After two decades as a manager, I thought I had heard every shade of argument employed by staff to explain why they deserve a promotion or, for the unambitious, why their performance exceeds expectations. This thinking took a tumble recently when I spoke with a leader in a financial services firm who was seeking guidance on how to deal with an employee who felt their annual bonus "didn't reflect the effort they had put into their work". As someone who has spent a lifetime in study and a decade in the performing arts, if there is one truth it is that few people care how hard you had to work. As a result, effort alone will seldom merit a bonus or promotion opportunity. Often, it doesn't even merit a word of thanks.
While the value of hard work should never be underestimated, the rise of the growth mindset has unintentionally encouraged a misstep—overemphasising effort at the expense of outcomes. This means that managers have to grapple with whether, and how, to reward effort without undermining excellence or productivity.
The Origins of Effort-Based Reward Systems
Those who recall Max Weber's (1864–1920) book The Protestant Ethic and the Spirit of Capitalism (1905), will also have front of mind that 'time is money'. Setting aside the religious notion of work being a 'calling' in which labour is seen as a form of devotion to God, and we still have the secular tenet that diligence, systematic organisation, and the single-minded pursuit of a goal leads inexorably to efficiency and success. When this is measured in employment terms it should equal a higher salary, bigger bonus, or promotion opportunity. This narrative, however, overlooks the complexities of modern organisations, where effort without results can drain resources and frustrate actual high performers.
A second strand to the bow of rewarding effort came, unintentionally, through the work of psychologist Carol Dweck and her research on fixed and growth mindsets. To boil her extensive and complex research down to a golden sentence would be to say: we are in error if we attribute success solely to innate ability. Instead, Dweck's research encouraged people to view skills as malleable and underscored the importance of praising effort as a key strategy for fostering resilience and learning. These findings were transformative in education, and remain essential in organisational behaviour because it is important that employees see capabilities as something that can always be enhanced. An approach that can lead to career long learning to improve existing capabilities and to develop new ones. In an effort to reinforce growth mindsets in organisations, managers, marketers, and social media influencers have increasingly extolled the importance of grit and grind. However, this has led to a praise culture which has been seized upon by those of a GenMe mindset. Where a decade ago someone might attend a single graduation ceremony after three-plus years of study at a tertiary institution, now every participant at a half-day workshop gets a certificate and is encourage to post it to LinkedIn. This has taken the inevitable next step from the already problematic approach of rewarding effort to awarding attendance, a process that brings several ethical implications.
The Ethical Implications of Rewarding Effort
Rewarding effort raises fundamental ethical questions about fairness and justice in organisational settings. According to J. Stacey Adams' equity theory , employees determine fairness by comparing their contributions and rewards to those of their peers. When rewards disproportionately favour effort without considering outcomes, perceptions of inequity can arise. High-performing employees, whose results may surpass their peers', are particularly prone to dissatisfaction and disengagement if their achievements are undervalued in favour of mere persistence.
Beyond fairness, overemphasising effort risks fostering inefficiency. Rewarding employees who spend excessive time on tasks, regardless of results, can inadvertently penalise those who work more efficiently. This creates a paradox where inefficiency is encouraged, undermining the organisation's overall productivity. By valuing time spent over value delivered, organisations may incentivise behaviours that conflict with their operational goals.
The consequences of such an approach extend beyond organisational performance to employee well-being. Rewarding effort without consideration of its impact can lead to overwork and burnout, as employees feel compelled to demonstrate constant effort to gain recognition. This aligns with findings that have identified burnout as a critical occupational hazard. Organisations must therefore balance their reward systems to ensure fairness, efficiency, and the sustainability of employee well-being.
The Operational Risks of Rewarding Effort
Rewarding effort without clear ties to performance outcomes can undermine organisational effectiveness. According to Victor Vroom's (1932–2023) expectancy theory, employees are motivated to exert effort when they believe it will lead to meaningful and desirable outcomes. When rewards are detached from results, this motivational link is weakened, leading to decreased effort and disengagement. Employees may begin to question the value of their contributions if effort alone, regardless of impact, is enough to secure recognition.
Such practices can also cultivate a culture of entitlement, where employees expect rewards simply for trying. This participation trophy mindset runs counter to meritocratic principles that prioritise achievement and innovation. Organisations that overemphasise effort risk eroding the competitive drive essential for growth, as employees may lose the incentive to strive for excellence. This shift undermines organisational cultures that value and reward results-driven contributions.
The broader organisational repercussions extend to employee engagement and morale. Research highlights that perceptions of fairness in reward systems are crucial for maintaining employee trust and commitment. A system that disproportionately values effort over outcomes may be perceived as unjust, alienating high performers and fostering resentment. Organisations must therefore design reward structures that uphold principles of merit and fairness, ensuring that effort is recognised as a component, not a substitute, of meaningful contributions.
Balancing Effort and Excellence: Navigating Complexities and Consequences
The challenge in organisational reward systems is not in dismissing effort but in appropriately contextualising it. Effort is most impactful when it serves as a precursor to skill development and achievement. Research underscores the importance of framing effort as a necessary but insufficient condition for success, ensuring that it contributes meaningfully to personal and organisational goals. However, overvaluing effort risks distorting its role, potentially creating inefficiencies and undermining excellence.
In team settings, the complexities of rewarding effort become even more pronounced. Indiscriminate recognition of individual effort can exacerbate social loafing — the tendency for individuals to reduce their contributions in group tasks. When team members perceive that effort, rather than outcomes, is rewarded, collective accountability may diminish, stifling collaboration and reducing the overall effectiveness of the group. A balanced approach that celebrates effort as part of a journey toward excellence, while prioritising collective achievements, is critical for fostering productive teamwork.
Additionally, the psychological consequences of overemphasising effort can be profound. Self-determination theory highlights the importance of intrinsic motivation in sustaining high performance. When effort is excessively rewarded, employees may shift their focus to external validation, diminishing their intrinsic drive. This misalignment can also lead to maladaptive persistence, as individuals invest time and resources into unproductive tasks. Organisations must therefore strike a careful balance, promoting effort as a stepping stone to achievement while encouraging reflective practices that help employees discern when persistence is productive and when adaptation is necessary.
Redefining Reward Systems in Organisations
Rewarding effort is not inherently problematic, as the seminal work of Carol Dweck has shown in helping to create a growth mindset; its value lies in how it is framed and operationalised. By grounding reward systems in principles of fairness, transparency, and outcome alignment, managers can foster a culture that motivates employees while preserving organisational performance.
As the anecdote that opened this article illustrates, the expectation of rewards for effort alone is symptomatic of broader societal and organisational trends. By addressing these pitfalls thoughtfully, managers can not only avoid the ethical and operational challenges associated with effort-based rewards but also create environments where both effort and excellence thrive.
Some Actionable Insights for Managers:
- Design Comprehensive Reward Systems: Integrate effort-based recognition into a holistic framework that prioritises results and aligns with organisational values.
- Encourage Growth-Orientated Feedback: Use feedback mechanisms to reinforce the connection between effort and skill development, avoiding excessive reliance on extrinsic rewards.
- Balance Individual and Collective Recognition: Ensure that rewards reflect both individual contributions and team outcomes, fostering collaboration without compromising accountability.
By reframing how effort is valued and rewarded, organisations can move toward practices that inspire meaningful contributions, elevate performance, and sustain ethical integrity.
Good night, and good luck.
