There is no doubt most us have heard or encountered the carrot and stick phenomenon in life.

Basically, carrot and stick is a management phrase used to refer to a situation where rewards and punishments are used to motivate employees.

Carrot-on-a-stick is similarly used to bring up the image of a carrot tied on a stick and held at a safe distance in front of the mouth of a donkey or horse to make it move faster in an attempt to reach the carrot. Of course, it can never reach the carrot.

Most employers think the best way to increase motivation and performance is to set targets and reward those who meet them handsomely and also unleash wrath on those who fail. This is a fallacy that has been propagated for a long time. Fortunately, nearly every research is revealing the truth on the contrary.

In 2016, American Bank, Wells Fargo fired 5,300 employees for their involvement in over two million phony accounts that cost the customers and consequently the bank colossal sums of money. It was a scandal of its own kind.

The high compensation for achieving the target and the fear of losing their job was seen as a good motivation. The good intention was to make employees unleash their best and propel the company to greater heights, but it did the opposite; pushed them to engage in unethical practices.

Motivating employees is a complex affair and most managers and business owners often get it wrong. They simply don’t get it right on what employees need to stay motivated. They assume that money is the key motivator and that employees’ greatest  fear is losing their jobs.

Workplace expert Susan Fowler says, “The new science of motivation is that human beings have an inherent desire to thrive, people want to make a contribution, people don’t want to be disengaged, but they haven’t had the words to describe these drives.”

Paul Marciano, in his book Carrots and Sticks Don’t Work: Build a Culture of Employee Engagement with the Principles of Respect, asserts that monetary rewards and punishments used as motivation are not only ineffective, a waste of time, energy and money, but also actually reduce overall morale.

So if money doesn’t motivate and targets don’t work, what works?

To get motivated and stay motivated has a lot to do with the work environment and assured future prospects more than anything else. After getting a fair remuneration based on their qualification and contribution to the business, employees need a happy, conducive environment and an assured future.

Employees are motivated when they see growth, stability and opportunities to develop themselves within their control. The feeling of appreciation both by the management and team members, together with feeling of being in charge have been cited as the key motivators.

This article was first published in The Business Daily on November 19, 2019.

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