The number of businesses using a sales bonus, merit bonus, or performance-based incentive to motivate employees keeps rising and yet, study after study indicates that pay for performance programs are barely effective. In fact, the most recent study conducted by market research firm, Willis Towers Watson, published in February 2016, found that only 20% of senior managers at North American companies surveyed felt that merit-based pay made any difference.
On the surface, pay for performance makes perfect sense. Put up a leaderboard of sorts, get employees pumped up in friendly competition, and reward them for their efforts. Give the carrot and employees perform, right? But, as we know from our understanding of intrinsic and extrinsic motivation, extrinsic motivators like a cash payout can actually lead to the opposite effect: demotivation.
Employees at Disneyland hotels resented their performance-measuring leaderboard, calling it "the electronic whip." According to a 2013 study by the Institute of Leadership and Management, only 13% of employees are motivated by bonuses. Instead, intrinsic motivators like job enjoyment, getting along with co-workers, and fair treatment by management rank higher. Blindly adding leaderboards, badges, and bonuses without addressing job satisfaction may be a misguided approach.
Of particular concern to the game industry is the demotivation that occurs after a long-term project has been canceled. Duke University Professor Dan Ariely began studying "perceived meaning" in work after noticing the apathy that sets in after a team works on a project for many years only to have it canceled. He found that the affected employees felt that their work was meaningless, just like King Sisyphus of Greek mythology, who was sentenced to roll up an immense boulder up a hill and watch it roll back down for all of eternity.
It turns out that meaningful work is very important and doing meaningful work is a reward in itself. In the study, Man's Search for Meaning: The Case of Legos," by Ariely, Kamenica, and Prelec, published in the Journal of Economic Behavior and Organization, the researchers purposefully set up pointless Sisyphean situations in which test subjects watched their reports shredded upon completion or their projects smashed in front of their eyes. Test subjects who were given "perceived meaning," such as how their work would impact underprivileged students, performed better and even were willing to accept less pay for their work.
The study also showed that even the slightest amount of acknowledgement of the effort it took to complete the task increased motivation in the test subjects. What does this mean for managers? Basically, small things like showing appreciation to employees and reminding employees how their individual efforts connect to a larger goal can make a big impact. If the larger project never gets completed, maybe an interim goal has significance.
Sande Chen is a writer and game designer whose work has spanned 10 years in the industry. Her credits include 1999 IGF winner Terminus, 2007 PC RPG of the Year The Witcher, and Wizard 101. She is one of the founding members of the IGDA Game Design SIG.