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…

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.

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.
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 models to teachers and students. He rails against this relentless tendency of those in charge to “do things to” people instead of choosing more democratic methods of “working with” others in an organization.

In This Episode:
•Gadfly—a person who interferes with the status quo of a society or community by posing novel, potentially upsetting questions, usually directed at those in power
•Perverse incentive—an incentive that results in making the issue worse (if you’re in healthcare you’ll have no difficulty coming up with examples)
•Rewards do motivate because they motivate people to go after more rewards (see perverse incentives…)
•Competition—in order for one person to “win” he must defeat another and this is deadly for collaboration
•Frederick Herzberg—Alfie Kohn cites this author of one of my favorite classic articles (One More Time—How Do You Motivate Employees? Harvard Business Review)

Meet Alfie Kohn
Alfie Kohn is the author of 14 books, including NO CONTEST: The Case Against Competition and PUNISHED BY REWARDS. In addition to his many writings on education and parenting, his articles on management include "Why Incentive Plans Cannot Work" in the Harvard Business Review and "Competition versus Excellence" in the New York Times. Fortune magazine has called Kohn “America’s most biting critic of money as motivator.” He has keynoted conferences across North America and abroad, as well as presenting at such organizations as AT&T, BMW, Dial, Mattel, NASA, and Pfizer. Kohn lives (actually) in the Boston area and (virtually) at alfiekohn.org.

Alfie Kohn's Website: https://www.alfiekohn.org/

Alfie Kohn’s appearance on Oprah with a demonstration of the effects of incentives on teenagers: https://www.youtube.com/watch?v=_6wwReK