Your Influence Is Never Neutral

Who decided what your organization rewards?

Parts of it have obvious authors. The compensation plan was written by someone. The dashboard was specified by someone with a reason. The quarterly review template came from somewhere. What those parts add up to, though, the standing instruction your organization issues to every person in it about what is worth doing, has no author at all. It accumulated. The result resembles a house that six owners have added onto in turn, none of whom saw the others’ plans, all of whom were solving something real at the time.

A measure was added three years ago to solve a real problem. A bonus was attached, because attaching a bonus seemed like the way to make it matter. A report was built so leadership could watch it, and from that moment it began shaping behavior nobody specified. Then the original problem went away and the measure stayed.

Consider what an accumulation like that says out loud. Sales is paid on bookings. Support is timed on ticket closure. Engineering reports on velocity. Everyone has been told the organization values long-term customer relationships. Each of those measures is defensible on its own, and any competent executive could justify every one of them in a sentence.

Now watch all four speak at once, when a customer calls with a problem that will take real work to solve properly. Sales has booked it and is looking at next quarter. Support is being timed, so the fastest path is a plausible answer and a closed ticket. Engineering is counting shipped work, and a deep fix is expensive and invisible. The account team absorbs the consequence in eleven months, when the renewal comes up and the customer remembers.

The structure is issuing four instructions. None of them is the stated value, and the people caught between them have already worked out which ones carry consequences.

When a leader sees the result, the reach is almost always for something missing. The team needs clearer goals, or better training, or more accountability, or a stronger sense of ownership. So another measure gets added, or another bonus, or an initiative with a name. That reading is the expensive one, because it locates the fault in the only people in the building who are behaving rationally.

This is what I mean when I say a leader’s influence is never neutral. It is not mainly a matter of tone or temperament. It is encoded in the architecture: what gets measured, what gets published, what gets rewarded, and what costs a person something to do. That architecture is producing behavior at scale right now, whether or not anyone chose what it produces, which makes it a design problem. Design is either done with intention or it happens carelessly by default.

The objection, and the answer to it

More than one business owner has pushed back on this, and the pushback runs roughly as follows.

A leader’s job is not to manage anyone’s psychology. Adults are responsible for themselves. They should show up, do good work, and keep their own attitude in order, regardless of what leadership does or how the organization around them is built. Treating people as things to be shaped is condescending at best, and at worst it is a polite word for manipulation.

That position comes from a strong respect for personal responsibility, which is a good value to hold, and I would rather work with someone who holds it than someone who does not.

The objection rests on an assumption that does not survive contact with an actual organization: that abstention is on the menu, that a leader who declines to shape behavior has thereby left it unshaped. That option does not exist. Your organization is answering continuously, and in public, what happens to the person who raises a problem, admits a mistake, or says the uncomfortable thing while the room is still quiet. Those answers are being issued. The only question is whether anyone wrote them.

The manipulation charge still has to be answered rather than waved off, and there is a clean answer.

Edward Deci and Richard Ryan drew the line in the right place. Any external event, a reward included, carries two aspects at once. Its controlling aspect pressures a person toward a behavior somebody else selected and moves their sense of why they are acting from inside themselves to outside. Its informational aspect tells them something true about what the work requires and how they are doing. The same event can be experienced either way, and which one dominates determines whether a person’s intrinsic motivation gets displaced or supported.

Manipulation is the controlling case, narrowing a person to a behavior chosen for them. Designing deliberately is the informational case. People are already drawing conclusions about what this organization values, from whatever evidence is available to them. Building the system on purpose is what makes those conclusions true.

The research supports a narrow claim rather than the sweeping one in circulation. The strongest meta-analysis, by Deci, Koestner, and Ryan, found that expected rewards tied to clearing a bar reduce how much people keep doing the activity once the reward stops, while unexpected rewards have essentially no such effect and verbal recognition tends to increase motivation. Alfie Kohn popularized the far stronger claim that rewards are simply corrosive, which reaches past the research he draws on. What a consequence is attached to, and how it is framed, matter more than whether consequences exist.

