The Pros and Cons of Gamification in the Workplace

Gamification is a hot topic these days: 70% of Forbes Global 2000 companies are using gamified platforms. The hope is that by making work fun, employees will be more engaged, productivity will increase, and turnover will decrease. 

Getting the notification, “You just earned the best bonus for the marketing team!” is pretty thrilling—but is it enough to make an impact on employee engagement and motivation? 

Let’s walk through some definitions first, then we’ll cover the pros and cons of gamification in the workplace.

What is gamification?

Like the word implies, gamification is the act of making an environment, process, or task more like… well, a game! Think of a sales leaderboard with the month’s top performing team members, or even an “[x] number of days since the last [unwanted event]!” poster up in the employee break room. 

Here are a few examples of gamification you may see in the workplace:

• Badges 🏅
• Levels 🆙
• Points and scores 💎
• Leaderboards and rankings 📊
• Achievements 🏆

Many people are naturally competitive with their colleagues for a variety of social and monetary reasons. For example, I’ve bonded with my coworkers through playful bickering about our trivia champion standings, and these peer relationships also influence my level of engagement at work. 

“Some research studies suggest such competition can motivate employees, make them put in more effort, and achieve results. Indeed, competition increases physiological and psychological activation, which prepares body and mind for increased effort and enables higher performance.”
–Anna Steinhage, Dan Cable, and Duncan Wardley, Harvard Business Review

Pro: Gamification drives results through an if-then feedback loop 

Psychology shows that positive reinforcement works! 

“Positive feedback triggers a reward signal in the brain, reinforcing the action that caused it, and making it more likely to be repeated in the future.”
–Tali Sharot, Harvard Business Review

Whether it’s achievement badges or social recognition, people are more likely to repeat actions that have positive outcomes. That’s why gamification can be a great motivator for many positions in the workplace. 

Con: Gamification can have a negative impact on creativity and problem-solving

☝ That feedback loop, while rewarding, can also be overly simplistic. 

There is a robust body of research showing that “if-then” gamification inhibits creativity and diminishes problem-solving abilities. It works great for straightforward tasks, like ensuring employees complete their mandatory training, but once you start assigning if-then gamification to complex tasks, that’s where this feedback loop stops being beneficial. 

If there’s a single, straightforward path to reward, people will take that path. But what about those who want to take the path less traveled? 😉 

Or, what about projects that require creativity, strategy, and innovation?

In this feedback loop, you’d be inadvertently penalizing employees for iterating and looking for new solutions, especially if their experimentation doesn’t take them directly or immediately to the results you’re looking for. 

Luckily, gamification doesn’t necessarily need to be an if-then situation. We use Bonusly to recognize colleagues that live our core values, meaning that there’s not a single path to success, but many!  

Pro: Gamification is a low-cost way to motivate employees

When a company can’t spare the funds to reward employees with gifts or cash, many teams rely on peoples’ innate competitiveness and desire for social influence to drive results. 

A little friendly competition never hurts, and can often re-energize bored or disengaged employees! Gamification works because it’s fun when work, sometimes, just... isn’t. 

Remember when you were a kid and didn’t want to do your chores unless you were challenged to them quicker than your sibling? And then suddenly you were the speediest cleaner around?

Yeah, it’s kind of like that. 😄

According to Bonusly’s own research, 95% of Highly Engaged employees say they work on a fun team, compared to only 41% of Actively Disengaged employees. Check out the 2020 Employee Engagement & Modern Workplace Report for even more data insights.

Fun in the workplace is a positive influencer of employee engagement, and gamification can be a way to introduce that fun in a low-cost way. 

Con: Gamification can lack real-world value

Here’s the thing. You can set up a game, but how long will your employees play until they get bored—or play only because it’s mandatory?

You might be able to get your employees excited about collecting digital badges or seeing their names on a leaderboard—for a few months. But just as people tire of playing the same video game, it’s likely your employees will get bored with your gamification system and stop using it.

This happens even faster when that stylized badge next to your name is just that—an image next to your name. Do employees’ gamified achievements contribute to their professional goals? Does being at the top of the leaderboard mean a cash bonus or gift is coming? 

Eventually, the social pride in “winning” will fade. And you can’t play a game without any players. So how do we make sure participation is sustained and ongoing?

Case study: the solution of gamification with rewards 

When we first launched Bonusly, we gave our customers a choice: they could use the platform to give bonuses with or without rewards with monetary value.

In the non-monetary version, users awarded each other points for doing something awesome and monitored performance with leaderboards. In the version with real-world value, users recognized each other with points that were assigned monetary value and could then be exchanged for meaningful rewards. 

From the jump, we noticed a significant drop-off in user participation with the brownie points configuration. Companies that chose not to connect points to real-world rewards were experiencing noticeably lower engagement rates than the companies that had chosen to give Bonusly points monetary value.

Non-monetary gamification, as opposed to monetary gamification, performs very poorly over time. By their 18th month of using Bonusly, companies that used real-world rewards saw a 50% higher participation rate in comparison to companies using non-monetary points.

Even with a relatively low exchange rate, bonuses with real-world value were given more frequently and by more people than bonuses with no monetary equivalent. Even being able to spend Bonusly points on a latté once a month is enough to garner this effect. 

One possible explanation for this correlation is that bonuses with real-world value help users measure the value of recognition, creating meaning for both the giver and the recipient.

In order to enjoy all the benefits of gamification (i.e., increased employee engagement and productivity), you’ll need to encourage your employees to engage with your program and make it a habit. 

In the case of Bonusly, if you knew that your teammate could go out to lunch with a friend, buy a new video game, or donate to a local animal shelter as a reward, you’d probably be more motivated to shout out their great work than you would if the recognition couldn’t be redeemed for something of tangible value.

The research backs up this idea: According to Deloitte’s Global Human Capital Trends report, “employees respond favorably to agile compensation programs that provide raises, bonuses, or other incentives more often than the traditional once-a-year rewards system.” One study even “found that employees who receive regular small rewards, in the form of money, points, or thanks, are a staggering eight times more engaged than those who receive compensation and bonus increases once a year.”

We eventually discontinued the non-monetary version of Bonusly. We passed on these learnings to our users so their recognition programs not only make it past the first few months but succeed in establishing a recognition-rich culture across the organization with a budget that works for them. 

The takeaway

When you want to motivate and engage your employees, introducing game-like aspects to work tasks is a great idea! The trick is that for gamification to work the way it's intended, employees have to voluntarily participate in gamification. 

The key to ongoing, sustained participation is meaningful rewards. 🔑🎁

For an example of an effective gamification platform that actually moves the meter, chat with one of our recognition experts today.