Incentives Can Be Negative


Incentives, who wouldn’t want those? A new project for the company, a new product they need to push, or a small job that can bring in the big one for the team. It’s a company’s way to help get the juices flowing in their employees to win. The problem is incentives in the workplace can be a double-edged sword. There is no denying that they are an effective way to motivate employees and drive productivity. But the ugly side of it, they can also create negative effects if they are not implemented or managed properly.

When you, the employee, achieve a certain metric or accomplish a specific goal, the incentive comes into play. This is management’s way of saying that they thank you for increasing their business, appreciate your work, and hope you continue to do more. In psychology, it’s called positive reinforcement.


Although the motive is clear– we gain, so you gain too; incentives can have a negative side.

✅ Incentives can create a short-term focus among employees, where they are more concerned with meeting the requirements to earn the reward than with achieving long-term goals or working towards the overall success of the company.

✅ There can be times when employees cut corners or engage in unethical behavior to earn a reward.

✅ Most incentives are individually targeted, and it can create a competitive environment where employees are more focused on individual achievement than on working as a team.

✅ How about those who just can’t hit the targets? Incentives can lead to employee disengagement if they feel that they cannot earn the reward or that the reward is not worth the effort required. This can lead to demotivation.


What else can your management try, then? Incentives can be like fresh meat thrown in a pool of sharks; they sometimes end up biting each other. So there are other ways your management can show their gratitude.

Instead of offering a tangible reward, recognize and reward employees for their efforts and contributions to the company. Creating a workplace culture where employees feel that their work is meaningful and that they are making a difference can be more motivating than incentives. Offering employees opportunities for professional development and career growth can be a powerful motivator.

One other practical approach we have seen in some companies is the hidden incentive, where employees get incentives that were not announced.


The most important part? Your Leadership should create a culture of employee engagement. This will make your employees proud of their jobs, and they will put in the work for the sake of the work itself. Sounds promising, but it’s a complex change in your company culture that needs to be researched, identified, and tested even before steps to implementation are attempted. Employee engagement is part of the core of our Culture Change programs. It’s time you learned how we do it. Please email us at