The article originally written in 1975 by Steven Kerr remains as
relevant today as it was when originally published. As a veteran business
executive himself, Kerr effectively identifies the negative impact that “fouled
up” reward systems can have on the success of an organization. A fouled-up
reward system is defined as one which rewards the behaviour of a certain type
of behaviour while actually wanting people to do another, or possibly the
opposite. Kerr provides several examples where these rewards systems are in
place such as in politics, medicine, war, universities, business and sports. For
example, professors at universities are rewarded almost entirely for their
research and publications while society hopes that they dedicate their time and
resources to their teaching responsibilities and knowledge transfer to students.
Likewise, athletes are encouraged to develop their teambuilding skills while
team members are rewarded with individual awards such as most valuable player.
Kerr states that there are four general factors that may explain why fouled up
reward systems are so prevalent. These include 1) measuring performance with
simple, quantifiable standards resulting in goal displacement, 2) focusing on
highly visible behaviours instead of those that are hard to observe (scoring goals
vs. teambuilding), 3) hypocrisy and 4) focusing on emphasis of morality or
equity rather than efficiency. Organizations struggling to motivate and engage
their workers should first start by looking at their reward system to understand
which behaviours are being rewarded and what the desired behaviour is. If the
two behaviours are inconsistent then managers should focus on adapting the
formal reward system to reflect the desired outcomes. However, managers and
employees may find it difficult to break out of old ways of thinking about
reward practices and may be unable to see their flawed system. Therefore, it
may be beneficial to have a third party evaluate the reward system in place to
detect the inefficiencies. Lastly, flawed reward systems may exist due to a
disconnect between organization goals and intrinsic motivations of employees.
Managers who recognize their reward system is flawed should seek to align the
behaviours they want to reward which benefit the organization and those which
meet the motivations of employees.