Carrots or sticks?

The promise of "carrots" or the threat of "sticks" ?

Rewards or punishments? What is bigger drive for people, in organization, in companies and in every relationship in private life. When we attempt to motivate people, we try to give them anticipation of pleasure by promising rewards (a bonus, positive feedback, public recognition) or we try to warn of the pain of punishment (negative feedback, public humiliation, a demotion etc.). But what is not perfectly clear is: Which should we be using- the promise of, "carrots" or the threat of "sticks"? And when is good time to use it which one of them?

This blog aims to explore which way is better to move the people in the companies and practically contribute its value to the employee’s effectiveness.

The Role of Rewards & Punishment as Deterrents

According to Neil Kokemuller, rewarding good behavior and punishing problematic or undesired behaviors are basic tenants of motivation. However, companies over time have found that rewards often reinforce positive behavior and motivate repetition. Punishment may temporarily motivate compliance, but it often leads to lower morale and less productivity in the long run.

Reward Basics

Rewarding behaviors essentially draws attention to the fact that an employee accomplished something or acted in a way that is desired by the company or manager. It also reinforces the behavior if the employee connects the reward to the behavior and values the reward. Thus, a reward that is desirable and consistently provided in responses to the desired action or behavior can have significant short-term and long-term motivational benefits.

Effective Rewards

Success with rewards generally begins with rewarding the behaviors you want. If you want a team-oriented worker, reward for demonstrated teamwork as opposed to aggressive, independent behaviors. Rewards don't have to be highly tangible in all cases. Frederick Herzberg noted in his two-factory theory that recognition, prestige and rewarding work often have greater motivating potential than income. Thus, praise and public acknowledgment of a job well done can often boost an employee's morale and motivation. Gift cards and cash bonuses are always nice, too.

Punishment Basics

Punishments in the workplace can include intangible and tangible elements. Nagging an employee to complete work, making threats and hovering are examples or intangible punishments. More tangibly, verbal or written reprimands, pay cuts, demotions and suspensions are punishments. When a manager uses one of these techniques to motivate behavior, he is attempting to motivate by fear. The hope is that an employee will want to do what is expected to avoid the undesirable outcome -- the punishment.

Punishment Criticism

Punishment is a common tool used in various motivational situations. However, a June 2012 "Business News Daily" article pointed out that companies increasingly believe that a "carrot," or positive reinforcement or reward, is much more impacting to employee performance than a "stick," or punishment. Employees may temporarily react to unexpected or undesired punishment by increasing production or performance. However, fear, anxiety and frustration can ultimately cause employee burnout and contribute to a negative work culture. These inhibit long-term benefits. (The Role of Rewards & Punishment as Deterrents, 2022)

 

As we know recognition and rewards will vary from organization to organization, and how we appreciate employees will depend on our unique company needs. Our team could be motivated by a company-sponsored outing, a thoughtful email, or a gift card to their favorite store. It’s up to us to understand how to most meaningfully appreciate our team members and with what rewards. There are so many ways to uplift our employees, this are some of them.

Types of Employee Recognition and Rewards

Recognition and rewards will vary from organization to organization, and how you appreciate employees will depend on your unique company needs. Your team could be motivated by a company-sponsored outing, a thoughtful email, or a gift card to their favorite store. It’s up to you to understand how to most meaningfully appreciate your team members and with what rewards.

Types of Recognition

Bonuses

There are many types of bonuses, ranging from small to large.

Small bonuses, sometimes called spot bonuses because they’re given “on the spot,” are small monetary rewards given frequently by one colleague to another in recognition of a valuable contribution. Although small bonuses can be given by managers to their direct reports, they can also be given by other colleagues, and even from a direct report to a manager.

Small bonuses provide several unique benefits. Like spot bonuses, staff recognition in the form of bonuses can be given in the very moment that a valuable contribution is made by an employee. Employee recognition given in the moment has the greatest potential for impact, because the action is rewarded almost immediately, when it’s top-of-mind.

Because these bonuses are small by nature, everyone can give them out often, providing multiple positive instances of employee recognition without dramatically altering an employee's compensation.

Their on-the-spot nature dictates that spot bonuses are given at an irregular cadence, in contrast to annual and quarterly bonuses.

Written praise

Writing thank-you notes can not only show appreciation, but is tangible proof of an employee’s contributions. Written praise is a flexible method of recognition and notes of praise are almost universally appreciated, whether written or sent as electronic communication.

Verbal praise

Verbal praise is perhaps the oldest, and longest-standing form of peer-to-peer recognition in the workplace. Verbal praise is given by colleagues, generally in an ad-hoc fashion, in recognition of a staff member's valuable contribution.

Although nearly always informal in nature, verbal praise is occasionally solicited as part of a formal staff recognition program.

When should recognition be given?

We’ll cover the characteristics of effective recognition in a later section, but here’s a sneak peek of one of the main components—timeliness. It’s important to recognize employees at key moments, whether that’s right after a project has been completed, on their work anniversary, or even their birthday.

