Relationships between supervisors and workers, too, can collapse under the weight of incentives. If a supervisor wields sanctions, of course, employees will be about as glad to see that person coming as they would be to glimpse a police car in their rear-view mirror. But even if the supervisor is a rewarder, the effect is essentially the same. Incentive-driven employees will not ask for help when they need it. Instead, they will conceal problems to appear infinitely competent, or they will resort to flattery.
Rewards ignore reasons.
To solve productivity problems, executives must understand the causes. Each situation calls for a different response. Rewards deter risk-taking. When people are offered incentives, they are less inclined to take risks, explore possibilities, play hunches or attend to anything whose relevance to the problem at hand is not immediately evident. In a word, the No. 1 casualty of rewards is creativity.