Do Carrots and Sticks Motivate?

In 1993 Alfie Kohn wrote Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A’s, Praise, and Other Bribes. Around this same time a major telecommunications company client presented us with a problem that they hoped we could help them solve.

The problem was that they continually rolled out incentive programs in an effort to drive better sales and service outcomes in their various business units. Each one seemed to improve results for a while but the improvements were not sustained. It also seemed that they had to up the ante with each successive incentive program to get the same results. Kohn’s book was about the unintended negative impact of a lot of reward systems being used in education. What we discovered in researching what was happening at the telecom company was that there were very similar impacts in the corporate environment.

Our recommendations helped our client shift from rewards that were costly but didn’t produce sustained results to engagement with employees that inspired people to do more because they felt appreciated and knew what their contributions meant to the companies outcomes. The first step in this shift was simply to communicate what each business unit was striving to accomplish (sales, retention, additional service lines) and breaking that big goal down so that team and each individual knew what their efforts meant to the overall goals. By sharing this information and providing weekly updates on how the business unit was performing each employee knew that their efforts mattered. The employees also felt that they were all part of something bigger than themselves instead of just being focused on getting the reward for themselves. Our client discovered that, overall, their people performed better and more consistently than when their focus was on whatever reward program was being offered.

Understanding that different employees find inspiration in different aspects of their work also makes designing an incentive program that works for the majority of employees very difficult. On the other hand, humans innately look for a sense of belonging and of being part of something bigger than themselves.