What I mean by incentives

The word usually gets read too narrowly, so it is worth being exact.

When I talk about incentives I am not talking about bonuses and raises. Those are one small and unusually visible subset. I mean every form of behavioral reinforcement operating in an organization, intrinsic and extrinsic alike: what is measured and how, what is published and to whom, how work is routed and who gets assigned to what, how performance is reviewed, what triggers escalation, which results generate a response from leadership and which are absorbed in silence. Most of it was never labeled an incentive by anyone. All of it functions as one.

This is also how a leader’s influence reaches people. You are not primarily influencing anyone in the moment you speak. You are influencing them through the incentive structure your decisions leave behind, which goes on operating in every room you are not in and every week you are not thinking about it.

Edgar Schein’s account of how leaders transmit culture makes this concrete. Among the mechanisms he identifies as primary are what leaders systematically pay attention to, measure, and control, and separately, how leaders allocate rewards and status. Neither requires a compensation plan or a policy. A company with no bonus structure at all still runs both of them every week.

There is a reason architecture carries this much leverage. Behavior appears when a person sees a goal as achievable, as worth it to them, and as something they had some say in choosing. Remove any one of those three and the behavior stops showing up, no matter how often it is asked for. Structure sets all three. It decides what is realistically reachable, what it will be worth once you get there, and how much of the route was handed to you rather than chosen. That is why exhortation accomplishes so little and why design accomplishes so much.

Incentives of this kind run from the formal to the nearly invisible, and the informal end shows how little machinery any of this requires. A leader sighs before answering a question. Nothing is said that could be quoted back, and the leader has forgotten it before lunch, but the three people in the room now know what it costs to ask. If a sigh can install a rule, a dashboard can install a hundred, and the dashboard runs every day without getting tired.

An unmanaged architecture tends to fail in a particular direction. Visible work gets recognized and invisible work does not, and prevention is nearly always invisible: the person who ships something has produced an event, while the person who noticed the flaw six weeks earlier and designed around it has produced a non-event, and a non-event cannot be thanked. The same arithmetic governs bad news, where the cost of raising a problem lands immediately on the person raising it and the benefit is diffuse, delayed, and usually credited elsewhere. Neither pattern requires a policy. Both require only that nobody interfere.

Measurement is instruction

One mechanism accounts for a great deal of the instruction nobody meant to issue.

The moment a number is measured and published inside an organization, the people it describes draw a reasonable inference. The number is visible to the people who decide things about them, so it will inform what happens to them. They are not being paranoid when they think that. They are being accurate. Numbers that leadership tracks and displays do feed into decisions about compensation, promotion, staffing, and who survives a reduction, and everyone in the building knows it.

So the number becomes currency, and people accumulate it, because a rational person accumulates whatever the people above them are counting. No bonus is attached, no policy is written, and often nobody at the top intends to create any pressure at all. “We are only tracking it” describes something that cannot be done. Publishing a measure is an act of influence, and careless publication is one of the most ordinary ways an organization ends up instructing behavior nobody selected.

This is expectancy reasoning in its plainest form. People act on the perceived link between what they produce and what happens to them, and visibility to decision-makers establishes that link without anyone promising anything. Donald Campbell warned that the more an indicator carries high-stakes decisions, the more it corrupts the process it was meant to track. The anticipation of stakes does that work before any stakes are attached.

