The way you reward and recognize your people may be promoting some unwanted behaviors.  That’s because the use of extrinsic motivators (like money, perks, bonuses, and promotions) may change an employee’s focus at work and can also lead to a never-ending cycle of unfulfilled needs, unrealistic expectations, or an overdeveloped sense of entitlement. 

The bad news is that you may have brought the problem on yourself by the way you structured compensation, rewards and bonuses.  

Once you set people on a path of extrinsic rewards, you will need to prepare to keep increasing the pay, bonus, or promotions every year, or be prepared to disappoint people when you are not able to do so.  (A situation many companies find themselves in today.) 

Here are a couple of ways to minimize the downside when using these traditional forms of extrinsic motivation.

Keep things in perspective. You want to reward and encourage people who attain the goal—but you don’t want it to become the goal. You don’t want to hear people saying, “I’m just here for the money.”

Make sure the goal is self attainable.  If you are going to use extrinsic motivators, make sure that attainment is completely self controlled by the employee.  You don’t want a manager or supervisor dangling the reward in front of an employee like a carrot on a stick.  This is a coercive strategy that just encourages boss-watching and brown-nosing with people spending half their time making sure the boss notices what they are doing.

Deepen the experience. The tough economic times of the last two years have shown how shallow the employer—employee relationship has become in many organizations.  As Warren Buffet reminds us, “It’s only when the tide goes out that you learn who’s been swimming naked.”

Look beyond money (but still provide it) and then shift the discussion to linking individual work goals into larger organizational goals.  The task is to move people away from short-term transactional thinking and into something larger and more sustainable.  

Learn more

For specific strategies on how to make this happen in your organization, be sure to check out the following articles by Scott and Ken Blanchard at Fast Company

The Role Money Plays in Engaging Employees

Maintain A Startup Attitude for a Passionate Office

Managers: Set People Free to Promote Growth and Get Results

PS: On January 25, The Ken Blanchard Companies will be hosting a Leadership Livecast on the problem of Quitting and Staying.  Have you successfully addressed quitting and staying in your organization? Can you share it in five minutes or less?  Videotape yourself and send it to us.  You could be a featured speaker!  Click here for details.