The Reward Trap: Science Shows Carrots and Sticks Actually Demotivate Us

We are in a persistent struggle to motivate ourselves and those around us. For generations, we’ve relied on a simple formula: reward the behavior you want, and you’ll get more of it. This idea is the foundation of our society’s motivational operating system—call it Motivation 2.0. Its core code is that the way to improve performance is to reward the good and punish the bad. We operate on the assumption that if you dangle the right carrot, you can get anyone to move.

But what if this operating system is fundamentally flawed? For decades, behavioral science has been uncovering a profound gap between what science knows and what business does. This gap was first hinted at in a series of puzzling experiments that defied the conventional laws of behavior. In the 1940s, Harry Harlow observed that monkeys would solve mechanical puzzles with focus and determination, not for food or any other external reward, but for the sheer intrinsic satisfaction of it. Puzzlingly, when he introduced a food reward, their performance was disrupted. Two decades later, Edward Deci found a similar effect in humans using the Soma puzzle; rewarding participants with money actually made them less interested in the activity later.

These were the first signs that the Motivation 2.0 operating system was buggy and incompatible with human nature. They hinted at a powerful “third drive” that goes beyond our biological needs and our response to external rewards. This post will distill the most impactful takeaways from this research into three key truths that diagnose this failing system and present its necessary upgrade.

1. The Surprising Downside of Rewards: Less Performance, Not More.

The central, counter-intuitive finding from decades of research is that contingent “if-then” rewards—if you do this, then you’ll get that—don’t just fail to motivate, they often actively worsen performance for many types of tasks.

Edward Deci’s Soma puzzle experiments offer a clear demonstration. Deci created two groups. One was never paid. The other was paid for one session but not before or after. The result was stunning: the group that received money subsequently lost all interest in the puzzles, playing with them far less than the group that was never paid at all. The reward didn’t motivate; it extinguished their natural curiosity.

Deci’s conclusion was a direct challenge to conventional wisdom:

“When money is used as an external reward for some activity, the subjects lose intrinsic interest for the activity.”

This effect isn’t limited to interest; it also sabotages creative problem-solving. In the classic “candle problem,” participants must attach a candle to a wall using only the candle, a book of matches, and a box of tacks. The solution requires overcoming “functional fixedness” by seeing the tack box not just as a container but as a potential platform. When researchers offered a cash prize for the fastest solution, the incentivized group took, on average, nearly three and a half minutes longer to solve the problem. The reward narrowed their mental focus, blinding them to creative possibilities.

These findings reveal a critical bug in the Motivation 2.0 operating system: it is fundamentally incompatible with creative, non-algorithmic work, which is precisely the kind of work defining the 21st-century economy.

2. The Perverse Effect of Carrots and Sticks: More Unethical Behavior, Less Goodness.

The damage from extrinsic motivators extends beyond performance and creativity; it can also corrode our character and encourage unethical behavior.

A famous study of daycare centers in Israel illustrates this perfectly. To discourage parents from arriving late to pick up their children, the centers introduced a fine. But the result was the opposite of what they intended: late pickups increased. The fine transformed what was once a moral and social obligation (being considerate to the teachers) into a simple market transaction (paying for extra time). The external punishment crowded out the intrinsic desire to do the right thing.

This is a symptom of a deep design flaw. Motivation 2.0’s reliance on external motivators can short-circuit our moral and ethical wiring, replacing intrinsic good will with a transactional, corner-cutting mindset. We see the consequences in a string of corporate scandals: Sears imposing sales quotas on its auto repair staff, leading to overcharging and unnecessary repairs; Enron setting lofty revenue goals, fueling the fraud that led to its collapse; and Ford rushing the Pinto to market to meet price and weight targets, knowing it had omitted crucial safety checks. When the reward is the only destination that matters, people will inevitably take the low road to get there.

As Drive author Daniel H. Pink writes, “Rewards can perform a weird sort of behavioral alchemy: They can transform an interesting task into a drudge. They can turn play into work.”

Conversely, when the reward is the activity itself—the satisfaction of learning, the pride in doing one’s best, the joy of helping a customer—shortcuts become pointless. The only person you would be cheating is yourself.

3. The Solution: Upgrade to Motivation 3.0.

If the old “operating system” of carrots and sticks is failing us, what’s the upgrade? The answer lies in fostering our “third drive”—our innate and powerful need to direct our own lives, to learn and create new things, and to contribute to something larger than ourselves. This is Motivation 3.0.

This leads to a new framework for thinking about behavior. Type X behavior concerns itself less with the inherent satisfaction of an activity and more with the external rewards to which that activity leads. Type I behavior, in contrast, concerns itself less with the external rewards and more with the inherent satisfaction of the activity itself. While Type X behavior is a product of Motivation 2.0, Type I behavior is our natural state and the engine of Motivation 3.0. This superior performance is powered by three key elements:

• Autonomy: Our desire to be self-directed and in control of our own lives. This translates to having freedom over our tasks (what we do), our time (when we do it), our technique (how we do it), and our team (who we work with).
• Mastery: Our urge to get better and better at something that matters. This is the drive that pushes us to practice, persist through challenges, and achieve the deeply satisfying state of “flow,” where we are fully immersed in an activity.
• Purpose: Our yearning to do what we do in the service of something larger than ourselves. This connects our individual efforts to a greater cause, providing context and meaning to our work.

To unleash this powerful drive, we need to rethink the very nature of management, which is often just a civilized word for control.

“Perhaps it’s time to toss the very word ‘management’ into the linguistic ash heap alongside ‘icebox’ and ‘horseless carriage.’ This era doesn’t call for better management. It calls for a renaissance of self-direction.”

Conclusion: A Question to Ponder

For too long, our workplaces, schools, and even homes have operated on an outdated and dangerous assumption about human motivation. The mismatch between the old “carrot and stick” model of Motivation 2.0 and the scientific truth of our “third drive” is holding us back.

The path to high performance and deep, lasting satisfaction—for individuals and organizations alike—is not through bigger bonuses or more elaborate incentive schemes. It lies in creating environments that honor our innate, Type I desires. We thrive when we are in control of our lives, when we are making progress in something that matters, and when we are connected to a purpose larger than ourselves.

This is not a utopian ideal; it is a practical and scientifically-grounded blueprint for a more effective and more human way to live and work. As you reflect on this, consider one final question: What is one small step you could take this week to bring more autonomy, mastery, or purpose into your work and life?