In Episode 109 of the Harmonious Workplaces podcast, organizational development consultant Rich Cruz and certified change management professional Ben Kleinman dive deep into a critical, often-overlooked aspect of stakeholder engagement: utilizing rewards and consequences to support change initiatives.
Driving organizational change is rarely easy, but implementing the right incentive structures can help you motivate your team and keep the “flywheel of change” from spinning out of control. Here are the key takeaways from the episode to help you successfully engage your stakeholders.
The “Multi-Legged Stool” of Stakeholder Engagement
Successfully securing stakeholder buy-in requires a multi-faceted approach. Kleinman describes stakeholder engagement as a “multi-legged stool”. The first two legs typically consist of communication and training. However, to truly reinforce organizational citizenship behaviors (OCBs) and minimize counterproductive work behaviors (CWBs), leaders must effectively leverage the third leg: rewards and consequences.
When employees are asked to support a transition, it is natural for them to wonder, “What’s my motivation?”. Addressing this question proactively is essential for guiding your team out of their old habits and into a new beginning.
Micro-Rewards: Big Impact on a Small Budget
A common misconception is that motivating employees during a change initiative requires massive financial bonuses or sweeping benefits overhauls. In reality, recognizing people in the moment can be incredibly powerful.
The hosts emphasize that micro-rewards and small gestures can go a very long way in making people feel appreciated. Some effective, low-cost ideas include:
- Handwritten thank-you notes.
- Small gifts, like a $10 coffee gift card.
- Public recognition in front of peers at the beginning of a meeting.
- Taking the team member out for a special lunch or dinner.
- Passing around a fun, treasured team icon—like a bobblehead of the boss—to celebrate the “win” of the week or month.
Aligning Incentives with Project Milestones
Rather than waiting until the very end of a project to distribute recognition, organizations can utilize “Management by Objectives” (MBOs) to dispense rewards incrementally.
In a traditional Project Management Institute (PMI) waterfall model, these micro-rewards can be tied to the completion of specific project phases or milestones. In an Agile framework, leaders can celebrate during key “epics” or whenever the team delivers a drop of value that is highly meaningful to the end-user. Even something as simple as enabling a highly requested button on a software interface can be a true celebratory moment for the project team.
Furthermore, aligning your Project Management Office (PMO) with the Association for Change Management Professionals (ACMP) standard allows you to track key performance indicators (KPIs)—such as readiness and adoption—and reward targeted strategic successes.
The Dark Side: Consequences and “Whipping the Horses Faster”
On the flip side of rewards are consequences. Kleinman jokingly references the classic, cynical workplace quotes: “Beatings will continue until morale improves” and “Whip the horses faster”.
When leaders simply layer on demands and attempt to squeeze as much juice out of their people as possible without providing additional time or resources, it ends poorly. While a strict command-and-control culture might work temporarily in high-reliability crisis situations, it is rarely sustainable and often leads to severe employee burnout and workplace loneliness.
From an industrial-organizational psychology standpoint, ignoring poor behavior is detrimental, but overly harsh consequences simply create resistance. To correct counterproductive work behaviors without ruining morale, consequences must be handled with care.
The Crucial Role of Procedural and Distributive Justice
A major pitfall in applying rewards and consequences is a lack of perceived fairness. Cruz highlights two critical concepts from Human Resources that must be maintained:
- Procedural Justice: Ensuring that punishments or rewards are distributed in the right way, at the right time, and in a consistent manner.
- Distributive Justice: Ensuring an equitable distribution across the board, so that expectations apply to everyone equally.
When standards are applied inconsistently—such as letting a high-performer or senior employee get away with poor behavior while punishing others—it rapidly erodes trust, morale, and performance across the organization.
Building Trust Through Co-Creation
The ultimate key to making rewards and consequences work is co-creating goals with your team.
Instead of simply handing down top-down mandates, leaders should work with individuals to set specific, measurable, and time-bound goals that align with their distinct skills and readiness levels. This mutual agreement forms a “psychological contract,” ensuring that employees feel invested in the outcomes and view the system as fair. If circumstances on the ground change, both parties must be able to safely renegotiate these expectations together rather than having new metrics forced upon them midstream.
By combining transparent consequences with timely, meaningful micro-rewards, you can build a highly motivated team ready to tackle any project. As the hosts remind us at the end of every episode: Make change your friend.
For help with your upcoming change initiative, check out our Change Execution & Adoption Services.
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