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Organizations need to be built to change and to attract the behaviours they reward. Traditional reward systems lead to stability and often fail to motivate either performance or change. Merit-based salary increases are typically small and permanent, meaning they don’t significantly increase motivation, but can result in poorly performing but highly paid long-term employees. They create a situation in which the only way to punish underperforming or change-resistant employees is to fire them. Bonus pay is a superior reward system, as it provides more money (and hence motivation) and is impermanent. It is particularly valuable for driving organizational change. The impact of stock plans on motivation is likely less than bonuses, because the connection between performance and pay is weaker. But stock plans can create a culture of ownership and “common fate” and may better motivate change than profit sharing. Person-based pay, which pays an employee according to their skills and knowledge, is more effective in a work situation with changing task assignments than paying someone for a particular job. As this article shows, decreasing the rewards for seniority and job size are important, but they are unlikely to be as powerful as rethinking how the system should reward individuals for their skills and how it should reward performance.