Align Incentives with Your Principles—Don’t Let Compensation Wreck Culture

Even the best-stated principles can be derailed by misaligned incentives. When organizations reward short-term wins—quarterly sales, yearly awards—people learn to optimize for those, even if it undercuts longer-term goals or teamwork. Compensation and praise send clear signals about what behaviors matter most.

Top-performing groups audit their rewards: is cash king, or does long-term stock matter more? Do departments fight over recognition, or do teams share in success? Amazon famously paid senior leaders with below-industry-base salaries but substantial long-term equity, aligning their fortunes with the company’s performance. That meant leaders focused on building lasting value, not just hitting arbitrary performance targets for a payout.

A student council might discover every reward goes to individual event wins. By switching to recognize sustained community service, they see more lasting change—because now that’s what gets attention. Behavioral economics tells us people respond most to what is visibly rewarded, not what is ideally hoped for on a value statement.

If your culture is at odds with your incentives, revise what you recognize—and watch attitudes (and results) shift.

Go through your list of all the ways people are rewarded—money, shout-outs, perks—and ask which behaviors those actually reinforce over time. Find the biggest places where short-term thinking creeps in, like quarterly targets or limited-time competitions, and ask your group how changes could better reward steady contributions or collaboration. Pick at least one reward, plaque, or pay element to modify so the payoff matches your highest values. Do this intentionally, and you’ll see the conversation change—and a stronger, more future-focused team emerge.