Businessman being tempted and reaching for a carrot at the end of a stick

One of the greatest challenges we face today is motivation. How to motivate our teams, customers, and learners to do what we want them to do? The stick and carrot approach seem to have lost its charm and is not as effective as we thought it was. Maybe it’s time to rethink what we think we know about employee motivation. This article explores what science discovered and most of us seem to ignore.*

Many of us think that motivation is a simple concept; rewarding an activity will get you more of it. Punishing an activity will get you less of it. Or, as many call it, the “carrot and stick” approach: It is an idiom that refers to a policy of offering a combination of rewards and punishment to induce behavior. It is named in reference to a cart driver dangling a carrot in front of a mule to keep it going forward, and holding a stick behind it to punish it if it does not obey.

First, let’s discuss the types of motivational behaviors that social science is already familiar with. Motivation can be divided into two main types known as intrinsic motivation and extrinsic motivation.

  • Intrinsic motivation.
    The individual’s motivational stimuli are coming from within (internal). The individual has the desire to perform a specific task because its results are in accordance with their belief system or fulfills a desire and therefore its importance is attached to it.
  • Extrinsic Motivation.
    The individual’s motivational stimuli are coming from outside (external). Even though the result of performing the task may still be rewarding for the individual performing it, they are required to complete the task due to various external reasons. The most common motivation is money.

One might ask “So what is the problem here? If one performs well, they get paid more and get promoted. If one performs poorly, they are demoted or get the boot (fired). That’s the way it always worked”.

This may sound weird, but a lot of research has been done about motivation and the results show that in the long run the “carrot” can give us less of what we want; and more of what we don’t want.

Employee Motivation wordle

More Is Less

A key motivational principle says that “work consists of whatever a body is obliged to do, and play consists of whatever a body is not obliged to do”. If you look around and see all the open source ventures, it is hard to believe that such talented people did such amazing things and gave it for free.  Moreover, they give you the code and all the secrets within. What’s in it for them?

Let’s go back in time to 1995: One encyclopedia is just out, the other to be launched in a few years. You have to predict which will be more successful in 2010.

The first encyclopedia comes from Microsoft, which fund this encyclopedia and pays professional writers and editors to write articles on thousands of topics. Experienced and well-paid managers will oversee the project to ensure it is completed on budget and on time.

The second encyclopedia will not come from a company. It will be created by tens of thousands of people who write and edit articles for fun. These hobbyists will not need any special qualifications to participate and they will not be paid in any way to write or edit articles. Participants will have to contribute their labor for free. The encyclopedia itself, which will exist online, will also be free of charge for anyone who wants to use it.

Now, think forward fifteen years. Which encyclopedia will be the largest and most popular in the world while the other will be defunct?

Well, now jump 15 years into the future: Microsoft Encarta was a digital multimedia encyclopedia  published by all mighty Microsoft Corporation from 1993 to 2009. Originally available for sale on DVD, it was later also available on the World Wide Web via an annual subscription; although later many articles could also be viewed free online with advertisements.

Meanwhile, Wikipedia is a free-access, free-content internet encyclopedia, supported and hosted by the non-profit Wikimedia Foundation. Anyone can access the site and edit most of its articles. Wikipedia is ranked among the ten most popular websites and constitutes the Internet’s largest and most popular general reference work.

Against all expectations, a free venture made by unpaid individuals ended up becoming the largest and most popular encyclopedia in the world Vs. highly qualifies and paid authors and managers. Same scenario repeated itself with Firefox Vs. Internet Explorer (R.I.P).

What happened? The conventional view of human motivation has a very hard time explaining this result. What motivates people to share their knowledge and experience for free?

Employee Motivation: What Doesn’t Work?

A routine job such as turn the same screw the same way all day long does not require much creativity and usually is done in low paid third-world countries. Since creativity is a requirement these days, jobs become more enjoyable. Doing what we enjoy boosts the intrinsic motivation that drives us forward with or without the “carrot”.

But wait, it gets better: As Edward L. Deci began discovering forty years ago, adding certain kinds of extrinsic rewards on top of inherently interesting tasks can often dampen motivation and diminish performance. In other words, rewarding highly motivated people may cause them to demotivate. Whaaaat???

The only explanation I could find is that rewarding (usually by money) takes out the “fun” and makes it “work”. For a growing number of people, work is often creative, interesting, and self-directed rather than a boring fixed routine. This is a serious conflict between what science knows and what business does.

Cast Study: Blood Donations

This experiment may help us understand how the human mind works. The British sociologist Richard Titmuss (1970) said that paying for blood donations wasn’t just immoral, it was also inefficient. Titmuss claimed that paying citizens to donate would actually reduce the country’s blood supply rather than motivate more people to donate. Two Swedish economists decided to see whether Titmuss was right. They visited a regional blood center in Gothenburg and found 153 women who were interested in giving blood.* Then they divided the women into three groups.

  • Group 1: Participants could give blood, but they wouldn’t receive a payment.
  • Group 2: Each participant received 50 Swedish kronor (about $7).
  • Group 3: Each participant received a 50 kronor payment with an option to donate the amount to a children’s cancer charity.

The Results

In the first group, 52% of the women decided to go ahead and donate blood. They were willing to do a good deed even in the absence of compensation.

One might expect that the second group would be a bit more motivated to donate. Getting a few kronor on top of a good deed might give that impulse a boost. But that’s not what happened. In the second group, only 30% of the women decided to give blood. Instead of increasing the number of blood donors, offering to pay people decreased the number by nearly half.

Meanwhile, the third group, which had the option of donating the fee directly to charity, responded much the same as the first group with 53% blood donors.

Adding a monetary incentive did not lead to more of the desired behavior; it led to less.

The Reason

It tainted an altruistic act and pushed out the intrinsic desire to do something good. The third group proves this point; they got the chance to twice their good deed by donating the money to a good cause. This result repeated itself in various studies about human behavior and motivation. It shows us the power of intrinsic motivation.

The 7 Deadly Flaws Of Carrots And Sticks

Daniel H. Pink, the author of “Drive: The Surprising Truth About What Motivates Us” concluded that Carrots And Sticks have seven deadly flaws:

  1. They can extinguish intrinsic motivation.
  2. They can diminish performance.
  3. They can crush creativity.
  4. They can crowd out good behavior.
  5. They can encourage cheating, shortcuts, and unethical behavior.
  6. They can become addictive.
  7. They can foster short-term thinking.

Conclusion

We should rethink rewards and punishments as motivators in employee motivation. I’m not saying that we should not give incentives, but we do need to use them with great caution. Many of us are fooled by an immediate motivation boost we see and we are oblivious to the poor results we may achieve after a while. The destructive effect of materialistic rewards is to be seen in the long run, not immediately. Maybe students dropping out from online courses regardless of incentives and rewards can confirm that claim; or not…

What do you think? Are you going to change the way you reward your employees or learners? I would love to hear your comments.

* This article was written by Rambo Levin and is based on the book “Drive: The Surprising Truth About What Motivates Us” by Daniel H. Pink (published on December 29, 2009, by Riverhead books).