Why rewards for failure are toxic and how to end them

The howl of discontent that went up last week in the UK when a knighthood was bestowed on Gavin Williamson, former education secretary, was audible even above the terrible, tumultuous news from Ukraine.

To non-Brits that might seem odd. Outsiders (and many insiders) find the minor pomp and flummery of the UK honours system a mystery, an object of ridicule, or both. Outside his home country, Williamson henceforth faces the minor embarrassment of having foreigners mangle his new shiny handle into “Sir Williamson” or “Lord Gavin”. Who really cares?

But it is easy to explain the anger by looking at it another way. This reward for screwing up is as brazen and as irritating as a bonus for an underperforming chief executive, a promotion for an incompetent team leader who fails upwards, or a blast of public gratitude for a blame-shifting, credit-hogging colleague.

In brief: Williamson was sacked as defence secretary in 2019, following a probe into the leaking of minutes of a National Security Council meeting. (He denied any allegation he was involved.) He was sacked as education secretary last year after bungling the handling of school exams in 2020, during the pandemic. Before his departure he came under heavy fire for failing to secure sufficient funding to help students make up for learning lost in lockdown. “I’ve been closely involved with education policy for almost 20 years and Williamson was the worst secretary of state by a long way,” said one former special adviser.

On social media, parents who had struggled to homeschool their children through the past two years of uncertainty and anxiety voiced their frustration. Teachers protested by adding “Sir” and “Dame” to their Twitter handles, in a poke at the arbitrariness of the honour. “If [Williamson] can get a knighthood for causing mayhem . . . then surely I’m due something too for over 20 years of service to education,” wrote one.

The reaction is a clear indication why rewards for failure, whatever form they take, are poisonous. They pollute entire organisations. They demoralise staff. They deter healthy competition for genuine prizes. They undermine whatever kudos was attached to the ill-assigned reward in the first place. They plunge observers into a sort of gloomy fatalism, which is the opposite of the well-documented positive impact of constructive feedback.

Williamson’s honour is further tarnished by the suspicion that he is being rewarded for success, but in the less palatable domain of “knowing where the bodies are buried”. As chief whip — when he kept a tarantula on his desk to intimidate colleagues, like a pound-shop medieval inquisitor — he is rumoured to have accumulated enough knowledge about fellow MPs’ secrets to pose a threat to a fragile government. In this analysis, the honour secures his loyalty.

The effect of bad reward systems has been widely studied. Libraries of research and decades of real-world experience inform how businesses should align incentives with performance. Boards are still pretty rubbish at it. But since the financial crisis, reforms have focused on how to delay the award of bonuses until it is clear the impact of the beneficiaries’ work is clear, or to claw them back if the recipients are judged to have messed up.

Williamson’s knighthood offends as much for the haste with which it was presented as for the honour itself. It defies the promise, drummed into schoolchildren, that hard work will yield rewards over time. It also contradicts the principle that leaders should share the suffering of the people for whom they are responsible, evident in some chief executives’ decision to cut their pay during the pandemic.

The performance of education ministers, in particular, should be judged over a longer period than that of virtually any other politician. It would have been fair to tell Williamson that he would have to wait for preferment until it was clear how his policy dithering had affected the pandemic-hit cohort of students in their grades, their job prospects, and their long-term mental health.

I have another idea. A 2012 working paper from the US National Bureau of Economic Research suggested paying teachers their bonus upfront was more effective in improving their students’ grades than rewarding them for good results at the end of the school year. Teachers whose students missed targets had their bonus withdrawn.

Since many ministers are honoured eventually, why not dub them knight or dame when they first join the government and warn that they will be undubbed if they fail? Imagine the celebration and boost to national morale if, instead of hearing “Arise, Sir Gavin”, we were treated to a ceremony where the monarch announced: “Step down, Mr Williamson.”

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Twitter: @andrewtghill



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