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carrot and stick for employee

By Beth Kuhel

Social scientists have studied how we run our businesses and have uncovered a surprising fact: Employee incentives don’t work. The carrot and stick approach actually demotivate employees. Penalizing employees for not completing tasks is ineffective as a motivational strategy and can lead to even less productivity. And monetary rewards that are tied to complex tasks also lead to poorer performance.

Daniel Pink, NY Times bestselling author of Drive and author of four other books on work and management, says that there is a mismatch between what science knows and what people think. And here’s what science knows:

  • Those twentieth-century rewards, motivators like the carrot and the stick, do work but only for a surprisingly narrow band of circumstances. (Very focused, simple tasks)
  • Those if-then rewards often destroy creativity.
  • The secret to high performance isn’t rewards and punishments, but that unseen intrinsic drive — the drive to do things for their own sake. The drive to do things because they matter.

“The monkeys solved the puzzle simply because they found it gratifying to solve puzzles. They enjoyed it. The joy of the task was its own reward.” –Daniel H. Pink, Drive: The Surprising Truth About What Motivates Us

The Three Building Blocks That Make Up an Effective Operating System:

  1. Autonomy: the urge to direct our own lives
  2. Mastery: the desire to get better and better at something that matters
  3. Purpose: the yearning to do what we do in the service of something larger than ourselves

Managers need to give their workers more autonomy. An example at Google is the company’s incentive strategy that allows engineers to spend 20 percent of their time working on a project of their choice. In fact, half of the new products Google creates in a typical year (things like Gmail, Orkut, Google News) are a result of the creative processes derived from self-directed projects.

Pink describes a more radical example of it: something called the Results Only Work Environment (ROWE), created by two American consultants and in place at about a dozen companies around North America. In a ROWE people don’t have a schedule. They show up when they want. They don’t have to be in the office at a certain time, or any time. They just have to get their work done. What happens? Almost across the board productivity goes up, worker engagement goes up, worker satisfaction goes up, and turnover goes down. Autonomy, mastery, and purpose are the elements driving this strategy and it works. Pink offers more proof of that by citing the example of Wikipedia, an online encyclopedia created by people whose only incentive was to do it for fun and because they enjoyed it. No one got paid a cent for their work. The intrinsic motivators — autonomy, master, and purpose — explain its success.

Pink notes that traditional notions of management are great if you want compliance. But if you want engagement, self-direction works better. Another expert, Yves Morieux, says that the layers we place between management and employees are far too complex and they inhibit employees from feeling engaged. He says that reducing the number of rules and policies that come when a company expands its business actually reduces employee productivity, engagement, and happiness. Workers who are given more autonomy to take risks and are made to be accountable for their decisions show greater motivation to contribute at work.

Pink concludes that the best part is what we intuitively already know: “Science confirms what we know in our hearts.” If we repair the mismatch between what science knows and what business does and shift our notion of motivation by moving past the ideology of carrots and sticks, we could dramatically strengthen our businesses. Companies adopting strategies that increase employees’ autonomy, mastery, and purpose will have a much better chance of solving more complex problems — and maybe even change the world.

Beth KuhelBeth Kuhel is a contributor to the Personal Branding Blog. She is founder and president of Get Hired, LLC, and the co-author of From Diploma to Dream Job: Five Overlooked Steps to a Successful Career. Beth’s coaching assists students and career changers to successfully match their needs, interests, passions, skills, and personal goals with the needs of a sustainable industry in a sustainable location. Beth is a C.E.I.P. (Certified Employment Interview Professional). She coaches individuals and groups at all stages of their career journey to maximize their potential for success. You can follow her on Twitter @BethKuhel.

 

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The Personal Branding Blog offers branding and career advice from Dan Schawbel and his team of experts. The blog helps professionals learn how to build a powerful brand that they can use as their competitive edge while searching for a job, advancing at work or with their own businesses. With thousands of articles, it has helped millions of readers since 2007. The blog was named by Forbes in both 2012 and 2013 as a "Top Website for Your Career" and it made CareerBuilder.com's "6 Job Blogs You Should Be Reading."

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