7 Attributes of Rewards and Consequences to Shape Corporate Culture

Is It Possible to Shape Corporate Culture?
Your corporate culture exists by design or by default.  Organizational culture assessment data consistently show that most leaders believe they inherited their culture rather than deliberately created it. That assumption is costly.

The real question is not whether culture can be shaped, but whether leaders are willing to design it with intention. When culture is aligned with strategic objectives, it accelerates execution and engagement. When it is not, it undermines accountability, results, and team cohesion. The levers are not mysterious: what leaders reward, what they tolerate, and what they consistently reinforce through consequences all send powerful signals. The choice is stark — shape culture on purpose, or let it shape your strategy for you.

The Definition of Culture
Organizational culture is not what is written on the walls or stated in corporate values decks. It is the way work actually gets done — day by day, decision by decision — especially when no one is watching. At its core, corporate culture reflects the collective attitudes, assumptions, and shared sense of purpose that shape how people behave, prioritize, and interact across the organization. In practice, culture shows up in:

• How leaders make trade-offs.
• How teams respond under pressure.
• Which behaviors are encouraged, ignored, or quietly discouraged.

Culture Accounts for 40% of the Performance Difference
Our organizational alignment research found that corporate culture accounts for 40% of the difference between high and low performing companies in terms of:

• Revenue growth
• Profitability
• Customer loyalty
• Leadership effectiveness
• Employee engagement

Shape Corporate Culture

You may have the kind of culture you need and hoped to create, or the way things get done may need to change to get you and your team where you want them to be. The question is how much control of your corporate culture do you have as a business leader?  Can you change culture?  Enforce culture? Control culture? Shape corporate culture?

Behavior Modification and Culture Shaping
Most leaders are familiar with behavior modification — the classic “carrot and stick approach” that uses rewards to reinforce desired actions and consequences to discourage the wrong ones. While the concept is often oversimplified or dismissed as crude, it remains a foundational principle behind how behavior changes in any system. At its extreme, it is associated with animal training. In organizations, it shows up in far more subtle and powerful ways.

When applied thoughtfully, rewards and consequences are among the most effective tools leaders have to shape a high-performance culture. They:

• Clarify what truly matters.
• Reinforce strategic priorities.
• Turn abstract values into observable behaviors.

When applied poorly, however, they can distort judgment and drive exactly the wrong outcomes. The Wells Fargo sales scandal is a cautionary example — incentives rewarded short-term metrics without sufficient safeguards, accountability, or ethical clarity. The result was predictable: behaviors optimized for rewards rather than for customers, values, or long-term performance.

Culture is shaped less by what leaders say and far more by what they consistently reward, tolerate, and penalize.

An Example: Do Sin Taxes Actually Change Behavior?
A useful way to understand the power of consequences is to look outside organizations and into public policy. Over the past decade, governments have increasingly relied on so-called sin taxes — deliberate financial penalties — to nudge populations toward healthier behaviors. Taxes on sugar-sweetened beverages, alcohol, and cigarettes are classic examples of consequences designed to change choices at scale.

The logic is straightforward and intentionally pragmatic. Sin taxes aim to achieve three outcomes:

1. Reduce consumption of unhealthy products by making them more expensive;
2. Lower long-term medical costs associated with obesity, addiction, and chronic disease; and
3. Generate revenue that can be reinvested in prevention and public health initiatives.

In practice, the data suggest these levers matter.

Consider sugar-sweetened beverages. When Berkeley, California implemented the nation’s first soda tax, consumption of sugary drinks declined by roughly 20%. Alcohol taxes show a similar pattern. In Illinois, modest tax increases — one cent per serving of beer and five cents per serving of spirits — were followed by a reported 25% monthly decrease in drunk-driving deaths. Cigarette taxes are even more well-documented. Higher prices consistently reduce smoking rates, particularly among teenagers and lower-income populations, contributing to meaningful declines in strokes, heart attacks, and lung cancer. Reduced exposure to secondhand smoke compounds the benefits.

Critics correctly point out that correlation does not always equal causation. Still, the broader behavioral insight holds: people tend to avoid outcomes that feel costly and gravitate toward those that feel rewarding. When consequences are clear, consistent, and tied directly to behavior, they influence choices — whether in public health or inside organizations.

What Does this Mean for Rewards and Consequences in Workplace Culture?
The implication for workplace culture is both simple and uncomfortable: people do more of what gets rewarded and less of what carries real consequences. Culture shifts when leaders move beyond aspirational statements and deliberately reinforce the behaviors that drive results.

In practice, that means consistently recognizing and rewarding the behaviors and performance that align with strategic priorities — not just outcomes, but how those outcomes are achieved. It also means addressing undesired behaviors with timely, proportionate feedback and consequences. Avoiding tough conversations, tolerating misalignment, or rewarding results achieved in the wrong way sends a louder cultural signal than any values statement ever could.

Rewards and consequences do not need to be heavy-handed to be effective. They do need to be clear, credible, and consistently applied. When they are, culture becomes a reinforcing system rather than an accidental byproduct of leadership inaction.

7 Attributes of Effective Rewards and Consequences That Shape Corporate Culture
The right mix of rewards and consequences does more than drive compliance — it creates emotional commitment. When designed well, these mechanisms tap into intrinsic motivation, reinforce shared meaning, and shape behavior at scale. To be effective, rewards and consequences must be perceived as legitimate, credible, and worth responding to. Specifically, they should be:

1. Delivered with clear cause and effect
   People must easily connect the behavior to the outcome. Ambiguity weakens impact and invites cynicism.
2. Timely, simple, and easy to understand
   The closer the feedback is to the behavior, the stronger the learning. Complexity dilutes the message.
3. Significant to the receiver
   What motivates one person may be irrelevant to another. If it does not matter to the recipient, it will not change behavior.
4. Fair, proportionate, consistent, and respectful
   Perceived injustice erodes trust faster than almost anything else. Consistency signals seriousness.
5. Directly linked to meaningful reasons
   Rewards and consequences must connect to outcomes people believe in — customers, team success, or long-term viability — not arbitrary rules.
6. Expected, not surprising
   When people know what will happen if they act a certain way, behavior becomes intentional rather than reactive.
7. Aligned with business strategy and the desired culture
   Misaligned incentives quietly sabotage strategy. Aligned ones accelerate strategy execution.

When these attributes are in place, rewards and consequences stop feeling manipulative and start functioning as a coherent system that reinforces how work is meant to get done.

The Bottom Line
Shaping corporate culture is not a passive exercise — it is a core leadership responsibility. Leaders are accountable for creating the environment for teams to perform at their peak. Rewards and consequences are powerful levers in that process, capable of reinforcing focus, accelerating execution, and turning strategic intent into everyday behavior.

Want to learn more about how to shape corporate culture? Download The 3 Research-back  Levels of a High Performance Culture that you must get right to consistently execute strategies.

by Tristam Brown: CEO

Tristam Brown is an executive business consultant and organizational development expert with more than three decades of experience helping organizations accelerate performance, build high-impact teams, and turn strategy into execution. As CEO of LSA Global, he works with leaders to get and stay aligned™ through research-backed strategy, culture, and talent solutions that produce measurable, business-critical results. See full bio.