The AI adoption problem isn’t a technology problem; it’s an incentive problem. According to Wharton’s Scott A. Snyder, “organizations are relying on outdated reward systems that don’t align with AI’s transformative potential.”
Case in point: Companies will have invested “over $300 billion” on AI by 2025 but only “5% of employees say they are using AI to transform their work.”
The argument to learn a new tool or improve productivity is not enough because employees need a personal benefit to truly sign on, said Snyder.
Why it matters: CHROs will need a rewards program to reinforce AI adoption to see large-scale ROI, according to Snyder. Without it, progress will stall.
The big idea: Organizations need to treat AI adoption like any other major behavior-change initiative and align incentives accordingly. To date, few organizations have meaningfully updated compensation or reward structures to support AI-driven work.
AI Incentive Model from Knowledge at Wharton (2026)
What CHROs should consider
1. Reward AI innovation, not just AI usage
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Create AI innovation challenges and internal competitions.
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Offer recognition, executive visibility, seed funding, or financial rewards for ideas that progress from concept to deployment.
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Shift focus from tool adoption metrics to business outcomes.
2. Introduce team-based AI incentives
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Tie bonuses or recognition to measurable productivity, revenue, customer experience, or operational improvements generated through AI.
3. Share the gains with employees
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Allow workers to reinvest time saved through AI into learning, innovation projects, or higher-value work.
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Create new benefits for employees who successfully improve processes using AI.
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Reduce fears that efficiency gains simply translate into workforce reductions.
4. Update performance management
The bottom line: CHROs should rethink their AI strategy, so it looks like a talent and rewards strategy. The real challenge will be not designing an incentive model, but making sure it truly translates to workforce motivation. Employers may need to adjust and repeat incentives over time.
