Variable Rewards Change the Management Game
What a tub of ice cream can teach us about harnessing the power of random rewards in management.
I recently had a conversation with a friend about their Ben & Jerry’s Addiction over — yup, you guessed it, a tub of Ben & Jerry’s.
It was one of their finer specimens with chunks of Tony’s Chocolonely AND salted caramel pieces. My friend complained that it’s the only dessert he’s incapable of not finishing in one sitting. Once he’s opened the tub, there’s no stopping him.
As I found myself fishing around for chunks of chocolatey goodness, it hit me: this is the slot machine of ice creams.
You devour a mouthful and you get a delicious chocolatey crunch, then another mouthful and you get… nothing?! Just ice cream. You take another mouthful in search of a chunky chocolate or caramel piece and so it goes on until the bottom of the tub stares you in the face. Talk about random rewards.
The Power of Random
Random or “intermittent variable rewards” are most commonly referred to in the context of slot machines or social media, where we madly push buttons again and again not because a reward is guaranteed, but because there’s a chance it might be coming.
The phenomenon exists in humans and animals. Oliver Burkeman shares an observational study from animal trainer Karen Pryor, noting that “a dolphin rewarded with a fishy treat every six jumps will soon become lackadaisical about the five in-between ones; reward it at random, however, and it’ll jump vigorously, never knowing which jump will bring fish.”
Behavioural psychologist B.F. Skinner researched what happens if we play to this trait by giving rewards at “variable ratio schedules” once a behaviour is established.
In practice, this means giving the reward only some of the times someone does the expected behaviour, not every time. What he found was that, like the dolphins, people stick to the behaviour for longer and are more committed if they are not certain a reward is coming.
Specifically: rewards delivered on a variable ratio (rather than every time) resulted in the most instances of the behaviour versus any other schedule and they also persisted over time even after the random rewards were no longer being given.
In Burkeman’s words: “if slot machines delivered £1 every time you inserted 50p, you might use them, but you’d never get addicted.”
How does it affect us day-to-day?
We all know the power of rewards in habit formation — dog training is a great example of this, and humans aren’t much different.
James Clear’s famous 4-step habit loop illustrates the role of the reward in forming a habit: first, a cue triggers a craving. The craving makes you want a reward. You respond to get that reward and the reward satisfies your craving.
Perhaps you see your reading chair (cue) and you start to crave coffee. That’s because you know if you sit down to read, you’ll get to enjoy your morning coffee (reward). You read your book and enjoy your coffee afterwards (craving satisfied).
Applied to a case of random rewards, the habit loop looks a little different to a morning ritual.
Imagine you check your email multiple times a day. You idly stare at your screen looking for something to distract you from the task at hand. You spot a red number one by your email app and it triggers the urge to check the message. What will it be? You respond to satisfy the urge of checking it, hoping for a reward. Except… it’s spam. Feeling empty, you wait for another email and repeat the cycle, hoping for a more satisfying outcome.
Sound familiar? Random rewards govern a significant amount of the actions we undertake day-to-day.
Whilst this is often associated with addiction, it also teaches us that we don’t need to be consistently rewarded in order to form a habit. In fact, according to Skinner, if we’re not consistently rewarded, we will maintain the habit for longer. The problem is, it’s hard to randomise the reward yourself.
Variable Rewards at Work
HR departments have long experimented with the psychology of variable rewards. The typical example is a variable bonus — the uncertainty of the final amount creates a “higher high” than when your regular monthly salary hits your account.
A more original example I’ve seen well-executed is where employees can be given a gift tailored to their personal interests at any time for going above and beyond.
You don’t know when it’s coming, or what it will be. But seeing others in the office receiving their gifts only enhances the craving. When will it be my turn? And what will it be?
What if there’s more to variable rewards than financial incentives? Can the concept offer managers fresh perspective day-to-day?
An action that’s praised as an example of “exceeding expectations” the first time we do it becomes expected after a few repetitions — that’s how we level up. What starts as going beyond our role remit gets us promoted, and becomes core to our new role.
As managers, it’s easy to praise the first time around and then accept this new levelling up as status quo, replacing praise with expectation.
Susan Weinschenk Ph.D. explains that in addition to praising consistently at the beginning when a new behaviour is being established, we would do well to mirror the concept of variable rewards and continue to praise now-and-then long after the behaviour has become a core part of the individual’s role. Why? These intermittent rewards sustain behaviour.
Variable Rewards in Action
Imagine your team member has worked up to independently writing monthly status reports for the wider organisation over the past year. In the beginning, you praised and critiqued their work closely. Once they built the muscle, you hung up your boxing gloves and moved on to other tasks.
A few months go by and you see the quality of the reports waning. You sigh and reluctantly intervene, providing direct feedback. Yet the following months, the quality suffers more, and your team members no longer seems to enjoy writing them. They are struggling to find the motivation to sustain the habit.
Instead, imagine that every couple of months, you offered a verbal ‘reward’. “I loved this month’s update, by the way. For part 2, we could add a bit more colour on that project next month, don’t you think?” — the ultimate reward here is engagement, more than praise or criticism. It says “I trust you to do this independently, but I still care”.
It’s tempting for managers to go one of two ways, continuing to actively engage long after the team member can do the task independently (this borders on micromanagement) or opting to ‘set and forget’, walking away once expectations are established.
Instead, a variable level of engagement is enough to sustain the team member’s motivation, ensuring they strive for the reward of recognition every month they write the status update.
We can use the idea of variable rewards in the workplace to remind ourselves to praise or engage constructively now and then, even when all is under control.
For team members, it’s the difference between working somewhere where they feel valued, versus where demotivation starts to creep in.
Let’s flip the script on the fish-hungry dolphins and the social media dopamine hits — variable rewards aren’t all bad. Everyone loves a bit of recognition now and again, especially in the form of Ben & Jerry’s.
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