your family because you finished everything at work by the end of the week. A customer thanks you for making a special effort. Of course, the opposite occurs as well. Someone frowns because you interrupted her during a meeting. A customer is angry because of a late delivery.

All of these things are rewarding or punishing. But, they are the natural outcomes of doing work. They are not imposed by someone who has power over you. It is this tendency to try and control employees through the imposition of rewards and punishments intentionally that is risky. This is called extrinsic reward and punishment as contrasted with intrinsic rewards which come from how you feel after you accomplish something. Or, with the guilt or sadness you feel when you mess up. Leadership training that helps participants learn that an organizational culture in which intrinsic motivation rules is far more useful. Such organizations are simply more effective and sustainable. They are less fragile and dependent on the good will or skill of the leader. They are also less expensive because they require so much less supervision and tend to produce higher quality work at every level.

leader manager employee performance skills leadershipHow would a leader go about creating such an organization? When I first went to work in Corporate America, I was fortunate to have a manager who was the kind of leader who understood how to do that. He had a long history of successfully turning around troubled or mediocre factories. As the plant manager, he seemed to know just how to create the kind of culture where people would want to be productive. I asked him to explain his methods to me. Here was his answer. “When I have a new assignment, the first thing I do is figure out what we need to do in order to be successful as a business. Then, I get everyone together and tell them. Then, I ask them what they need in order to do that. I listen to what they say, then get them what they need.” I thought, “Too simple.” It is, of course, an oversimplification in a way. But, that truly is the fundamental contract between leadership and team members in high performance workplaces.

In our first assignment, our factory of 120 people increased its productivity by 330% in the first 12 months of operation. External rewards and punishment had nothing to do with the success. As team members learned more and more about the business, what was required, how their actions effected the outcomes, how their team functioned, etc., they became increasingly excited about coming to work. Each success produced more enthusiasm which then produced more success, etc.

There was an upward spiral of accomplishment that was highly rewarding to the team members. After one especially good month, the teams decided to purchase T-shirts with their factory logo printed on them. A picture of the whole group appeared in the company newspaper. A few days later, we received a call from a factory manager in another department who wanted to know, not how we achieved the goal, but where we got the T-shirts. I guess he figured if he bought his employees the same kind of T-shirt, they would be just as happy and productive.

In over 30 years of working with organizations, I have never found anything more “motivating” for team members than success. A pat on the back or a nice certificate or a trip to a nice resort once in a while is fine. It can be a useful gesture by the company. But it is no substitute for the real thing: leaders who hold people accountable, listen to what they say, respond intelligently, aim to resolve conflicts equitably, and tell the truth. No matter how clever or well-intentioned your reward system, it still sends the message to your employees (subordinates) that you have the power and the right to control them. You are somehow “better than they are.” And if you can reward them, you also have the right to punish them. Even if that is not your intention, that is how the message may be interpreted.

Leadership training that helps you focus on skills other than those that teach you how to reward or punish will serve you better in the long run. Workshops like Dr. Thomas Gordon’s Leader Effectiveness Training include many of the important skills that help leaders learn to create high performance organizational cultures that are not overly dependent on power and rewards and punishment to achieve their goals.
*There is support for the idea that “contingent reward” and “contingent punishment” are, for the most part, superior to non-contingent. This, of course, is consistent with most early laboratory research on reward and punishment, but it does not address the issue of whether reward and punishment need be used at all. Some studies report that rewards work better than punishments but still fail to look at the absence of both, at least the kind controlled externally by your bosses. (i.e. see, Podsakoff, Phillip. Todor, William. Skov, Richard. Effects of Leader Contingent and Noncontingent Rewards and Punishment Behaviors on Subordinate Performance and Satisfaction. Academy of Management Journal, 1982 Vol. 25, No. 4, 810-821.)

Learn more about L.E.T.