Leaders may believe that performance-based incentives, such as higher bonuses, will motivate employees to perform better. However, recent research suggests some workers reach those high targets through unethical means, The Washington Post reported Nov. 28.
Workplace incentives can be a "cure as well as a poison," Tae-Youn Park, PhD, director of research at Ithaca, N.Y.-based Cornell University's compensation studies institute, told the Post. Dr. Park, along with researchers from Nashville, Tenn.-based Vanderbilt University and Seoul, South Korea-based Hongik University, published a study to the Academy of Management Annals examining 360 articles and studies about the relationship between incentive programs and ethics.
Incentives that are challenging yet achievable motivate people to focus on hitting the goal rather than the actions they take to get there, according to Dr. Park. His team found that people are more likely to hide ethical lapses when working in groups, because it is easier to justify bad behavior when multiple people are involved.
In one study reviewed by Dr. Park and his colleagues, physicians who were rewarded for better patient outcomes chose to take on healthier patients.
Incentives can be useful when they specifically encourage ethical behavior such as whistleblowing. But recognition and positive reinforcement are more likely to motivate employees than cash rewards in most situations, Bill Becker, PhD, associate professor of management at Blacksburg-based Virginia Tech, told the Post.
"Money brings out the worst in people, and it almost never brings out their best," Dr. Becker said.