EY seems to think so.
A few years ago I was asked to speak at a Rewards and Remuneration conference in New Zealand. They wanted me to talk about how rewards and remuneration could increase employee engagement.
I said, “Sorry, I’m probably not the right person for your conference.”
There was a long silence on the other end of the phone. Then one word: “Why?”
“Because I believe the best way to engage and retain your staff lies outside the compensation and benefits area.”
They called me back and asked me to speak anyway, which was generous of them.
I’ve been thinking about that phone call again this week, because EY has just announced it is spending $100 million on exactly the thing I told that conference wouldn’t work.
The firm is rewarding its US employees for demonstrating human skills. Business acumen. Judgment. Adaptability. Spot awards of up to $500, and up to $25,000 for individuals and teams whose work makes a material difference. Ginnie Carlier Carlier, EY Americas Chief Talent and Culture Officer, framed it simply when she said how the firm rewards its people defines what it values.
She’s right about that. And I want to be fair to EY here, because there is something genuinely good buried in this announcement. But there’s also a question underneath it that I don’t think enough leaders are asking.
Have we really reached the point where we have to pay people to think?
What we knew in 2014, and what we forgot
When I wrote my book, Mind Reading for Managers, I spent a whole chapter on what actually motivates people, and the research was already clear then.
There have been a number of experiments, some of them sponsored by the Federal Reserve Bank of New York , looking at how money affects performance. What they found is that paying more for better performance works well when the work is algorithmic. That means the employee follows fixed rules, and speed and accuracy are what matter most. Industrial Age work, essentially.
But the moment creativity, judgment and innovation become the point, money starts to lose its grip. And it gets stranger than that. In some of those experiments, people offered large performance bonuses did worse than people offered small ones.
Not because they cared less. Because they cared too much. Big money raises the stakes, raising the stakes raises the pressure, and past a certain point the pressure interferes with the exact thinking you were trying to buy. It’s choking under pressure, applied to a spreadsheet instead of a free throw.
There’s a second finding that matters just as much, and it’s the one almost everyone skips over.
Researchers Deci, Koestner and Ryan pulled together 128 experiments on this in 1999. Performance-contingent rewards reduced people’s intrinsic motivation. But positive feedback increased it, and by a larger margin than the cash reduced it.
Read that twice, because it’s the whole argument. Being told, specifically and credibly, that your thinking was good makes you want to think well again. Being paid a large announced sum contingent on thinking well makes you tense, and slightly worse at it.
So why am I not writing EY off?
Because EY hasn’t made one decision here. It’s made two, and they point in opposite directions.
The $500 spot award is small, it comes after the fact, and mostly it arrives unexpectedly. Someone notices good judgment and marks it. That is recognition wearing a cash costume, and recognition is the thing the research supports.
The $25,000 award, announced in advance as something you can aim at, is a large expected performance-contingent reward attached to cognitive work. That’s the structure with the evidence against it.
My honest read is that the small awards will do more good than the headline number, and the headline number is what everyone else will copy.
The night someone called me a force of nature
I should tell you that I have been on the receiving end of this.
Years ago, before I started Ignite Global, I was a recruiter. I was good at it. My clients respected me, my candidates liked me, and I sat comfortably near the top of the regional league table most months. But I never pushed for the top spot. As long as I was beating last month and last year, that felt like enough.
I had just started a new division from scratch, with no real goal for the year beyond putting a respectable number on the board.
One night I was at dinner with my team and our regional manager, Dave. Sometime between the main course and dessert, he leaned in and said quietly, “You are a force of nature. I really think you could build this division to be number one in the region for the year.”
I thought he was mad. I would be competing against recruiters with bigger markets, far longer tenure, and client bases they had spent several years building. On paper it was ridiculous.
The very large glass trophy that says I was the top recruiter in the region for that division is sitting on the bookcase in my home office as I write this.
Nobody paid me to work harder that year. Dave gave me a challenge and a single sentence over dessert, and it cost him nothing.
I want to be clear about what actually happened there, because it would be easy to read that as a nice story about encouragement. It wasn’t. Dave knew that a challenge would land with me where a bonus wouldn’t. He knew that because he had bothered to work out how I was wired.
That’s the part no incentive scheme can do for you. A bonus pool is a broadcast. What moved me was one manager who had paid enough attention to know which lever to pull, and then pulled it at the right moment.
Years later I built a whole framework around that idea and called it the Underlying Motivators Conversation. But at the time it was just Dave, at a dinner table, getting it right.
What I’d ask you to look at instead
If you’re reading the EY announcement and wondering whether to do something similar in your own organization, I’d start somewhere else entirely.
Ask yourself what happens here to someone who slows a project down because something didn’t look right. If the honest answer is that it costs them time, credibility or goodwill, then no bonus pool will fix it. You’ll just be paying people to do the thing you’re quietly punishing them for.
Ask yourself when you last told someone specifically that their thinking was good. Not their output. Their thinking. If you can’t remember, that’s the cheapest and highest-return thing available to you this week, and the research says it works better than the money.
And ask yourself whether you’re measuring whether people are using AI, or whether they understand it. Most dashboards count seats and logins, which tells you about compliance. What you actually need to know is whether your people understand the tool well enough to catch it when it’s confidently wrong, because it will be, and it will be at four o’clock on a Friday.
I don’t think EY has made a mistake. Putting human capability into the reward system rather than burying it in a training budget nobody reads is a real step, and it takes some courage to say out loud.
But the answer to the question I started with is no. We don’t have to pay people to think. We have to build organizations where thinking is safe, noticed, and worth the trouble.
If your best people needed a $25,000 incentive to exercise judgment this year, the incentive wasn’t what was missing.
So let me ask you what I’d ask a room: what does it cost someone in your organization, right now, to say “I don’t think that’s right”?
If you’re leading an organization through this: the question I’d start with isn’t about money. It’s what your people truly want and whether your managers are delivering that.
If you’re planning a conference or leadership program: this is one of the conversations I have on stage, alongside live AI demonstrations to help with these conversations built for the room in front of me.
Either way contact me. I’d love to chat
