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Alberto Venturini

Do rewards and incentives really motivate people?

Scritto da

Alberto Venturini

in

Rewards · 4-minute read

Let’s put it another way: do rewards and incentives motivate people to feel content and driven at work and be more productive?1. Introduction

The practice of offering bonuses, gifts or incentives to employees is widespread across all organisations. In the context of SMEs, it often represents the most immediate lever used to try to increase engagement, satisfaction and performance. However, the scientific literature indicates that such tools produce very different effects depending on the nature of the work, perceptions of fairness and the underlying psychological dynamics. The central question is therefore: do rewards and incentives really motivate people?

2. Incentives and motivation: what the research says

Studies on motivation, particularly in the field of occupational psychology, distinguish between extrinsic and intrinsic motivation. ‘Carrot and stick’ systems, based on the if… then… logic, fall into the first category.

2.1 The limitations of extrinsic systems

Research by Deci, Ryan and colleagues (1985, 2000) shows that financial and material rewards only work for routine, repetitive, mechanical tasks. In such activities, rewards can increase speed and accuracy, provided that:

  • the work is objectively simple and standardised

  • operational autonomy is guaranteed

  • the reward system is clear, transparent and consistent

This framework is also consistent with the approach to reward systems outlined in HR manuals and studies on remuneration policies, where variable incentives generate results in highly structured tasks with measurable outputs.

2.2 When incentives become counterproductive

In roles requiring creativity, problem-solving, conceptualisation and decision-making, financial incentives produce the opposite effect: they reduce motivation, creativity and willingness to engage voluntarily.

This phenomenon is known as the overjustification effect, whereby external rewards ‘stifle’ intrinsic motivation, shifting the focus from interest in the task to the desire to obtain the reward.

3. The theoretical framework: Self-Determination Theory

Self-Determination Theory (Deci & Ryan) is currently the most widely accepted theory for understanding human motivation. It identifies four fundamental conditions for an individual to be motivated, effective and engaged in their role.

3.1 Fair remuneration

Remuneration must be fair in relation to the market and consistent internally. In the absence of fairness, no incentive can compensate for the perception of injustice.

3.2 Autonomy

The individual must be able to choose how to organise part of their work. Autonomy does not mean a lack of control, but the ability to make decisions within clear boundaries.

3.3 Mastery

Employees must have the opportunity to improve, learn and refine their technical and behavioural skills. A lack of growth reduces motivation.

3.4 Purpose

People want to contribute to something meaningful. Purpose may or may not coincide with the company’s objective, but it must be perceived as meaningful.

If these conditions are not met, no incentive will be able to generate lasting motivation.

4. Why personalised rewards work better than standard rewards

Research on recognition theory shows that people respond more positively to forms of reward that value identity, specific contributions and observable behaviours. Generic recognition, such as ‘good work’, has limited impact. Conversely, feedback that links the employee’s personality and actions to company objectives improves engagement and strengthens the sense of belonging.

This logic is consistent with the models of remuneration policies and reward systems described in HR literature, according to which an effective incentive must be situational, proportionate and integrated into the performance management system.

5. Answer to the initial question: do bonuses and incentives motivate people?

In light of the scientific evidence, the answer is NO, at least in the traditional form in which many companies continue to use them.

Incentives only motivate in very specific contexts and for routine tasks. For all other roles, which represent the majority in modern organisations, motivation stems from autonomy, fairness, opportunities for growth and a sense of purpose in work.

Bonuses can be useful, but only as a complement, not as the primary driver.

Bibliography

  • Deci, E. L., & Ryan, R. M. (1985). Intrinsic Motivation and Self-Determination in Human Behaviour. Springer.

  • Deci, E. L., & Ryan, R. M. (2000). The “What” and “Why” of Goal Pursuits. Psychological Inquiry.

  • Pink, D. (2009). Drive: The Surprising Truth About What Motivates Us. Riverhead Books.

  • Hackman, J. R., & Oldham, G. R. (1976). Motivation through the Design of Work. Organizational Behavior and Human Performance.

  • OD&M Consulting. Reward Systems. Design Guide.

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