Friday 28 January 2011

Bonuses and why the carrot and stick don't work (in most cases)

Much has been discussed and written about the bank bonuses, the state of the economy and the recently reported growth in manufacturing.  My thoughts have turned to how we maintain momentum in what is still an unsettled economy.


So what will drive the economic engine?  In my opinion, it is PEOPLE. Ultimately, how motivated they are to work and go beyond what is required.  That will make the difference.


I wrote in a previous blog about Daniel Pink's thoughts on motivation and I would recommend his book Drive or watching the animation of one of his lectures on You-Tube.




Pink talks about motivation and that the key is providing 'autonomy', 'mastery' and 'purpose'. These are internal or INTRINSIC motivators which refers to motivation driven by interest or enjoyment in the task itself rather than relying on some external pressure.


The external motivating factors or EXTRINSIC motivators have a 'carrot & stick' approach which, in most cases, do not work.  He identifies 7 flaws of motivating people in this style of "if you do X, then you will get Y":

  • they can extinguish intrinsic motivation
  • they can diminish performance
  • they can crush creativity
  • they can crowd out good behaviour
  • they can encourage cheating, shortcuts and unethical behaviour
  • they can become addictive
  • they can foster short term thinking
So my questions are:
Are you getting the results you want from your staff?
What methods, processes and means are you using to motivate and reward your staff?
What might you achieve with a change in approach?

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