Should parents pay kids for good grades?

The end of the school year means report card time. Some parents reward their children for each A they bring home, but is this helpful?

My son, Adam, who is just finishing the fourth grade, recently told me that one of his school chums receives $20 for every A he gets on his report card. I know this classmate — he is smart, well-rounded, a good friend to Adam and a pretty great kid overall. While Adam stopped short of asking if his Dad and I could pay him for good marks, too, it did make me wonder if this was a tactic worth pursuing. After all, if a child’s “work” is learning — and we as a society believe in being paid for our work — isn’t this a value we want to impart to our kids?

I was always a good student in school; I studied hard and took pride in my work but was never rewarded by my parents for grades (aside from earning their pride and praise, of course). I don’t recall any of my friends getting paid for high marks, either, although it’s possible they did and I wasn’t aware of it. So, without having any first-hand experience with the money-for-grades model, the journalist in me took over and I started researching. What I found is that most parenting and finance experts don’t recommend the strategy. They argue that paying for grades undermines a student’s work ethic because it relies on external, rather than internal, motivation.

In psychology, this is called self-determination theory, which dates back to research conducted by University of Rochester psychologist Edward L. Deci in the early 1970s. What Deci’s paper and many other subsequent studies have found is that money may increase motivation in the short term, but will eventually backfire and reduce motivation. Why? Because students come to expect the reward regardless of their achievement and/or resent that others are trying to control their behaviour.

Indeed, research finds the same holds true for adult workers who are rewarded with cash bonuses.

“When money is being used as a manipulative tool, people feel it,” Jim Clemmer, president of Kitchener, Ont.-based training and consulting company The Clemmer Group told CPA Magazine in 2014. “It's how you treat your family dog: do this and you’ll get a pat on the head and a treat. It’s highly paternalistic and manipulative.” The result: unhappy, unmotivated staff. 

For some — and I could see this being the case with Adam — if the stakes are too high or the goal too lofty, a reward system can cause extra anxiety. He puts lots of pressure on himself and is already distraught if he doesn’t meet his own personal goals — even without the added factor of a missed reward.

Some parents handle this by rewarding their children’s efforts, rather than the results. The question then becomes, how do you measure effort? Is it the amount of study time? The quality of study? The progress made since the start of the academic year?

It all seems like too much of a minefield to me — and it’s one I’m choosing to sidestep for now. But I’d be interested in hearing other parents’ views and experiences.

Keep the conversation going

Do you find that money or other rewards help boost your kids’ motivation at school? Post a comment below.


The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.

About the Author

Tamar Satov

Managing Editor, CPA magazine
Tamar is a journalist specializing in business, parenting and personal finance. She blogs regularly in this space with advice and anecdotes on her efforts to raise a money-smart kid.