The first research from the International Site Foundation calls on companies to rethink cash rewards.
Incentive experts have been saying it for years, but now there's scientific proof: Cash really isn't king — at least not when it comes to motivating collaborative behavior. The results of a series of nine experiments conducted jointly by three research universities — the University of Minnesota, Florida State University, and the University of British Columbia — and released by the iSITE Foundation suggest that money encourages individuals to work alone, play alone, and put distance between themselves and others.
In each experiment, participants were broken into three groups: one shown pictures or screensavers of money, one shown nothing, and one shown a neutral object such as a seascape. After this “priming,” participants were asked to perform a series of tasks or were exposed to an environment in which they could display social behavior, such as assisting someone with a task. In each instance, the findings were identical. When money was introduced into otherwise neutral situations, people became less helpful toward their peers and the people conducting the experiments, they stopped asking for help, and they even sat farther away than those in either of the control groups. In one situation, those exposed to money chose to work alone 83 percent of the time.
Kathleen Vohs, PhD, the lead re-searcher in the study and McKnight Land-Grant Professor at the University of Minnesota's Carlson School of Management, believes the research is directly applicable to incentives, and industry experts concur. “This research shows us that cash not only may not be the best motivator, it may actually work against what you're trying to accomplish because most business projects have a team aspect to them,” says Bob Vitagliano, CITE, executive director of iSITE.
One area in which this research might be particularly helpful is in identifying ways to motivate employees in the middle tier of performance. This is an important area when you consider that 25 percent of midperformers are actively seeking other jobs, according to a recent Leadership I.Q. survey of more than 70,000 employees, managers, and executives.
“Understanding the impact of cash on the middle performer is important because people tend to throw money at individuals if they threaten to leave the company,” says Fay Beauchine, executive vice president, meetings, incentives & events at Carlson Marketing Group, Minneapolis. “There is a war for talent right now, and it's just as much in the middle as at the top. So if people are thinking about leaving, you'd better understand the reasons why, and you'd better also understand what can keep them.”
While cash is always the first thought, Beauchine notes that it might not even be relevant to why someone is leaving — and as this study indicates, it might even distance a worker further from the company rather than engender loyalty. “People just naturally assume that it's money, but it could be other issues. And it really boils down to how engaged they are in the company they work for.”
Vitagliano agrees that motivating the middle tier is frequently done with cash rewards, and he doesn't think that is effective. “I think that's why we never were able to really move them forward the way we should have,” he says.
Just because cash is not the answer, however, doesn't mean that other incentives are. “If cash isn't a good motivator, what is?” Beauchine asks. “It hasn't been proven that travel is a perfect motivator, but it opens the door for the discussion that if cash isn't a good award, what could be a better award, and why?”
The full study, The Psychological Consequences of Money, is available to purchase from www.sciencemag.com; SITE members can download a copy, along with Beauchine's analysis, for free at www.InternationalSITEFoundation.org.