Short-Term Rewards Don’t Sap Long-Term Motivation

If you’re temporarily paid to do something, would that change your motivation or interest in doing the same thing when you’re not paid to do it anymore? University of Buffalo’s Indranil Goswami, a graduate of Chicago Booth’s PhD Program, and I investigated this long-standing question, which I’ll get to soon. But first, some background.

Psychologists and economists have long debated the effectiveness of incentives. From the viewpoint of economics, it’s almost definitional. Much of the empirical research in the field is about how incentives—overt, hidden, and even perverse—influence and explain people’s actions. While this view can be summarized simply as “incentives work!” identifying what the incentives are can be tricky, and the definition of what constitutes an incentive has been broadening. University of California at San Diego’s James Andreoni, for example, in 1989 defined the “warm glow” feeling that a person may get from donating to others as an incentive that can explain altruistic behavior.

Psychologists tend to think in terms of internal mental processes and motivators, and have historically been skeptical of external incentives, particularly monetary ones, which they see as impure. External incentives, they believe, interfere with people’s true, or intrinsic, motivation.

Which brings us to one of my favorite papers, a comprehensive review in 1999 by University of Rochester’s Edward L. Deci and Richard M. Ryan and McGill University’s Richard Koestner of how incentives affect intrinsic motivation. They looked for experiments that tested how motivated people were to do a task without compensation after having been temporarily paid to do the task. In the paper, Deci, Koestner, and Ryan painstakingly gathered up the research, including unpublished studies (in order to deal with publication bias); categorized the differences in experimental methods; and summarized the average findings.

They examined the free-choice paradigm, in which participants are paid to do an activity such as drawing and then are put in a situation in which they could do more of the activity if they chose, but with no further compensation. Their decision about whether to, say, draw more is compared with the same decision among people who were never paid to draw in the first place.

On the basis of the 101 studies they compiled, it looks bad for incentives. Participants who were paid to do the activity did less of it when the payment was no longer available than participants who had never been paid. From a classical economics perspective, this may appear weird—if you like drawing, you should draw, whether or not you were previously paid to draw. To many psychologists, however, the reason seems clear: paying people changed how they viewed drawing, undercutting the intrinsic motivation that made it fun in the first place.

The experiments varied a lot, and so did the results. Verbal rewards such as praise had positive effects on subsequent motivation, at least for college students. The negative effects were driven by tangible rewards, such as money, in situations where participants were paid conditionally—that is, they earned a reward only when they tried the activity, completed it, or achieved a particular performance in it.

What does this mean? Deci, Koestner, and Ryan’s proposed theory centers on feelings of autonomy: people do things in part to feel good about having done it themselves. When someone else comes in and provides a conditional reward, it eliminates the ability of the activity to provide the autonomy benefit. And here’s the key: this is assumed to be a long-term change in how the activity is perceived and experienced. As a result, there’s a risk to using incentives. As the researchers warn, “if people use tangible [i.e., monetary] rewards, it is necessary that they be extremely careful . . . about the intrinsic motivation and task persistence of the people they are rewarding.”

The evils of incentives

The view that a temporary incentive could undermine intrinsic motivation has had a major impact on policy, particularly in relation to children and education. The author and lecturer Alfie Kohn has published several books on the topic, including one called Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A’s, Praise, and Other Bribes. Appearing on the Oprah Winfrey Show in 1996, he explained why he saw rewarding kids as a bad idea: “One of the findings in psychology that has been shown over and over again [is that] the more you reward people for doing something, the more they tend to lose interest in whatever they had to do to get the reward.”

He went on to talk about grades as problematic incentives, and he went further in his book, writing that verbal praise is coercive and should be avoided because it contains an implied threat to withhold praise in the future.

But in Deci, Koestner, and Ryan’s meta-analysis, verbal rewards had no negative effect on children’s subsequent motivation, and even tangible rewards had no postreward effect when the reward was unexpected.

The Oprah Winfrey Show followed up with an experiment of its own that yielded a somewhat implausibly strong effect. A representative from the show paid some students to do puzzles. When the representative left the room, the students who had been paid lost interest in the puzzles, while the students who hadn’t been paid did not. Kohn characterized this result first in terms of an inference-based theory of intrinsic motivation before circling back to the control-versus-autonomy account.

“If the kid figures ‘they have to bribe me to do this,’ then ‘it must be something I wouldn’t want to do,’ so the very act of offering a reward for a behavior signals to somebody that this is not something interesting,” Kohn said.