A study at the University of Alberta in 2001 by Judy Cameron, Katherine Banko, and W. David Pierce reviewed hundreds of experimental studies that identified how some rewards often decreased intrinsic motivation. The reason, they say, lies primarily on how the rewards are structured.
Destructive Rewards: When a tangible reward is announced beforehand, such as a bonus or a prize, but the reward is only loosely tied to performance, the reward may actually decrease intrinsic motivation in people who were originally highly interested in the task.
Partially useless rewards: In the study, when a reward was linked to performance, intrinsic motivation did not decrease, but it didn’t necessarily increase either.
Relatively beneficial rewards: The best results in the study were found when offering verbal rewards for activities that people are free to choose to do (not required) and which they find interesting. For example, you may offer recognition to individuals who complete a set of training courses that isn’t mandatory but that can enhance their skills or knowledge of products or services.
In our experience, performance is often a product of motivation. As we see from the research, motivation is highly dependent on soft skills and leadership. Are you using the right carrot?
Cameron J., et al. (2001). Pervasive Negative Effects of Rewards on Intrinsic Motivation: The Myth Continues. The Behavior Analyst. Number 1 – Spring. Retrieved from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2731358/pdf/behavan00009-0003.pdf