It is also why adding a measure to fix a behavior problem so often makes things worse, as the four contradicting measures at the start of this piece do. There is a formal result behind that. Bengt Holmström and Paul Milgrom showed that when a job spans several tasks and only some can be measured, attaching rewards to the measurable ones pulls effort away from the rest, so the optimal strength of that reward is lower than intuition suggests and can be zero. Holmström put it plainly in his Nobel lecture, saying that inside firms high-powered incentives can be badly dysfunctional and that it is often best to avoid them and sometimes to use no pay-for-performance at all. Ian Larkin found enterprise software salespeople timing deals to exploit the shape of their commission schedule, conceding price to do it, at a cost to the vendor of six to eight percent of revenue. That is not a morale problem and it is not a character problem. Those salespeople were reading their commission schedule correctly and acting on what it actually said.

The popular version of the too-many-metrics argument overreaches, so I should add one caution. There is no good evidence that the sheer number of measures is what does the damage. A company can run many measures well. What produces the failure is measures that distort, and measures that instruct different people to want different things.

Which means the work is frequently subtraction, and subtraction is the hard part. People experience the removal of a reward as a theft, and they experience it that way even when the reward was harming them. Someone who spent three years organizing their work around a commission structure has a mortgage calibrated to it and a reputation built on being good at it. Telling them the structure was poorly designed does not undo any of that. It tells them the thing they were good at has been reclassified as a mistake.

So I work under a rule I do not bend. I never remove an incentive without balancing it. Either its value is folded into base pay, so nobody is out anything, or it is replaced by a group-level incentive tied to an outcome rather than an activity. An activity measure asks one person for a behavior they can produce alone, which means they can also produce it in ways nobody wanted. An outcome held at the group level asks for something no individual can move alone or fake alone. What changes is the shape of the ask, not what anyone takes home.

The thing that is worse than saying nothing

Most leaders would not recognize the next failure as one, because on the surface it looks like its opposite.

A number gets celebrated. It goes on the monthly slide, it is read out, the team that produced it is named. Nothing attaches to it, in money or in standing. This repeats for a year, and then another year.

The intuition is that a number with nothing riding on it is harmless. The opposite is true, and the longer the record runs the more it costs, because a sustained public celebration of value produced and paid with nothing does not read as neutral to the people producing it. Their reading is accurate. They are being shown, month after month, a measurement of what they generate alongside an answer about where it goes. The monthly celebration becomes a standing reminder that the house always wins.

Alvin Gouldner held the obligation to return benefit to those who provided it to be close to universal as a moral expectation, and J. Stacy Adams described what follows when it is violated: people weigh what they put in against what comes back, and perceived under-reward creates pressure to restore the balance by reducing inputs or by leaving. What I have watched is more specific than disengagement from the metric. People disengage from the relationship. They keep hitting the number and stop volunteering anything past it, they ration the discretionary effort nobody was compensating anyway, and they replace a working assumption of good faith with a quiet running tally.

Even the harmless-looking version is not harmless. If the celebrated number reflects nothing real, the celebration still teaches that leadership responds to the appearance of results, and some people will act on that.

No arrangement lets an organization spotlight a number indefinitely and pay it with nothing.

The way out is a design change, but the argument for it arrives from reciprocity rather than from incentive logic, and that distinction is worth keeping straight. A genuine shared stake in the whole outcome, profit sharing being the most common form, settles structurally what no statement of values can settle rhetorically: whether the organization’s success and the individual’s success point at the same thing. The usual argument for it is wrong, though. It is not a productivity lever, since at any real company size one person’s effort barely moves total profit, and pitching it that way invites the free-rider and line-of-sight objections, both correct on their own terms. The case for it is reciprocity, reduced conflict of interest, and the fact that it is the one form of upside nobody can game alone. The productivity evidence, for what it is worth, shows consistent but modest positive associations across the meta-analytic work, with causality unresolved, and I would rather say that plainly than oversell it.

I want to be precise about one more thing, because a careful reader will look for the hole. Removing extrinsic rewards means removing behavior-contingent bonuses, forced rankings, and punishments. It does not mean touching pay. Compensation is a fairness floor rather than a motivational instrument, and paying people well and predictably is a precondition for everything above, not an alternative to it.

