Rewarding Effort Over Results

Published December 12, 2018

A prominent behavioral economist – one of the horde of people who make a living telling companies how to run their business – is proposing that maybe it’s better to reward employees for effort rather than results. The rationale is that sometimes luck is involved in results, and since luck is something employees can’t control, it’s not fair to assess them on results. Freed from the pressure of being judged on results, employees will perform better – leading to better results!

The guy promoting this is a past Nobel Prize winner and not the only one who supports this theory, so who am I to argue? But put yourself in the position of a business owner. What do you want from your employees – effort or results? Ideally you want both, but effort is simply the means to the end. Results are the end. We all know the role luck can play. But over the long haul, the person who consistently achieves good results is probably doing it because of more than just good luck, and the person who under-performs is probably not just unlucky.

Proponents of the effort-over-results theory say employers reward employees based on results simply because it’s easier. I say the fact that it’s easier is a good thing, given that most managers don’t know how to manage people to begin with (keeping behavioral psychologists in business). If it’s results you want, why the need to coddle employees to get there?

It’s like the idea that no idea is a bad idea, which is supposed to free people from fear of being criticized. It’s how they coach Little League baseball today. “Good try, Billy!” when he lets a ball go through his legs. When I played it would have been, “Harrison, get your head out of your ass!”

Protecting fragile egos from criticism or the inevitable unfairness of life may have its merits. But to me, it’s just more Corporate Crap.