How to Demotivate Your Best Employees

By Dina Gerdman | Reviewed by Jean Darling, PT, LAT

It would seem to make sense that when companies recognize their workers with awards, they are likely to see a boost in morale and perhaps even inspire them to work harder. “Not really,” says professor Ian Larkin, “in fact, they may turn off your best employees altogether.” Approximately 80 percent of companies have incentive programs for employees, but it is important to explore the motivational factors behind the rewards for these to be successful.

In a research study performed by Larkin, five laundry facilities owned by the same company participated in a rewards system for their employees. The plant’s attendance award program began in March 2011 and continued for nine months. Employees with perfect attendance for a month, including no unexcused absences or tardy shift arrivals, were entered into a drawing to win a $75 gift card to a local restaurant or store. The winner’s name was drawn at a meeting attended by all the employees. At the end of the sixth month, the plant manager held another drawing for a $100 gift card for all employees with perfect attendance records over the previous six months. What they found was:

• Some employees ended up “gaming” the program. They found ways around the system to make sure they did not inadvertently break the rules.
• Second, previously stellar employees suffered a 6 to 8 percent decrease in their performance. Perhaps these employees were turned off for rewarding behavior they were already exhibiting.
• All in all, it led to a decrease in performance for the company of 1.5 percent, which led to $1,500 a month for this company.

Larkin says, “Having your top performing employees demotivated for all eight hours of their day ended up creating a much bigger hit to productivity than getting five more minutes of work from someone who came habitually late.” Also, Larkin believes that awards are more effective when they recognize good behavior in the past, rather than target behavior going forward. Plus, if awards are retrospective, you are less likely to see “gaming.” “It is motivational to hear that you’ve done a good job and are being recognized for doing the right thing,” Larkin says. “And it provides a good example for other people. People are not being rewarded because they changed their behavior to match what the manager wanted or by gaming.”

REFERENCES

Professor Ian Larkin. Harvard Business School Association. “The Dirty Laundry of Employee Award Programs: Evidence from the Field.” www.hbswk.hbs.edu.