Motivational workplace award programs not as effective as thought

Think having an “Employee of the Month” program will motivate your workforce? Think carefully.

Lamar Pierce

Award programs actually may be less effective at motivating employees than previously thought, finds new research from Washington University in St. Louis’ Olin Business School and Harvard Business School.

Lamar Pierce, PhD, associate professor of strategy at Olin, along with his colleagues, doctoral student Timothy Gubler and Ian Larkin, PhD, assistant professor at Harvard, finds that even simple awards programs can have much broader and complex implications for employee behavior.

Their study, “The Dirty Laundry of Employee Award Programs: Evidence From the Field,” is a Harvard Business School working paper available on the Social Science Research Network.

The researchers used field data from an attendance award program implemented at one of five industrial laundry plants.

They found that awards programs can induce unintended consequences that can reduce the net value of the program.

The researchers show that two types of unintended consequences limit gains from the reward program. First, employees game the program, improving timeliness only when eligible for the award, and strategically calling in sick to retain eligibility.

Second, employees with perfect pre-program attendance or high productivity suffered a 6 percent to 8 percent productivity decrease after program introduction, suggesting they were demotivated by awards for good behavior they already exhibited.

Overall, the results suggest the award program decreased plant productivity by 1.4 percent, and that positive effects from awards are accompanied by more complex employee responses that limit program effectiveness. While awards programs can be powerful tools for motivating employees, companies must think carefully about the unintended consequences that can cripple their efficacy.

The paper can be found at