Individual rewards necessary

28 March 2012 19:05

(updated: 1 March 2016 19:08)

Individual rewards necessary

'Individual rewards are necessary because of considerations of fairness. If employees do not see a connection between effort and rewards, that could be harmful in terms of work motivation,' says Professor Nicolai J Foss.

Getting a whole organisation to pull in the same direction so that everyone is working towards the same goals is every manager's dream. It's a pity that the path to concentrating on one's own goals is very short. 

Equipped for cooperation

Professor Nicolai J Foss was recently awarded the Norwegian School of Economics' (NHH) publication bonus for his article 'Managing Joint Production Motivation: The Role of Goal Framing and Governance Mechanisms' , which is about how management can motivate employees to cooperate within an organisation. This bonus is awarded to NHH researchers who are published in top-ranking international journals.

In his article, Professor Foss studies the literature on cooperation and motivation theory, as well as social psychology.

'From an evolutionary perspective, there is much to indicate that people are motivated to work in teams and that we are cognitively equipped for cooperation. Utilising this natural motivation can be decisive if a company is to succeed,' says the NHH researcher.

That all employees are predisposed to work together should be good news for business executives. This natural motivation is fragile, however, and it can easily be supplanted by other motives.

Superficial message

'Research shows that if the management does not take steps to maintain the motivation for cooperation, it will shrink and eventually disappear completely. People have many different goals and they compete against each other,' explains Professor Foss.

'How should managers carry out this kind of maintenance?'
'Organisations have to influence their employees' cognitive processes. They have to be made aware of the role they play in the big picture. They have to see clear goals and purposes behind what they do.'

'Do you mean visions and so-called mission statements? Aren't they often very superficial?'
'Yes, they are often surprisingly trivial and non-motivational. They are not good enough to be able to mobilise the emotional energy needed to sustain the right motivation. There is a lot of wisdom in the statement "Men will work hard for money. They will work harder for other men. But men will work hardest of all when they are dedicated to a cause",' says Professor Foss, quoting the famous American pastor Harry Emerson Fosdick.

'Helping children to develop their creativity and learning skills through constructive play'. This is the mission statement of Danish toy manufacturer Lego.

'This is a good example of a mission statement with a greater meaning, and I think it helps the entire organisation to pull in the same direction. So-called hedonistic goals can also reduce the motivation to cooperate. They are about satisfying simple needs: improving one's self-esteem, seeking entertainment and avoiding unpleasant tasks and uncertainty. Some organisations try to stimulate employees' hedonistic orientation by things such as PlayStation and other attempts to create a fun working environment. We are very sceptical about this. Measures like that can do more harm than good,' the professor warns.


But providing motivation for cooperation is about more than just fine words and goals. Work rotation and individual and group-based reward systems are useful tools for creating a good cooperation environment. Many companies let their younger employees rotate between different jobs in the organisation, because they want to teach new employees how the organisation works.

'Our research indicates that it can also be very useful for senior employees to rotate between jobs, since it reduces group egotism. Of course, the problem is that experienced employees are also often key personnel, which makes it difficult to rotate these jobs. But this is definitely something that companies should experiment with,' says Professor Foss.

Balanced rewards

'It is difficult to measure individual effort in group contexts, and balancing rewards at the group and individual levels is certainly among the most difficult tasks a manager faces.'

At the same time, it is decisive in relation to achieving optimal motivation and behaviour. A lot of research indicates that the best approach is to mix the two types of motivation, but also that combining them correctly is challenging.

'Individual rewards are necessary because of considerations of fairness. If employees do not see a connection between effort and rewards, that could be harmful in terms of work motivation. But this has to be balanced against the fact that individual incentives can supplant the motivation for cooperation. It is important to link individual rewards to group goals, while at the same time keeping individual incentives at a modest level in the group context,' concludes Professor Foss.

Text: Espen Bolghaug