Writing blog posts that make sweeping claims for all time are like the story of the patent clerk who said that “everything had been invented.” Still, Alfie Kohn’s 1993 article for Harvard Business Review may be the most important and yet almost completely ignored idea in business.

It’s getting harder to find copies of publications online that are nearly twenty years old. Here’s one link to Kohn’s piece, Why Incentive Plans Cannot Work, which opens with this unbelievable paragraph [emphasis added]:

It is difficult to overstate the extent to which most managers and the people who advise them believe in the redemptive power of rewards. Certainly, the vast majority of U.S. corporations use some sort of program intended to motivate employees by tying compensation to one index of performance or another. But more striking is the rarely examined belief that people will do a better job if they have been promised some sort of incentive. This assumption and the practices associated with it are pervasive, but a growing collection of evidence supports an opposing view. According to numerous studies in laboratories, workplaces, classrooms, and other settings, rewards typically undermine the very processes they are intended to enhance. The findings suggest that the failure of any given incentive program is due less to a glitch in that program than to the inadequacy of the psychological assumptions that ground all such plans.

It’s not surprising that this idea hasn’t taken hold. Just about every aspect of popular communication about work tries to connect getting more stuff with getting more stuff done. However, researchers have known for decades that rewards simply do not work. In fact, trying to give people bonuses or compensation for their efforts often has the opposite effect.

Here at Slaughter Development, we’ve been talking about the relationship between incentives and productivity for years. Back in July of 2010, we published Workplace Productivity and Motivation, which includes a mesmerizing video on the topic. A few months earlier, we covered the fascinating comparison of two different research funding models in Incentives to Innovate. The year before, we even praised local businessman Michael Reynolds regarding his thoughts on the ROWE model. Plus, we’ve taken on the Fox Network and their claims that rewards increase productivity.

You should read Kohn’s full article for more information. If you only remember one thing, though, remember this:

Rewards do not motivate employees, they actually undermine employee motivation.

Instead, the best way to motivate employees is to empower them through respect and freedom.

We’re pretty confident that this little blog post isn’t going to kill millions of commission-driven sales plans, but we have to put out the word. Stop rewarding employees. Try respecting them instead.

Let us know how it goes for you.

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Tags: aflie kohn, bonus, bonus structure, bonuses, commission, compensation, harvard business review, incentive, incentive plans, motivation, productivity, salary