Signal Only 20% of leaders believe nonfinancial rewards meaningfully boost performance

Summary

McKinsey's 2026 survey finds that only a fifth of leaders believe nonfinancial rewards meaningfully raise performance. That leaves most companies underinvested in intrinsic motivation, even though research shows people who stay at the top over time are motivated by a sense of purpose, the ability to adapt, and routines for recovery, not by rewards alone. Instead, leaders lean mainly on conventional levers, with 43 percent relying on career progression, 42 percent on performance dialogues, and 40 percent on pay. The report urges organizations to support top performers with intrinsic motivators and a supportive culture. It adds that leaders should model the right behavior, give employees autonomy, involve them, and encourage innovation from the bottom up.