Rewards, even monetary ones, don't result in increased performance as much as doing work that matters. That's what a recent study by the World Economic Forum reveals.
The Forum admittedly “manipulated
the meaning of work” in a field experiment. In the
high-meaning condition, workers were told that their work, which consisted of
entering data into an electronic database, was of great importance for a
research project. In the low-meaning condition, workers were told that their
work was merely a routine quality check that most likely would never be used. They also offered different forms of non-monetary or monetary incentives to examine how performance changed. They paid workers a fixed wage, a fixed wage plus a bonus for every data
entry or a fixed wage plus a symbolic award, like a trophy.
Those who received
monetary incentives (a bonus for each data entry) had 6% higher productivity
rates than those who received nothing or received a symbolic award. Thiis
group was told nothing about the meaningfulness of their work.
For
the group of workers who were told their work was not meaningful, rewards has a significant positive effect on
performance. These workers, doing work
that didn’t matter, were 18% more productive when they were rewarded. Further analysis revealed that workers were
demotivated by the unimportant work, but could be re-motivated by incentives of any
kind – monetary or symbolic. In contrast, when the worth of their work was
perceived as high, the recognition didn’t impact performance at all. In
the latter case, they were already giving their best because they believed in
what they were doing.
Overall,
the studies revealed that monetary rewards can indeed result in increased
performance. People want to be well
compensated for their work. And, if they
know they will be paid more for doing more, they tend to do more. This really
isn’t a new concept – pay people to perform and they will perform. Here is the evidence that today's business leader can leverage. Even when we
don’t have anything ‘extra’ to offer our workforce as a reward, they appreciate
knowing how their work will contribute to the overall success of the business
or how their deliverables will be utilized.
When they have a sense of worth and value, they will still do more -- in this study workers increased their productivity three times as much (6% versus 18%) when they felt work was valuable.
So
when your budget gets cut and you can no longer offer gift certificates, free
vacations, quarterly bonuses, or pay increases for top performers, don't fret. Simply make sure
you communicate the value of the work to the people doing the work.
This could encourage higher productive even more than money alone.
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