Why Do Companies Let Untrained People Design the Incentives That Shape Everything?
By Bruce Bolger
Incentive and Recognition Program Design: No Experience Required
A Dearth of Respect for Verifiable Expertise or Impact Measurement
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Organizations spend billions of dollars trying to motivate performance, retain top talent, build customer loyalty, and align the behavior of distributors and
supply chain partners. Incentives and recognition sit at the center of all of it. They are among the most powerful tools a company has to shape human behavior. And yet, across industries, companies routinely entrust this responsibility to people with no formal training whatsoever.What makes this contradiction even more striking is that companies demand ROI discipline almost everywhere else. Finance must justify spending. Operations must prove efficiency. Marketing must measure conversion. Technology investments are scrutinized relentlessly. But when it comes to the systems designed to manage human behavior — the incentives that govern effort, loyalty, ethics, and trust — rigor suddenly disappears. The expectation becomes spend first, measure later, and hope for the best.
Programs are planned by people with no background in behavioral science. No grounding in psychology. No education in motivation, decision-making, or cognitive bias. No understanding of reinforcement theory or unintended consequences. Just well-intentioned people in marketing, human resources, procurement, or “rewards” roles making decisions that directly influence how employees work, how customers buy, and how partners behave.
Incentive and Recognition Program Design: No Experience Required
What makes this even more indefensible is that the expertise is not even sought after. There are training programs in enterprise engagement, recognition, and incentive program design. Companies could require vendors to disclose the credentials and capabilities of their program designers. IRR providers could publish the qualifications of the teams designing these systems. Clients could insist on basic statistical process controls and disciplined measurement standards to validate results. None of this is exotic. It is standard practice in any serious performance-driven discipline.
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The reason it hasn’t happened is simple: clients historically haven’t demanded it. Incentives and recognition have been treated as spend, not science. But that era may be ending. The demand for ROI in people management is growing, and companies are increasingly being forced to justify not only what they spend, but what behavior or results actually change.Maybe one of the reasons companies take the lack of expertise for granted is that most parents find themselves at one time or another devising incentive programs for their kids. This reasoning suggests that anyone can design an incentive program, when almost any parent who has tried this approach often comes up frustrated with the resuls.
The uncomfortable question remains: why do companies allow people with no demonstrated qualifications to meddle with the minds of their best employees, most valuable customers, and most critical distribution and supply chain partners? Because that is precisely what incentive design is. It is not administrative work. It is psychological influence. It teaches people what to pursue, what to ignore, what is safe to game, and what will be punished or rewarded, regardless of what the company claims its values to be. It says more about an organization's culture than almost any other initiative, given its potential impact on participants and their significant others.
Every incentive system is a form of behavioral architecture. Recognition programs, bonuses, point systems, tiered status, rebates, and awards are not decorative extras. They are instructions. They shape effort, ethics, loyalty, cooperation, and trust. They determine whether people act in the long-term interest of the organization or learn how to extract value from it. Treating that responsibility casually is not just naïve. It is reckless.
A Dearth of Respect for Verifiable Expertise or Impact Measurement
The irony is that this is a multi-billion-dollar industry with astonishingly little emphasis on expertise. There are roughly fifty serious incentive and recognition companies worldwide. Most of them emphasize awards, appreciation, platforms, and technology. Very few openly tout deep training in behavioral design or the practical results of their programs on bottom-line business objectives. Fewer still build their identity around qualified incentive or recognition architects. And clients, for their part, show little willingness to pay for that expertise even when it is available.
That is the quiet truth no one wants to confront. Companies will happily spend millions on rewards, catalogs, platforms, and fulfillment, yet hesitate to invest in the competence required to design those systems properly. The spend is approved. The thinking is optional.
Imagine the parallel in any other critical function. No organization would proudly admit that it lets someone without financial training manage accounting, or someone without engineering education design infrastructure, or someone without medical credentials make treatment decisions. Yet companies do exactly that when it comes to incentives and recognition, even though these systems directly govern behavior, culture, trust, and performance.
How did this become normal? Largely because incentives are still treated as expense items rather than strategic infrastructure. They are viewed as engagement tools, promotional tactics, or compliance mechanisms, not as governance systems that quietly dictate how people behave. As a result, the work is delegated downward, outsourced casually, and evaluated superficially. Leadership often does not understand the gravity of what is being designed in its name.
Worse still, the people designing these programs are frequently operating under the wrong incentives themselves. Success is measured by participation rates, redemptions, catalog usage, or the number of awards distributed, not by sustained behavior change, improved trust, or long-term performance. It is the equivalent of judging a medical treatment by how many pills were handed out rather than whether anyone got better.
The most damaging consequences of poor incentive design are also the hardest to see. Bad programs do not always fail loudly. They can quietly train top performers to feel manipulated or to manipulate, customers to feel commoditized or game the system, and partners to feel controlled or encourage them to cut corners. In other words, unless holistically designed, they can encourage gaming instead of commitment and compliance instead of trust. By the time leadership notices the damage, the culture has already shifted, and the relationships have already frayed.
So why does this persist? Because incentives live at the intersection of psychology and economics, yet companies treat them like merchandising. Because most IRR providers sell rewards, not rigor. Because clients resist paying for expertise they do not fully understand. And because the harm caused by bad incentive design often shows up months or years later, long after the program was declared a success.
The reality is unavoidable. Companies are not just spending money on incentives. They are shaping minds. They are creating behavior. And they are doing it largely without training, discipline, or accountability. That should concern anyone who believes performance, trust, and long-term value matter.
The opportunity is for the solution providers and their associations to focus more on ensuring the expertise of their program designers, being transparent about capabilities on their web sites, and by actively measuring the impact of client programs.
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