When Leaders Withdraw an Existing Reward

When economic trends look dark, good leaders consider cost savings to prepare for tighter times. 

Eliminating any unnecessary expenditure receives the first attention. No cost is left unexamined when leaders begin to tighten the belt to prepare for lean times. Sometimes, leaders decide it is best to pare back or eliminate a reward or benefit team members enjoy to reduce expenses. 

They are rarely prepared for the reaction. 

Leaders who decide they must withdraw an activity, privilege, or benefit team members value are swimming in shark-infested waters. They are often eaten alive by team members who respond with surprise, shock, and anger. All seemingly out of proportion to the cutback. 

When leaders eliminate an existing reward, team members believe they are stealing something from them that is rightfully theirs. They feel burglarized by the decision and act as if their personal rights have been violated. They wonder how else they will be penalized by the capricious choices of decision-makers. 

This outsized reaction reflects a fact of human psychology. Namely, abolishing an existing reward is always viewed as a punishment much more severe than not receiving a reward in the first place. 

Changes in retirement benefits, sick leave policies, travel reimbursements, or (fill in the blank) all receive the same treatment. Even eliminating free bottled water can produce a visceral reaction akin to murder. 

A timely word of caution. 

Many leaders presume that changes in flexible working hours, where team members have enjoyed the benefits of working from home, are immune to this reaction. After all, the team is simply returning to pre-pandemic, in-office hours. How can anyone expect anything different?

The fact that the world has changed is not the issue. The idea of leaders retreating on a workplace policy that has greatly benefitted team members will likely be seen as a huge negative. An oversized reaction is to be expected. 

Leaders must be thoughtful when they believe withdrawing a reward is the right decision. They should do so only when it is absolutely necessary. They then need to be prepared to make their case and endure the reaction. 

Leadership is hard for many reasons. Some reactions are not perfectly rational. Withdrawing an existing reward makes everyone a little bit crazy.