I spent three months designing a points-based reward system for my department. Employees earned credits for completing tasks early, helping colleagues, and hitting targets. The top performers each month got gift cards and recognition.

Within six weeks, collaboration died. People hoarded easy wins and avoided complex projects that didn't generate enough points. Two of my best workers stopped volunteering for challenging assignments because the reward-to-effort ratio made no sense.

The system created competition where I needed cooperation

I had turned work into a game with the wrong rules. Team members optimized for points rather than outcomes. The quarterly revenue numbers showed the damage clearly.

I scrapped the entire program and switched to quarterly one-on-one conversations about what each person wanted to learn or accomplish. Then I matched them with projects that fit those goals.

What changed after dropping the rewards

Engagement surveys improved within two quarters. People started choosing difficult projects again because they connected to personal development goals, not external prizes.

The expensive lesson: external motivators work for simple tasks with clear endpoints. For complex work requiring judgment and collaboration, they often backfire. Autonomy and relevant challenges drive sustained performance better than any points system I could design.

Now I ask what problems people want to solve rather than what rewards they want to earn. The shift saved our team dynamic and my budget.