Dec 26, 2011

Santa Claus Effect

Rewards may be effective in motivating the neighborhood kids to find your missing dog, but when it comes to motivating your employees, they fail miserably. In fact, most traditional reward and recognition programs lead to an overall decrease in employee morale and productivity, with “Employee of the Month” programs serving as the poster child of bad ideas.  There are at least 20 reasons why such programs fail, based on 40 years of research.  

The Santa Claus Effect. Ever notice how kids shape right up when they are reminded that Santa is coming to town and only gives toys to good boys and girls, while bad children get coal in their stocking? This is just another one of those “dangling carrot” programs that lead to temporary changes in behavior.
Programs fail because they are programs. Diets only work as long as you’re on them. After the carrot is given, behavior returns to baseline. If the carrot is not given, the behavior actually dips below baseline. You’ll notice how less effective dangling the Santa carrot routine is the day after Christmas.

Now imagine this: Only the very best kids get a present; every other kid gets stuck holding an empty stocking. In truth, lots of these kids tried really hard, but in the less than magical place called the workplace, effort doesn’t necessarily count. You win or you don’t. And, guess what? As your programs continue to reward only your top performers, you end up demotivating your average performers who do put forth extra effort but don’t get recognized.

Santa’s approach is different. He’s created a culture where employees want to perform their best every day. Why? Because he’s got a very clear and inspiring mission and vision that his workforce can get behind. His team members value the work that they do and see how it supports the goals of the organization. Not only do they respect the work that they do, they also respect Santa and their fellow team members, and they feel respected. His elves aren’t being driven by some motivational program.

So, for the New Year, put your reward and recognition programs on the shelf and focus on creating a culture where your team members respect the work that they do and feel respected. By the way, Santa doesn’t only pay attention to his star players. If you really want to make a difference in your organization this year, find the overlooked Rudolph's with great potential and help them to shine.



  1. I never looked at Santa's workshop quite like that... I always saw it as a place where he forced an indigenous people to accept his terms and because of a 'social acclimatization', they live under those conditions, much the way that the 1% expects the other 99% to live...

  2. interesting...explains a lot of the issues we are dealing with at the current jobsite.


  3. It always seemed to me the employee of the month type was the one who sucked up the most, talked too much, and did little actual work. In other words, it was all about personality.

  4. Some wise stuff here. The carrot mentality is very hard to over come.

    Being honest, our business, or corporate world tend to be dinosaurs. Some are looking at Google though, I am sure some say, well if we were well-heeled we could do that. NOt seeing GETTING THERE.

    I likethis stuff, some times, when I read someting like this, I want to get back in business, but then I get the elbow in the side!!!

    The best to you!!!!!

  5. I agree with this. 'Reward programs' come and go. Real motivation is achieved by appreciating employees on a day-to-day basis and not just sharing the vision/mission but making them a part of it. Too few employers recognize this.

  6. This was a great post. I saw the employee of the month cause great bitterness and drama at a workplace once. Everyone worked hard every day, so why is one person being celebrated. Having Core Values and taking pride in carrying those out is motivating enough for many people.


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