Apply Neuroscience to Motivate and Reward Employees

• Can monetary incentives backfire?
• How does the brain respond to monetary rewards?

Promises of rewards in the future can be a powerfully motivating leadership tool. With an awareness of how our brains react to rewards, though, you can make these incentives far more effective.

In the award-winning movie, “Glengarry Glen Ross,” the negative side of rewards is at the core of the film. A group of real estate salespeople working in a high-stress environment gets a new manager. He starts a sales contest. He tells the sales team, “First prize is a new Cadillac. Second prize is a set of steak knives. Third prize is ‘You’re fired.'” The result is disastrous. Motivation through reward can be complicated.

The brain’s dopamine levels are strongly linked to pleasure. The first time a reward is given, dopamine levels surge. However, having the same reward repeatedly leads to decreased dopamine levels over time. That can explain why a pay raise often results in improved performance immediately. But the motivational power of monetary incentives often diminishes. However, introducing an intermittent, unpredictable reward increases dopamine levels.

The anticipation of a big prize is what drives millions of people to buy lottery tickets and to spend their money at casinos.

Money May Lose Effectiveness as a Motivator

Pay increases and annual bonuses are commonly used to motivate employees to improve their performance. However, their effectiveness often diminishes as the novelty of such incentives fades away.

Discontinuing an annual bonus that has been given every year is a sure way to create discontent and reduce performance. On the other hand, monetary bonuses that are based solely on performance can stimulate increased effort, based on anticipation of the reward. Careful planning, guided by Neuroscience insights, can result in more effective motivation through such awards.

Non-Monetary Rewards Can Be Equally Effective

It is almost universal for businesses to use monetary incentives to drive up productivity. However, other types of rewards can be equally or even more effective. Neuroscientists discovered similar brain activity patterns in the brain’s pleasure network when either a monetary or social award was given.

Such incentives can increase job satisfaction and performance at every level of the organizational chart.

Where rewards, either monetary or social, are extensively used as motivational tools, they often become expected over time. During an economic downturn, there is a temptation to put such rewards on hold. Just as a reward activates the brain’s pleasure network, withholding an expected reward triggers the brain’s pain responses. That can have a distinctly negative emotional effect and reduce motivation. If your leadership team understands how to incorporate non-monetary rewards, you can motivate your staff just as effectively.

Guide Your Employee Motivation and Rewards with Neuroscience

Understanding how the brain reacts to rewards and motivation is important. Too many incentive programs in business and organizations are based primarily on tradition and guesswork. Sometimes they work, and sometimes they backfire unexpectedly. Reviewing your current incentives and rewards from a Neuroscience perspective can reveal areas where they are ineffective or even produce a negative response. Dr. Terry Wu has been speaking on leveraging Neuroscience to guide leadership at all levels. He provides valuable insights through speaking and consulting.