Why Most Reward Systems Fail and What to Do About It

over $75,000 a year—big raises and annual bonuses won’t actually improve their productivity or performance. After that basic-needs line is crossed, employees want intrinsic rewards. They want to be in control of their own time (autonomy), they want to work on projects that interest them (curiosity/passion), and they want to work on projects that ma

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Contributors are most engaged when they can actually see how their work contributes to the company’s success. Quarter to quarter, day to day, they look for tangible measures of their achievement. Extrinsic rewards—the year-end bonus check—merely validate what they already know. OKRs speak to something more powerful, the intrinsic value of the work

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What advice would you give to help people start shifting their bonus system to something more along the lines of this?

company’s revenue and profit in the next two years; levels of satisfaction among your customers; ideas for new products; and evaluations of your coworkers. If you’re smart, you’ll probably try to sell your product, serve your customers, help your teammates, and, well, do good work. When metrics are varied, they’re harder to finagle. In addition, th

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