The High and Hidden Costs of Rewards

Some really provocative work is being done in the nation’s universities and labs about what really motivates people – and what quashes motivation as well.

One of the essential questions in Drive: The Surprising Truth About What Motivates Us, by Daniel Pink, is this: which type of motivation is most effective – internal or external? Self-motivation or motivation sparked by the promise of a reward?

Pink says that the current model, which he calls Motivation 2.0, is driven by external rewards and needs a serious upgrade. It’s a model built on sticks and carrots – one that believes “the way to improve performance, increase productivity and encourage excellence is to reward the good and punish the bad.” Of course, those rewards and punishments come from an external source – a parent, a boss, an advertiser.

And it’s true that external rewards can create some powerful short-term results. But here’s the kicker for those of us trying to create long-term impact in energy efficiency and sustainability: After a while, they stop working. In fact, they can produce the opposite effect of we were originally trying to create.

Here’s how that works, in simple terms. Let’s say your son doesn’t help out around the house very much, and all you want him to do is take out the trash. So you offer to pay him $2 for every time he takes out the trash. This works for a little while, but then your son starts to expect the reward, and his brain reacts like an addict. Soon, he needs $3 to feel the same sense of reward for taking out the trash even though the task is exactly the same. Studies have proven that people’s brains react alarmingly similarly when they’re promised a monetary reward as when they’re given cocaine, nicotine or amphetamines.

Short term gain. Sure. But now your son won’t do any chores unless he’s paid. And he won’t do anything beyond what he’s getting paid to do. There’s no extra effort on his part. And soon his prices go up. You can see where the long term picture is headed.

Rebates to help people improve their home’s energy efficiency help in the short term, but are we setting ourselves and them up for a failure to change long-term behavior? Will people do the other things we’re asking them to do (with no attached reward) like turn out their lights, unplug things or adjust their thermostats? Collecting points to buy green items is immediately rewarding – especially when you trade in those points for a prize – but what happens when those prizes aren’t exciting anymore? When our brains start wanting more, more, more for the same efforts? Do green product sales go down?

Stanford University psychologist Carol Dweck argues that people need to be praised for their efforts instead of the eventual outcome. In her experiments, when people received praise for their hard work, even if the outcome wasn’t completely perfect, they took on bigger challenges. However, when people were praised or rewarded based on a positive outcome, they viewed new challenges as potential failures and shied away.

In the world of energy efficiency and sustainability, we need long-term efforts. We need people willing to take on bigger challenges – not because someone is paying them to, but simply because they find the journey inherently rewarding. This intrinsic motivation produces better, more creative, longer-term results. As Pink says, “It’s a renewable resource,” whereas rewards are finite.

As you’re designing your next promotion, your next product or your next campaign, ask yourself what kind of motivation you’re looking to create – short-term motivation that will fade or long-term motivation that will lead to greater success.