Reward Systems LO13794

Shun Chou (
Thu, 22 May 1997 16:01:21 -0900 (PDT)

Replying to LO13647 --

[Host's Note: This msg of 22 May was delayed due to an error on my part.

You wrote:

>The reward sytems are important because they have so much impact on
>behaviour. You could rely on intrincic motivation if that was the reward
>system. However, since this is unlikely you have another reward system.
>THis then drives much of our behaviour. We kid ourselves if we think this
>is not so.

>Measuring things is difficult. Most reward systems don't reward
>performance explicitly, in the sense that most people get paid whatever
>they do. So I don't see that learning necessarily needs to be measured any
>more accurately just anknowledged as a part of the 'job'

I agree with you that reward systems have a great impact on behaviour.
But that isn't the problem. The problem is that focussing on extrinsic
motivation, when your employees are already intrinsically motivated,
destroys the intrinsic motivation (Lepper & Greene, 1978). The learning
organization is supposed to create a sphere of committment and openness
(Mills & Friesen, 1992). This you can achieve by creating a "learning"
culture, a flexible structure and encouraging systemthinking. Under these
circumstances, I think there will be a lot of intrinsic motivation in the
organization. So you shouldn't use extrinsic rewards to maintain the
learning organization, because extrinsic motivation would only substitute
intrinsic motivation. (Besides that the question remains, whether a
learning organization can exist without intrinsic motivation.)

But what if you want to create a learning organization? You claim that
extrinsic rewards can serve as a "driving force", creating motivation
where there was none. This statement however is grounded upon what
industrial psychologists call the "reinforcement based" approach towards
motivation. This approach assumes that all people under all circumstances
are susceptible to this kind of reinforcement. The human mind is reduced
to a black box. Modern contingency theory however suggests that you take
the different circumstances of every case into consideration. So shouldn't
the decision to change the reward system only be taken after analysing the
relevant contingency factors? (e.g. peope, industrial relations, kind of
learning you want to achieve)

As for the need to measure learning. Like I claimed before, one of the
main characteristics of the learning organization is "openness". This also
means that information about the allocation of rewards should be available
to everyone in the organization. If you can't measure "learning"
objectively than you have to deal with dissatisfied employees, who think
they have been treated unfairly. Subjectivity in combination with variable
pay schemes is "deadly" for the learning climate. I quote (Armstrong, 1996
p.24): "Variable pay schemes are effective only if they are based on
objective measurements and they can only fulfill their potential if the
measurements are clearly related to the key drivers of organisational

yours sincerely,

Shun Chou

All comments are welcome.


Shun Chou <>

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