Could a well-intentioned recognition program slowly drain the life out of your best people? A few weeks ago, a friend asked a great question:
“In the book, Traction, by Gino Wickman, he talks about a company that offered a weekly $20 gift card to a team member who exhibits one of their core values. Do you think this is a good idea or would it cause problems?”
That got me thinking… what if that $20 gift card is actually sending the wrong message to some of your most valuable people and undermining the team’s motivation?
The Hidden Reality Behind Extrinsic Rewards
Understanding the intricacies of a team’s motivation is essential for leaders.
We’ve been conditioned to believe that recognition + reward = motivation. It’s simple, right? Do good work, get acknowledged, feel motivated to do more good work.
Except motivation isn’t actually that simple.
Understanding what drives a team’s motivation is crucial for maintaining a healthy work environment.
Here’s what decades of research tell us: extrinsic rewards often create the exact opposite effect we’re hoping for. They can backfire in unexpected ways and actually diminish intrinsic motivation, especially for knowledge work that requires creativity.
A Parable About Intrinsic vs. Extrinsic Motivation
There’s a popular story about an old man who really enjoyed his daily afternoon nap. But one day, some neighborhood children decided that the street in front of his house was the ideal spot for their afternoon football game.
The kids’ playing and loud yelling made it impossible for the old man to sleep. Determined to resolve the issue, he devised a plan:
- The next day, he approached the children and told them he loved watching their football games and would pay each of them $5 every day they played in his yard.
- The children, delighted by the unexpected reward, eagerly returned the next day to play and collect their payment.
- On subsequent days, the old man gradually reduced the payment by $1, saying he was running out of money, until eventually he could no longer pay at all.
- Disappointed and feeling that playing was now only worthwhile if they were paid, the children lost interest and refused to play unless they received money.
- The old man won. The kids stopped playing football in his yard, and he could finally enjoy his peace and quiet.
When Extrinsic Rewards Backfire
This story is often cited to illustrate a key concept in motivation psychology: extrinsic rewards can undermine intrinsic motivation.
The kids originally played football for the sheer fun of it (intrinsic motivation). Once the old man introduced an extrinsic reward (money), their motivation shifted from pure enjoyment to earning payment.
When the reward was removed or reduced, their original enjoyment was no longer enough to motivate them, and they stopped playing altogether.
The Psychology Behind This Phenomenon
Research and sport psychology confirm that extrinsic rewards — especially when introduced for activities people already enjoy — can diminish intrinsic motivation.
When people begin to associate an enjoyable activity with external rewards, they may lose interest if those rewards are taken away or reduced. This is known as the overjustification effect.
It’s often assumed that adding an incentive, like money, will boost a person’s motivation. However, that’s not the case here. The old man began rewarding the kids for voluntary actions they surprisingly found joy in doing. But the moment money was introduced, the children saw the task as a means to an end—getting paid. Once the money was removed, their interest waned.
But there’s something even more problematic happening here…
We’re assuming everyone is motivated the same way.
When Recognition Becomes Painful
Imagine you have a brilliant analyst on your team who always delivers exceptional work. Detail-oriented, thorough, always improving processes. But when you celebrate their accomplishments publicly, they get embarrassed and seem to shrink a little.
They’re thinking, “I just want to do good work. The spotlight makes me feel like I’m being watched and judged. Does my work only matter when it’s being recognized?”
They may be a classic Optimizer — someone who’s naturally driven to improve existing systems and solve problems. For them, the work itself is the reward. Getting things right, making processes better, solving inefficiencies. The gift card feels trivial. The public recognition feels performative.
What if they’re not the exception on your team?
Different Dimensions, Different Drives
When you understand how people are naturally motivated, you can see how these disconnects can happen.
An Achiever might think: “You’re putting a $20 price tag on excellence? That’s insulting to what I’m trying to accomplish here.”
A Relator may feel uncomfortable: “I was just helping the team succeed. Why are you singling me out when this was a group effort?”
Someone who’s a Driver might wonder: “Is this reward system a distraction that’s just going to slow us down and keep us from hitting our real goals?”
And that team member who is an Orchestrator? They might be thinking: “This recognition system has holes. How is this actually building our culture?”
Here’s the thing: these aren’t character flaws or ungrateful attitudes. These are natural motivational patterns that shape how each person engages with work at their core.
Recognition That Actually Energizes
Instead of asking, “How do we reward people better?” what if we got curious about what actually energizes each person based on their motivational wiring?
For your Achiever team members: Recognize and highlight their distinctive contributions that set them apart. They want to know their work made them stand out and raised the bar.
For your Driver colleagues: Acknowledge how they overcame obstacles and moved things forward. Celebrate their persistence and progress toward meaningful goals.
For your Influencer people: Give them an opportunity to share their success story and inspire others. Let them mentor someone or present their approach to the team.
For your Learner team members: Recognize their expertise and growth. Acknowledge what they discovered and give them a platform to teach others.
For your Optimizer folks: Give private feedback about specific improvements they made and problems they solved along the way. Focus on the tangible difference they made.
For your Orchestrator leaders: Recognize how they brought order out of chaos, built something sustainable, or successfully coordinated people and processes.
For your Relator team members: Acknowledge how they served others and strengthened the team. Highlight the collaborative spirit they bring.
For your Visionary contributors: Celebrate the creative solutions they designed and the possibilities they helped realize. Show how their vision became reality.
The recognition becomes the work itself. The reward is the opportunity to operate from their motivational sweet spot.
What If the Real Gift Is Understanding?
What if instead of some sort of standardized recognition program that quickly backfires, we leaned into personalized motivation?
What if we made the effort to understand that Learner who’s energized by opportunities to gain expertise and share knowledge? Or that Optimizer who comes alive when they can fix something that’s broken and improve what exists?
What if we recognized that the key to motivating our team members in the long-term comes from alignment — when how someone is recognized matches how they’re naturally motivated to contribute?
The $20 gift card isn’t the problem. The assumption that everyone values the same type of recognition is.
The Question That Changes Everything
Before you launch that reward system, maybe the question isn’t “How do we motivate our team?”
Finding out what influences a team’s motivation is crucial for engagement.
Maybe it’s “How is each person on our team naturally motivated?”
When you understand your team’s Motivation Code — how they’re uniquely wired to engage with their work and each other — you realize that the most powerful recognition isn’t a gift card or a generic shout-out.
It’s being truly seen and understood for who they are and what drives them.
And unlike that $20 gift card, that kind of recognition doesn’t diminish over time. It actually grows stronger.
What have you noticed about how different people on your team respond to recognition? I’d love to hear your experiences — the good, the awkward, and the surprising.
Want to discover what actually motivates your team? The Motivation Code assessment reveals the unique motivational patterns that drive each person. Learn more about bringing MCode to your organization.
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