It all starts with status
In general, higher status is assigned to individuals who are perceived as virtuous. In other words, status is socially given by others and allows an individual to be admired by their peers. In the workplace, status confers such benefits as the ability to influence others (which could help employees in terms of career advancement).
The problem with material incentives
Research by Feng Bai and others suggests that, while acting morally usually helps people increase their status, it doesn’t do so when that behavior is perceived as incentivized. This is because such behavior is perceived to be motivated more by expectation of reward and less by the authentic desire to be helpful or act selflessly. In other words, when generosity, benevolence, and helpfulness are perceived as the result of incentives, people are not given extra status for such behavior because they are perceived as being inauthentic.
What implications does this have for you as a leader?
First, you should engage in ‘authentic’ moral behaviors in the workplace, such as helping others and exhibiting generosity, because this will help to increase your status – but you should not do so when it might appear that your behavior is motivated by incentives.
What implication does it have for your organization?
The same goes for your team. While it is good to formally encourage others to engage in moral behaviors, it is better not to incentivize this through formal incentives. Instead, make sure to give ample recognition to those who behave ‘morally’ by publicly highlighting or verbally acknowledging it in performance reviews and through other means of encouragement that do not consist of tangible rewards.