Whenever the topic of employee engagement and performance comes up, it isn't long before people start talking about the concept of discretionary effort. A truly engaged employee will put in discretionary effort when it comes to their career.

But what does discretionary effort mean? Discretionary effort refers to the amount of additional effort, beyond what is already expected, that an employee is willing to put in to their work.

Whether it be in the office or at school, people tend to think financial incentives would make them and their team work harder. If only they could get paid directly for putting in that extra effort, and perhaps their overall motivation and performance would improve as a result. And sometimes, especially when the reward is big enough, that is what happens. The opportunity to earn more money for improved performance presents itself, and thus, performance improves.

Intuitively, one might assume that monetary incentives are the most effective reward system. People like money, so monetary rewards should increase effort and maximize productivity. Despite this common assumption, research shows that higher rewards don't always lead to more effort and employee engagement. Paradoxically, some studies have found the opposite can happen, a phenomenon known as "incentive reversal."

The people we work with have an enormous impact on our lives, both personally and professionally. So it’s no wonder that within the professional ecosystem, we manage different types of relationships that benefit us and our work in different ways. A Gallup poll on the state of the American workplace found that positive work relationships have an immediate and tangible impact: “When employees possess a deep sense of affiliation with their team members, they are driven to take positive actions that benefit the business.”