How this gets found

None of it is visible from an org chart, so the work is observational before it is analytical.

I start with the architecture: every measure the organization keeps, who it is applied to, what is riding on it formally, and what people believe is riding on it, which is frequently a different answer and the more important one. Then I interview people at several levels separately, because the gap between how something is described upstairs and how it is experienced downstairs is usually where the answer lives, and it never appears when those people are in the same room. Then I sit in on real working sessions, because what a team does when a decision is genuinely contested tells you more than any account of it will. A group under real disagreement reveals its actual priority order in about ten minutes.

The question underneath all of it is simple and almost never asked out loud. For each thing this organization rewards, formally or otherwise, what is the fastest way for a rational person to produce it, and is that the same as doing the work well? Where those two answers separate, you have found something, and the distance between them is the size of the problem.

What this buys, and why it is hard to do alone

Change the evidence and behavior arrives without being requested. Problems surface earlier because surfacing them is survivable. Prevention gets done because prevention is seen. Expertise compounds because the people holding it are not spending it on self-protection. Adaptability and intelligence stop being qualities you demand from individuals and become properties of the organization, which is the only version that survives anyone’s departure. That is what a healthy culture is. It is the output, not the input.

There is one structural difficulty in the way, and it is the reason I do this work rather than only write about it.

A forensic reading of an organization starts with a question that sounds procedural and is not: who produced this information, and what did producing it cost them? Turn that question on yourself and the difficulty becomes visible.

You cannot observe your own system from inside it. Everyone in your organization has spent years learning what your architecture rewards and what it punishes, and they have adjusted accordingly. You are the only person who has never experienced that architecture as a subject of it. Every report you receive, every number you review, and every conversation you have has already passed through people who adapted to the thing you would be trying to examine. The evidence available to you has been filtered by the very system you would be evaluating.

That is not a failure of self-awareness, and more self-awareness will not correct it. It is a structural blind spot, and it is the one problem in this piece that you cannot solve by deciding to.

References

1. Schein, E. H. (2010). Organizational Culture and Leadership, 4th ed. Jossey-Bass.
2. Deci, E. L., and Ryan, R. M. (1980). “The Empirical Exploration of Intrinsic Motivational Processes.,” In L. Berkowitz (Ed.), Advances in Experimental Social Psychology, Vol. 13. Academic Press.
3. Deci, E. L., Koestner, R., and Ryan, R. M. (1999). “A Meta-Analytic Review of Experiments Examining the Effects of Extrinsic Rewards on Intrinsic Motivation.,” Psychological Bulletin, 125(6), 627 to 668.
4. Kohn, A. (1993). Punished by Rewards. Houghton Mifflin.
5. Vroom, V. H. (1964). Work and Motivation. Wiley.
6. Campbell, D. T. (1979). “Assessing the Impact of Planned Social Change.,” Evaluation and Program Planning, 2(1), 67 to 90.
7. Holmström, B., and Milgrom, P. (1991). “Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design.,” Journal of Law, Economics, and Organization, 7, 24 to 52.
8. Holmström, B. (2017). “Pay for Performance and Beyond.,” American Economic Review, 107(7), 1753 to 1777.
9. Larkin, I. (2014). “The Cost of High-Powered Incentives: Employee Gaming in Enterprise Software Sales.,” Journal of Labor Economics, 32(2), 199 to 227.
10. Gouldner, A. W. (1960). “The Norm of Reciprocity: A Preliminary Statement.,” American Sociological Review, 25(2), 161 to 178.
11. Adams, J. S. (1965). “Inequity in Social Exchange.,” In L. Berkowitz (Ed.), Advances in Experimental Social Psychology, Vol. 2. Academic Press.
12. Doucouliagos, H., Laroche, P., Kruse, D. L., and Stanley, T. D. (2020). “Is Profit Sharing Productive? A Meta-Regression Analysis.,” British Journal of Industrial Relations, 58(2), 364 to 395.