Events

Employee’s first day

Should you recognize employees before they even start working? We think yes. Besides, we think the stressful process of interviewing, negotiating, and making it through first days or weeks definitely deserves some kudos! The benefits here are twofold: new employees feel welcomed into the fold right away, and existing employees are able to break the ice immediately.

Birthdays

Birthdays are a special occasion for a majority of people. If you’re in a 9-5 job, chances are employees will be spending a good amount of that special day in the office. While everyone has different preferences around the level of attention they’d like to receive, it’s not a bad idea to show them that they are recognized and valued.

Employee Appreciation Day

Employee Appreciation Day is a semi-formal holiday founded by Bob Nelson, a founding board member of Recognition Professional International. Over the past 20 years, other companies have embraced the unofficial holiday, paying homage to their employees on the first Friday of March.

As a low-key “holiday,” Employee Appreciation Day is a great opportunity to recognize employees without the pressure of annual or quarterly reviews. Celebrate Employee Appreciation Day with small company-funded events like barbecues, office parties, or with fun decorations!

Milestones

Work anniversaries

Work anniversaries are one of the most common uses of modern employee recognition, but they're often poorly executed. We consider work anniversaries an epiphany moment, and they should be treated as such. Reaching a work anniversary is a key milestone when employees often reflect on their past, contemplate their future, and assess their well-being at their workplace. So receiving a simple gift card or plaque can feel impersonal, leaving an employee disillusioned about the work they put into the company.

A work anniversary should represent another year of a job well done, and should be meaningfully recognized. It’s a great opportunity to thank the employee for the specific impact they've made over the past 12 months and over the course of their career. But don't just say, "You've made a big impact this year." Explain exactly what the impact was, why it matters, and how crucial their work is to the team, the organization, and the people it serves.

Project completion

It’s always a weight off the shoulders when a project is completed, launched, or published, so this is also a great time to recognize all the work that went into the process. Be sure to recognize team members in a timely manner––recognition has much more impact in the moment than when it’s delayed.

Year end

A year end or annual bonus is financial compensation given to employees in addition to their base pay. Annual bonuses are given once per year, usually at the end of the fourth business quarter. They can be given for a multitude of reasons, but are usually based on goals, either the performance of the organization, the individual, or both. Depending on the organization or industry, annual bonuses are sometimes expected as part of an employee’s total compensation package.

Quarterly review

Quarterly bonuses are similar to annual bonuses, but are metered out more frequently, on a per business quarter basis. Quarterly bonuses are most commonly given as part of a heavily performance-based compensation model. Sales organizations or teams are common users of the quarterly bonus structure. (Types of Employee Recognition and Rewards - Bonusly, 2022)

Conclusion

The proverb says "Happy wife - Happy life" in business world we can say "
Happy Employees-Happy customers". We all know that customers roll is more important in every business or like it’s capture in the maxim "The customer is always right". Jeff Bezos, one of today’s most iconic businessman can also agree with this, he has laid Amazon’s incredible success at the feet of its obsession with customer, saying "You can be business-model-focused, competitor-focused, you can be product focused… But in my view, obsessive customer- focus is by far the most protective of Day 1 vitality."

But the question is How we can make our employee to be more productive, more engaged and happier? Probably there is no exactly receipt, but for sure it helps if we can give them bonuses, promotion, positive feedback or my newest thought… Why we don’t give them emotion, emotion thru traveling, adventure to some exotic place, something that he/she will never forget. Something that will always awaken good filings and memories. Because when we give them money, everyone can spend that money for something in need at that moment, like loan rate or new furniture, but adventure on some exotic places its always a better idea. There are many IT companies that are doing team buildings at some exotic places and there they are developing ideas, staying connecting and getting close with employees.

As we said, leaders often rely on the carrot vs. stick approach to motivate employee but does everything is all around rewards and punishments or there is something more? I can totally agree with Lisa Lei when she said for Harvard Business review " Motivation is less about employees doing great work and more about employees feeling great about their work".

Motivated employees are those that are empowered in their tasks, jobs and to make a difference in the company.

Also trust is very important and foundational component to any relationship and one that is essential for employees to be motivated. When an employee feels that they aren’t trusted to do the job they are getting paid to do because they continue to be micromanaged, is squelches any motivation they have.

 There is no stronger motivation for employees than an understanding that their work matters, they are important and theirs engagement are valued. They do want to know that their work is seen and appreciated by their manager, supervisor or company owner. Be proactive in identifying and addressing them, is very important thing to do for our employees. And for the end, one and only Covey…

 

"An empowered organization is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organizational success".

Stephen R. Covey

 

Bibliography

Your Business. 2022. The Role of Rewards & Punishment as Deterrents. [online] Available at: <https://yourbusiness.azcentral.com/role-rewards-punishment-deterrents-17196.html> [Accessed 1 May 2022].

Bonus.ly. 2022. Types of Employee Recognition and Rewards - Bonusly. [online] Available at: <https://bonus.ly/employee-recognition-guide/types-of-employee-recognition> [Accessed 1 May 2022].