One of the more frustrating experiences for leaders occurs when a team member becomes so fixated on financial incentives that they interpret everything through the prism of compensation.
These team members have an unusual obsession with financial rewards that makes them difficult to satisfy. We use the pejorative term “coin-operated” to describe those team members who resist performing any task or playing any role that doesn’t come with a paycheck.
These team members don’t outright refuse most uncompensated team activities, such as completing performance reviews for colleagues or serving on enterprise working groups. But they strongly believe even good citizenship should come with a financial reward.
They typically make it very well known that they are not paid fairly for what they do, and consistently ask for increases in compensation, especially as their job or role expands in any way.
Not surprisingly, these team members soon earn the reputation of being self-interested and narcissistic.
While financial security concerns and pressure away from the workplace can produce an overfocus on compensation, coin-operated team members are usually conditioned to act this way.
They are commonly taught by parents, role models, and prior leaders to place an extreme value on financial achievement. The lesson they learn, sometimes very early on, is to view nearly all workplace activities through a cost-benefit lens.
While it’s easy to know how to motivate them, leaders commonly find the experience of managing them exhausting, as they never let up on their demand to receive more.
Paying them for higher performance seems like a good idea, but it often increases the volume and persistence of their dissatisfaction. They can become highly argumentative over the smallest financial issue or payout.
Interestingly, the research shows that increases in financial incentives do not typically improve performance.
In fact, sometimes they can make it worse.
While larger financial incentives can be very effective at getting people to show up, take on a task, or persist at routine work, they have little effect on performance quality.
Ironically, an unhealthy fixation on rewards can distract a team member or create anxiety and pressure that undermines their performance.
Traditional economic thinking assumes that if a leader pays people more, they’ll perform better. Research in psychology and behavioral economics has shown this is true only for simple, repetitive, or mechanical tasks.
But for tasks that require creativity, judgment, problem-solving, and complex thinking, that influence doesn’t hold up.
For most roles and assignments, once compensation is perceived to be fair and sufficient, increasing financial incentives produces little benefit. That’s because most people are motivated by more than financial outcomes.
Research confirms that performance improves most when compensation is fair, the performer is given the autonomy over how the work is done, and they believe in a higher purpose that makes it matter. Adding timely feedback further strengthens performance.
Of course, coin-operated team members seldom believe compensation is fair. Paying them more only gets them off a leader’s back for a few weeks or months and isn’t likely to have much effect on their contribution. So the question for leaders is how to manage them.
Naturally, leaders must weigh their approach against the many specific facts that surround the team member, including how talented they are, how unpopular they have become, and how annoying their dissatisfaction is.
But at some point, many coin-operated team members wear out their welcome. Their lack of collaborative spirit, committed citizenship, and intrinsic motivation for excellence often costs them the respect of their peers.
This disrespect typically undermines the quality of the team interaction. If that occurs, it’s time for them to go.
