Managers and HR type people are big on setting objectives and identifying a key metric to absolutely, without doubt determine whether or not that objective was met – usually tying bonuses to that metric. The problem with this is that people then game the system. If the key metric is lines of code per day, then people write excessively long, complex ways of doing things because that’s what will get them rewarded. If the metric is defects per thousand lines of code, people stop reporting bugs. For any given metric, there’s a simple way to game it and whether or not people realize they’re doing it, they will trend towards gaming the system. Overall, this leads to a net loss for the company because people are concerned about their bonuses, instead of focussing on working well as a team and doing what’s best for the company.

I’d always considered that bonuses and other incentive plans were just ineffective for engineers because they tend to have more of a build cool stuff value proposition rather than a make lots of money value proposition. It seems however, that incentive plans just don’t work in general – Incentive Pay Considered Harmful is one of the articles that adds to the viewpoint that engineers shouldn’t be given incentive plans, but it links off, sadly via a broken link, to the writings of Alfie Kohn for the Harvard Business review. Alfie fortunately, seems to have written a number of articles on the subject, one of which is available freely on his website: For Best Results, Forget the Bonus.

While rewards are effective at producing temporary compliance, they are strikingly ineffective at producing lasting changes in attitudes or behavior. The news gets worse. About two dozen studies from the field of social psychology conclusively show that people who expect to receive a reward do not perform as well as those who expect nothing. This result, which holds for all sorts of rewards, people and tasks, is most dramatic when creativity is involved.

Personally, I view rewards as punishment – when I get them, that’s expected, when I don’t that’s punishment. Worse, when the wrong metrics are selected to judge whether or not to give the reward, or the circumstances change between the setting and receiving of the reward, the reward may be withheld because I focussed on doing what was best for the company instead of what is best for getting the reward. In whatever job I do, I consider it my professional duty to do my best and to achieve the best results I can for the company. I find it insulting that someone would question that level of dedication and professionalism by suggesting that dangling money in front of me would make me work harder.

Instead of using rewards, why not focus on improving the work environment so that people enjoy their work more – enjoyment is one of the strongest motivating factors in people. Feeling like an important part of a team is another key motivating factor, so focus on building both good team spirit within departments but also a team spirit company wide – we should all feel like we contribute to more than just our little unit in the business, we are building the company each and every day. Ephox pulls off miracles of engineering on a regular basis and we do it by enjoying the work that we do. Every member of the engineering team is dedicated to improving the business and genuinely wants to see the business succeed. That’s because we work as a team in a friendly, happy environment with carefully picked professional employees. We don’t work for incentives or money, we work because we love what we do and take pride in it. The money has to be there to pay the bills and be able to do what we want to outside of work, so it’s important to pay your employees well, but it’s not the driving focus that makes us come to work everyday that managers tend to think it is.

If you think your team isn’t working at 100%, then look into how much they are enjoying their work, how well they gel as a team and how much the company is listening to their ideas, comments and feedback to make them feel like part of the company’s team, then improve those areas. Dangling a carrot in front of them is more likely to demoralize them and cause them to game the system.