Why delayed rewards can be harmful

Study proves that instant rewards increases intrinsic motivation in the workplace

Rewards are a powerful way to keep people motivated at work. It helps them to perform better and maintain a level of productivity. HR and businesses are always looking for new ways to keep the motivation level of employees high. That is why it is important to understand how different rewards impact employees’ motivation levels. The study ‘It’s About Time: Earlier Rewards Increase Intrinsic Motivation,’ conducted by Kaitlin Woolley, Assistant Professor, Cornell University, and her team proves that instant or immediate rewards increase intrinsic motivation in employees compared to delayed rewards.

What are delayed rewards?

Let’s understand delayed rewards with an example. For instance, an individual goes to buy a car. He wants a blue SUV with decent features that also fits his budget. But when he visits the showroom, the car he wants is unavailable. The dealer shows him a premium model, a red SUV, but the individual refuses to buy it. Instead, he books the car he wants, which will be delivered in 40 days. This is how delayed rewards work, where there is resistance to the temptation of immediate pleasure in the hope of obtaining a valuable and long-lasting reward in the long term. 

At the workplace, high-performing employees get their reward during the appraisal cycle instead of an instant or immediate reward. Perhaps this system worked in earlier times. In fact, many studies in the 1980s and 90s evaluated human behavior and found that people had this habit of saving something special for the future. But now the preferences of people have changed. The current generation is all about here and now and seeks instant gratification. Do you know the best part? The above study has stated that employees are more motivated to perform better when they are rewarded instantly. 

What are immediate/instant rewards?

Instant rewards are those that materialize during the pursuit of an activity or work and make up the experience of pursuing the activity as well. In a corporate setup, when an employee achieves a target or completes small milestones, he/she gets rewarded for the same instantly. Today’s HR tech has made this possible. Digital employee engagement platforms enable an organization to drive instant gratification in employees. Such platforms have capabilities where employees and managers can reward each other instantaneously. For instance, if an employee leads a project to its success in the given time, its manager can send him a note of appreciation digitally. Such platforms also allow you to send digital coins, which can be redeemed on various categories of products on the platform itself. 

Disadvantages of delayed rewards

Today, when businesses are tracking their performance every quarter and setting targets every three months, why should we reward people for that success at the end of the year? Businesses have realized the same. One company in the insurance sector introduced an anytime appraisal policy, where the frontline sales team received their incentive reward right after achieving their targets. After putting in the effort today and achieving the target, people lose the excitement about receiving the reward later in time. 

Motivation reduces

The motivation to carry out work and achieve targets at work is directly related to the reward the employee receives. If the reward is delayed or there is no reward for the employee, the motivation level gradually falls. Woolley’s study states that when employees receive instant rewards, the motivation level increases by 35%, whereas when an employee receives a higher raise, the motivation level only increases by 19%. 


Delayed rewards involve uncertainty. The business environment is volatile, and circumstances can change drastically, just like what happened during COVID-19 times. The pandemic struck, and suddenly, people were working remotely, and due to negative speculations, many companies decided to cut salaries and keep incentives on hold. So, where employees expected a pay raise, they did not receive it. This can lead to frustration and further disengagement in employees. 

Unwanted attrition

No company wants to lose its best performer, so implementing an instant rewards strategy can prevent frustration and reduce attrition levels.

Stress and employee wellbeing

Monetary-based rewards directly impact the financial stability of an employee. Long-term incentives like an annual bonus or salary raise lead to expectations in employees. They start making plans on how they will use their extra income. If they fail to receive the incentive due to unforeseeable reasons, employees might feel mental stress hampering their productivity. 

The times have changed. Companies must move on to new-age processes and methods to drive engagement in a multi-generational workforce. Organizations should seek digital solutions to enhance instant and peer-to-peer recognition for an engaged workforce.