Top 8 Reasons Why Rewards Programs Fail to Motivate

By Shauna Geraghty

0 min read

Rewards and Motivation

Despite managerial efforts, some extrinsic employee rewards programs fail to produce the desired results. Below are the top eight reasons why rewards programs fail:

1. Rewards programs are too cash-focused

Solution: Managers must combine cash rewards with material and social rewards. By including all three components, managers will ensure that their rewards programs have the most desired outcome.

2. Employee don’t appreciate the rewards

Solution: Rewards should be personalized so that they have the largest impact on each employee. Managers should spend time understanding the personal needs of their employees and match the reward to fit their needs.

3. Benefits transform into entitlements

Solution: End employee entitlement by rewarding performance on a variable ratio and/or variable interval schedule of reinforcement. Employees will be less likely to know when they will be rewarded, more surprised by the reward and feel less entitled.

4. The wrong behavior is rewarded

Solution: Only reward behavior that will result in an increase in performance. Identify acceptable behavior and performance targets and consistently reward employees that meet the predefined standards.

5. There is too long of a delay between performance and reward

Solution: Offer immediate rewards for performance using computerized incentive programs. Ensure that the program has a social component in order to increase its impact on performance.

6. Too many one-size-fits-all rewards

Solution: Personalize each reward to each employee or allow employees to choose their own reward. This will maximize the impact of the reward and increase motivation to obtain the reward.

7. Use of a single reward with short-lived motivational impact

Solution: Ensure that reward programs are long-term (last longer than 6 months) and that rewards are given periodically throughout employment.

8. Continued use of demotivating practices (e.g. layoffs, excessive executive compensation)

Solution: Ensure that reward practices as well as executive compensation amounts are transparent. When employees can freely access this information, they perceive the practices as more fair.

Identifying the cause of a failing rewards program is essential in fixing it. Managers should consider each of the top eight reasons why rewards programs fail and engage in reparative action or take proactive steps to increase the effectiveness of their program before it starts to fail.

Works Cited:
[1] Jeffrey, S.A. (2009). Justifiability and the motivational power of tangible noncash incentives. Human Performance22, 143–155.
[2] Kreitner and Kinicki. (2004). Organizational Behavior. Boston. MA: McGraw Hill, Irwin.

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Shauna Geraghty

As the first U.S. employee, Shauna helped to scale Talkdesk to over 1,000 employees in 7 offices globally. During her tenure, she has built Talkdesk's Marketing, Talent and HR functions from the ground up. Shauna has a doctorate in clinical psychology and has applied foundational knowledge from the field of psychology to help propel Talkdesk along its hyper-growth trajectory.