Can We Please Let Go The Carrot-and-Stick Shtick?

When I read my previous post’s suggested article, How Successful People Overcome Toxic Bosses, I felt more depressed than hopeful. Evidently, there are a lot of horrible bosses out there, requiring us to develop strategies to keep them at bay. What a waste of energy and time, both of which are such precious resources for our work and life. A different perspective that places more responsibilities on bosses evokes in me a slightly more positive reaction. Managers who develop relationships with their direct reports approaching trusted “alliance” are in a better position to keep staff from quitting. Always easier said than done, right? But can we afford not trying?! For good reasons, I keep going back to Dan Pink’s articulation of autonomy, mastery, and purpose for his motivation 3.0 as the blueprint for managers to build a long-term healthy workforce.

In his 2011 book, Drive: The surprising truth about what motivates us, Mr. Pink lays out in greater detail why and how autonomy, mastery, and purpose should replace the primitive “carrot-and-stick” motivation system, which he terms motivation 2.0 and, with slight tweaks, motivation 2.1. (Motivation 1.0 was hunter, predator and survival instinct…really old). Largely relying on external motivational forces, the old systems worked for a time, but our new technologies have created needs for business models that embrace different ways people in the 21st century operate. Intrinsic motivation has always been a major part of us, but it’s especially critical in today’s business world.

imgresWhen Maslow proposed his “hierarchy of needs,” he had already offered a truer picture of the more complex nature of human motivation. His hierarchy starts with the most basic needs, food, security, shelter, etc., and moves up to self-esteem and self-actualization. Based on Maslow’s model, McGregor’s Theory Y posits that there is intrinsic motivation behind peoples’ desire to work; they want more responsibility (with authority) to do their work. Further, “carrot-and-stick” (C&S) ultimately limits a person’s productivity. And Theory Y was introduced in the 60s!

Yet, in 2015, we still see most organizations operating on C&S assumptions, even in the face of preponderant evidence demonstrating otherwise. In many new business models, such as Wikipedia or Google, “open source” is the operating principle; people join the force because they enjoy it or find it challenging. Other new business models, such as “social business,” aim to maximize purpose instead of profit; they downplay profit-making and emphasize social missions. Carrot-and-stick model is outmoded for these new types of business. In fact, the C&S model isn’t especially effective on animals, as horse and dog whispers have demonstrated to many pet owners; so what’s with managers who still hold onto C&S?images-6

So why doesn’t carrot-and-stick work well? It usually ends up with “giving us less of what we want and bringing us more of what we don’t want.”

All organizations, of all natures, want high performance, creativity, and good behavior from their employees. Numerous studies have found, time and again, that giving and increasing rewards, in the long run, reduces performance, creativity, and good behavior. Mark Twain, typically keen of observation, noted such a relationship in Tom Sawyer, “…that Work consists of whatever a body is OBLIGED to do, and that Play consists of whatever a body is not obliged to do.

In the early 70s, Lepper, Greene, and Nisbett, focusing on preschoolers, studied the relationship between reward and intrinsic motivation. This study is now considered a classic and has been widely cited. The researchers arranged to observe some preschoolers during their recess; they were intrigued to see some children preferring to stay behind and draw. So, they set up their research procedures in this manner: For one group of preschoolers, they offered the children, upon completing drawings, a “Good Player” certificate, complete with the child’s name with a pretty ribbon. This was the “expected-award” group. For the second group, “unexpected-reward,” the children only received the certificate when they finished their drawing; they were not told in advance that this would happen. And the third group, “no-reward” group, they just drew as they usually did.

Two weeks went by before the researchers returned to observe the children again. The No-Reward and the Unexpected-Reward groups of children drew just as much, with the same relish, as ever. However, the children who expected reward “showed much less interest and spent much less time drawing.”

Here is the important key to understand and grasp. The reward by itself didn’t dampen the children’s spirit; it’s the contingent if…then (if you do this, then you’ll get that) that produced the negative impact. It took away the children’s autonomy.

This research has been replicated in different manners on different age groups across different cultures numerous times. But as Mr. Pink said and wrote, “This is one of the most robust findings in social science – and also one of the most ignored.” Many economists have researched in the business settings, and their conclusion? “We find that financial incentives…can result in a negative impact on overall performance.”images-5

Please understand that no one is advocating not giving financial compensation, but when people’s basic levels, “baseline rewards,” are met, they yearn for better working conditions. It’s when people are underpaid, when they have to worry about how to feed themselves and/or their families (and shelter and security…Maslow’s basic needs) that they get angry at the “unfairness of their situation and the anxiety of their circumstances.” Employers get limited productivity from underpaid employees.

I’ve written often enough about how extrinsic motivation kills creativity (examples here & here), so I will not repeat that here.

Using carrots not only has limits, it can be counterproductive. Extrinsic motivation often gives us more of what we don’t want, such as unethical behavior or short-term thinking. For instance, if we make our own goals, we are motivated to reach them. If goals come from higher management, they can lead to bad outcomes. When Sears imposed a quota on auto sales parts, workers overcharged customers or repaired parts that didn’t need repaired. Enron set a very high financial goal, and guess what happened?! So, some business professors now actually suggest that goals should come with a warning label, “Goals may cause systematic problems for organizations due to narrowed focus, unethical behavior, increased risk taking, decreased cooperation, and decreased intrinsic motivation. Use care when applying goals in your organizations.” I wholeheartedly concur.

Next week, let’s take a closer look at autonomy, mastery, and purpose. Till then,

Staying Sane and Charging Ahead.

Direct Contact: taso100@gmail.com

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