The Science Behind Rewards & Incentives - Why Do They Work?

At some point in our lives, perhaps even very recently, rewards have persuaded us to do something above and beyond that which we would normally undertake in the workplace... but how? We take a look at the brain functions, psychological theories and studies that have led to what we know about the science behind employee rewards.

The Brain’s Reaction To Reward

A recent study in Nature showed a new understanding of how cerebellar granule cells (the smallest, most plentiful - about 60bn - neuron types found in the brain). They contribute to motor function, language, fear and attention. The study found that these neurons were activated in mice carrying out a task where they had to push a lever to get sugar water. Neurons in our brains fire when we anticipate a reward, others when the reward is given and another group of neurons react differently when the reward is omitted (i.e. the poor mouse doesn’t get any sugar water even though he pushed that lever!). Therefore, the brain has very precise and strong reactions to rewards, not getting rewards, and indeed, even the thought of reward.

The Primary Functions of Rewards

The three primary functions of rewards are their capacity to:

  1. Produce associative learning (i.e., classical conditioning and operant reinforcement);
  2. Affect decision-making and induce approach behavior (via the assignment of motivational salience to rewarding stimuli);
  3. Elicit positive emotions, particularly pleasure

Rewards As Reinforcers

Not all rewards are reinforcers, “A reward can be defined as reinforcer only if its delivery increases the probability of a behavior” . There are differing levels of reward. The most basic and primal is a reward that is necessary for the survival of the species (water, food, procreation and the like). The second tier is (arguably) things like money or beautiful music. This second tier is often referred to as extrinsic motivators/rewards and differ from intrinsic rewards because they arise from outside the individual. You are getting your positive reinforcement from somewhere else

"Extrinsic motivation refers to our tendency to perform activities for known external rewards, whether they be tangible (e.g., money) or psychological (e.g., praise) in nature."(Brown, Psychology of Motivation, 2007)

Does Extrinsic Motivation Always Work?

In a word, no. In an experiment by Lepper, Greene, & Nisbett (1973), children were given lots of big rewards for drawing with felt-tip pens, an activity which they probably would have chosen to do on their own during playtime anyway. When the children were later offered the chance to play with the pens during playtime, the kids who had been rewarded for using them previously showed little interest in playing with the pens again. The children who had not been rewarded, however, continued to play with the pens.

Extrinsic motivators are best applied when the person has little or no interest in the activity in the first place. Otherwise, the activity that was previously enjoyable almost becomes a task once that external reward is associated with it. This is called the ‘overjustification effect’ and is the catch-22 of rewards!

"The overjustification effect imposes a limitation on operant conditioning and its effectiveness in applied settings. It tells us that we need to be careful in our use of operant conditioning so that we do not undermine intrinsic motivation. It also tells us that we must consider the possible cognitive consequences of using extrinsic reinforcement." (Griggs, Psychology: A Concise Introduction, 2010)

The Psychology of Employee Rewards

Understanding how employee rewards can help create a more productive, happier and engaged workforce has been the subject of many studies and experiments. One theory that is often applied is Maslow’s Hierarchy of Needs. This is the pyramid of tiers of the types of needs that humans have. The base tier includes the needs we require to survive - food, water, air, sleep. Next come the safety needs - shelter, employment, healthcare. It follows, therefore, that companies who are offering incentives, salaries and career progression are tapping into the safety needs of its employees.

The Myth of Happiness = Productivity

Even companies with the most lavish offices, free childcare facilities, flexible work hours and onsite gym can experience low productivity. These perks, whilst they do appeal to employees within the Maslow Hierarchy, do not reinforce particular behaviours that contribute to improved performance for the company. They are nice to have, and will set you apart from competitive employers, but when it comes to output, they do not often correlate with performance.


As a business leader, it is the understanding of your employees’ psychological desires and their motivating forces that will determine the success of any employee rewards system you put in place. Do get in touch with Ovation Incentives today to find out how we would look to help you achieve the performance you want, with rewards that get results.

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