THE PSYCHOLOGY OF REWARDS AND INCENTIVES

Few topics are as well-researched in psychology as the effects of rewards and incentives. At the same time, few topics are so consistently ignored in practice. Perhaps this is because employee compensation is widely viewed as a financial or legal issue. However, a closer look is worthwhile.

At its core, designing a compensation system involves understanding four different challenges and the underlying psychological mechanisms simultaneously:

What positive or negative effects do different compensation systems have on employees’ intrinsic and extrinsic motivation?
How must rewards and incentive systems be structured so that employees are attracted to and retained by an employer?
How do different forms of rewards and incentives affect teamwork and social dynamics, and how can dysfunctional effects be avoided?
How do you create a sense of fairness and equity, and what happens when people feel they are being treated unfairly?

This lecture imparts the essential knowledge of the psychology of rewards and incentives needed to sensitively evaluate and develop compensation systems. Dilemmas often arise, but it’s good to at least be aware of them.

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CEOs, executives, board members, works council, CHROs, HR directors, HR professionals, consultants and employees

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The Compensation Challenge

In 2021 I did a keynote on the psychology of rewards. I talk about the critical balance of motivation, acquisition, equity and social dynamics.

Human Resources Strategies

In my comprehensive book Human Resources Strategies, I devote three chapters to remuneration strategies.

Motivation versus Acquisition and Retention

In this little video I explain, why we should not always think about the effect of reward on motivation. Very often it is rather about getting good people on board an retaining them.

The Dilema of Rewarding individual Performance

Treating high performers differently might be a mistake. Not doing so might be a mistake too. You might either kill collaboration or you lose or not attract high performers.