Frameworks for successful consequences
Consequences in a way can be seen as a function of rules and limitations within the game or gamified environment. Rules create structure and boundaries in which an individual must navigate, learn and understand. If they don’t, then they suffer the consequence. This possibility offers focus to the individual and creates a level of efficient concentration in them. They are no longer floundering around in the dark expecting and an unknown threat to appear.
Rules and limitations also improve creativity and innovation. As people are forced to come up with new, clever and interesting ways to solve or beat a challenge with the few things given to them. If they have too many options and they still lose, then they will not feel empowered, they will most likely feel stupid and inevitably they will lose motivation because the consequence of that freedom is seen as a punishment then. This psychological state is commonly seen as a negative feedback loop.
Psychology of consequences
As you now know, consequences can be both positive and negative. But within a well-structured environment, they can be beneficial psychologically to people. This is because of the cause and effect, or specifically Thorndike’s “Law of Effect”. Basically, it was a specific stimulus result in a response. Pretty straightforward so far, and after that, the satisfactory conclusion leads to a returning or recurring behavior. Essentially, we know that this is Operant Conditioning and Reinforcement theory within Motivation Theory.
B.F. Skinner is most notable for his work on reinforcement theory, and for him, consequences of an action dictate a certain behavior, more so than the throughput of the process for that behavior. As with his pigeon, reinforcing the mechanic that the button delivers food (sporadically), increased the probability of a response occurring. And the opposite is true, punishing the behavior created an aversion and lowered the probability of the response reoccurring. For example, if the pigeon was electrocuted every fourth time it pressed the button. Eventually, it would stop pressing it.
In professional environments, this may sound slightly familiar. You are rewarded for repeating good work (reinforcement), you are punished for not repeating good work (aversion). But there is also a third outcome, a positive result is ignored. Much like an aversion of a punishment, this state also lower desired behaviors, and motivation.
All three of those states, however, are pretty low-motivating anyway. This is probably why they sound familiar to you. What you need to do when you are gamifying something is to allow the fact that the reward/consequence of win or loss creates a notable change or progress in an individual.