Why the traditional ‘carrot and stick’ approach to employee motivation and people development doesn’t work
In my experience, there are three types of approaches to employee motivation :
- Companies that don’t bother at all
- Companies that have complex systems and procedures in place to ensure that their people development programme is rock solid (but aren’t necessarily interested in what their employees’ real goals and ambitions are)
- Companies that actually listen to employees and help them get to where they want to go
Those that don’t bother at all often take this approach because of cost/time issues. They don’t realise the negative effect on productivity (and therefore the bottom line) and ultimately the loss of their most valuable resource due to declining employee motivation.
There are a whole raft of companies with extensive professional development programmes. The expectation is that employee motivation will soar because they have the opportunity to put a development plan in place (which is often heavily vetted/influenced/directed by their managers and/or regimented organisational career progression paths). They will then given targets based on that development plan, using the carrot (reward) and stick (punishment) approach to promote achievement of those targets.
And then there are a few companies that realise that the only way to raise employee motivation, and therefore creativity and productivity, is to focus on their intrinsic goals: the things that really matter to them. This approach allows these companies to grow. Whether Google’s “20% time” rule has been effectively killed off or not (see this Huffington Post article ), in its heyday it brought us Gmail and AdSense as well as many more innovations that have been highly profitable for Google.
Whilst hordes of young managers get itchy feet and often end up getting hefty pay-rises every time they move to a new company (on average every 28 months – see this article from the Harvard Business Review), the reason they leave isn’t money. It’s lack of development and progression. They don’t feel valued and they therefore lose motivation.
In his fantastic 2009 TED Talk, “The Puzzle of Motivation”, Dan Pink talks about the ‘mismatch between what science knows and what business does’ and makes a compelling case for the need to focus on intrinsic motivators rather than extrinsic ones.
Dan cites extensive well-documented research carried out at illustrious institutions such as MIT and the London School of Economics demonstrating that, for tasks requiring even just the smallest amount of cognitive ability, incentives don’t increase performance; they have a detrimental effect and actually decrease performance.
Dan breaks down intrinsic motivation into three key factors:
- Autonomy: “The urge to direct our own lives.”
- Mastery: “The desire to get better & better at something that matters.”
- Purpose: “The yearning to do what we do in the service of something larger than ourselves.”
Coming back to the three types of companies in terms of their approach to people development, I have worked in all three. I consider myself very fortunate to have worked, first as an employee, then a manager and finally a shareholder and director in a company that fell into the third category. A company that valued intrinsic motivators. Although we had a clear and structured performance review and goal-setting system, employees were genuinely listened to and allowed to take on projects that developed the skills they were keen to further. This led to increased motivation as employees felt empowered and valued.
The risk to a business adopting this approach is that some employees develop as far as they can but then move on because they want to move their career in a different direction, but I see this as evidence of success: Developing employees shouldn’t be about tying them to a company forever. It should be about allowing them to flourish and progress as far as they want to within the company, for as long as there is mutual benefit in that employee/employer relationship.
So if you don’t want to kill employee motivation, remember the three key words: Autonomy, Mastery, Purpose.