Free rewards can be costly

Non-monetary award programs, done badly, could negatively impact an employer’s bottom line: Study
By Melissa Campeau
|Canadian HR Reporter|Last Updated: 03/06/2017

Could your low-cost employee reward program actually be hurting your bottom line? Yes, according to a recent study out of the United States.

While popular belief holds that reward programs such as “Employee of the Month” and “Top Sales Club” are inexpensive ways to subtly motivate workers, researchers at the University of California, Riverside found they might actually be reducing organizations’ overall productivity, if not implemented with care.

“These programs don’t bear the costs of traditional incentive or compensation systems, so a lot of organizations see them as having very few downsides,” says Timothy Gubler, assistant professor of management at the university’s School of Business Administration, and lead on the study Motivational Spillovers from Awards: Crowding Out in a Multitasking Environment.