If your team’s not behaving the way you want, you might have a reward problem.
“Show me the incentive and I’ll show you the outcome” – Charlie Munger
It’s not about what you ask for. It’s about what you pay for, praise, or promote. Incentives shape behaviour more than intentions ever will.
Incentives Drive Behaviour
AutoGlass switched from hourly pay to a piece-rate model for their windscreen installers. Productivity jumped by 44%.
But it wasn’t just the same people working harder. The shift attracted faster, more efficient workers, and pushed out the slower ones. The reward system changed who showed up and how they worked.
That’s the power of the right incentives.
Set Better Rewards
As the author, Tim Ferriss puts it plainly in The 4-Hour Chef:
“A goal without real consequences is wishful thinking. Good follow-through doesn’t depend on the right intentions. It depends on the right incentives.” – Tim Ferriss
How you set rewards drives how your people behave. Pay a manager just to cut costs and they’ll slash too far. Pay only for growth and they’ll overspend. Smarter move? Split their bonus, half for money saved, half for money made. You get balance. And the business wins.
If your team’s not doing what you want, you’re probably rewarding the wrong thing.
When Rewards Backfire
Use rewards with caution. Daniel Pink’s research in Drive shows money rewards can sometimes kill motivation:
“People use rewards expecting to gain the benefit of increasing another person’s motivation… but in so doing, they often incur the unintentional and hidden cost of undermining that person’s intrinsic motivation.” – Daniel Pink
For simple jobs, rewards work well. For creative work, design, coding, writing, they don’t. What matters more? Getting better at something, having freedom, and doing work that feels meaningful.
That’s the real reward.
Take Action Now
- List your three biggest business problems
- For each one, ask: “What rewards might be causing this?”
- Check if people are rewarded for what you actually want them to do
- Change one reward system this month and watch what happens
People don’t do what you ask. They do what you reward. So when something’s broken, ask yourself:
What’s the carrot?
