Carrot and Stick Model Approach in Organizations-1

CARROT AND STICK MOD EL APPROACH IN ORGANIZATIONS

INTRODUCTION All organizations use a variety of motivational tools and techniques to motivate their employees in attempts to ensure that they perform to the best of their abilities. This can range from tangible benefits like bonuses and paid holidays to intangible processes (?) like job rotation and the setting of work goals. Sadly, many of these attempts fail. The question asked is, why is this so? Why are organizations not able to harness the full potential of their employees? What motivates employees? Why do employees differ in relation to their motivational needs? These are all perplexing questions, which have got no clear answers. Motivation is a nebulous element that has been studied and practiced throughout history, and yet today, we are still unclear as to how to deploy it effectively.

THE RELATIVITY OF MOTIVATION Motivation is what energizes, directs and sustains a person’s efforts; hence its complexity. The elements that motivate differ from person to person, from situation to situation and from time to time. To use a simple illustration, a bottle of water will have more value to a person lost in a desert as compared to a person who is not in that situation. Rescue the person and put him or her in a hospital and the motivational value of the bottle of water will depreciate. Health then becomes relatively more important. Another example is in relation to overtime. When doing overtime, employees have a choice between doing extra work and getting extra money, or less work and less money. Some individuals may find that the idea of earning more money outweighs the drawback of having to do extra work. On the other hand there will be those who place more importance on spending time with their families and are thus not amenable to spending more time at work. The same factor may therefore motivate according to the person's circumstances at the time. In both these instances, it is clearly demonstrated that motivation is relative and has different value to different people, depending on the circumstances.

THE CARROT AND STICK APPROACH TO MOTIVATION If you have been working or have ever worked, you would have come across the term, ‘The Carrot and Stick Policy’. This is a well-known technique in management and corporate circles that uses a mix of reward and punishment to achieve compliance or to induce certain behaviors in employees. This term has its origin in folklore where a carrot was tied to a stick and placed in front of a donkey to induce the donkey to try and move forward in a bid to reach the carrot, thus pulling the cart that was hitched to the donkey. Well - it goes without saying that the stick also meant a sharp jab or a poke if the donkey obstinately refused to move. Many managers see motivation in terms of this notion and so their efforts to motivate is limited to asking the question; should I bribe people or simply threaten them? However when put into practice, this concept is found to be more complicated than this. To motivate is to change behavior. How can you change the behavior of people, both as individuals and as a group or team? Using the carrot and stick approach, there are basically two ways; behavior is changed by force or by choice through the use of incentives. The carrot and the stick approach were different approaches used by the British when they got control of Quebec after the Seven Year's War. They knew that at that time they were out-numbered by the Canadiens (as the French settlers of Quebec were known), so they had to be careful about how they would decide to keep them from rebelling, yet still enforce laws. The Stick Approach: The stick approach was an approach which used force and aggression. This approach would not give the opposition a chance to rebel because in a way it was a threat. A supporter of this harsh approach was the British Colonial Secretary, Earl of Shelburne. For example, if the British planned to use this approach on the Canadians, they would: restrict the Roman Catholic religion, send all French government and church officials back to France, give the entire control of the

fur-trade to the British merchants, not allow the Roman Catholic practitioners to take part in the government, and restrict the territory of Quebec to a small area. The Carrot Approach: Unlike the stick approach, the carrot approach used sympathy, and coaxing. This approach is related to dangling a carrot in front of a horse’s head to get it to move, rather than striking it with a stick. When using this approach the opposition would have a voice in what the new laws should be, and in this case it was used to keep the opposition from rebelling. A supporter of this sympathetic approach towards the Canadians was British Governor, Sir James Murray. For example, if the British were to use this approach towards the Canadiens, they would: allow all Roman Catholics to practice their religion freely, allow Roman Catholics and Protestants to take part in the government, allow the French to take part in the government, and allow the French into the interior, yet still giving some territory to the First Nation’s Peoples. As you can probably notice the difference in these two approaches is huge, yet they were both used for the same reasons. Jeremy Bentham’s “The Carrot and the Stick Approach”: Possibly the essence of the traditional view of people at work can be best appreciated by a brief look at the work of this English philosopher, whose ideas were also developed in the early years of the Industrial Revolution, around 1800. Bentham’s view was that all people are self-interested and are motivated by the desire to avoid pain and find pleasure. Any worker will work only if the reward is big enough, or the punishment sufficiently unpleasant. This view - the ‘carrot and stick’ approach - was built into the philosophies of the age and is still to be found, especially in the older, more traditional sectors of industry. The various leading theories of motivation and motivators seldom make reference to the carrot and the stick. This metaphor relates, of course, to the use of rewards and

penalties in order to induce desired behavior. It comes from the old story that to make a donkey move, one must put a carrot in front of him or dab him with a stick from behind. Despite all the research on the theories of motivation, reward and punishment are still considered strong motivators. For centuries, however, they were too often thought of as the only forces that could motivate people. At the same time, in all theories of motivation, the inducements of some kind of ‘carrot’ are recognized. Often this is money in the form of pay or bonuses. Even though money is not the only motivating force, it has been and will continue to be an important one. The trouble with the money ‘carrot’ approach is that too often everyone gets a carrot, regardless of performance through such practices as salary increase and promotion by seniority, automatic ‘merit’ increases, and executive bonuses not based on individual manager performance. It is as simple as this: If a person put a donkey in a pen full of carrots and then stood outside with a carrot, would the donkey be encouraged to come out of the pen? The ‘stick’, in the form of fear–fear of loss of job, loss of income, reduction of bonus, demotion, or some other penalty–has been and continues to be a strong motivator. Yet it is admittedly not the best kind. It often gives rise to defensive or retaliatory behavior, such as union organization, poor-quality work, executive indifference, failure of a manager to take any risks in decision making or even dishonesty. But fear of penalty cannot be overlooked. Whether managers are first-level supervisors or chief executives, the power of their position to give or with hold rewards or impose penalties of various kinds gives them an ability to control, to a very great extent, the economic and social well-being of their subordinates. When it comes to employees, the Carrot and Stick Policy has been practiced from time immemorial and in various forms. A lot of things that go by the name of incentives,

rewards or appreciation essentially form the carrot, which is dangled in front of employees to induce certain desirable behaviors. The boss promising his subordinates a trip to Hawaii if they achieve their annual sales target is a kind of carrot. This situation is pretty similar to another simple case where a mother promises her son an extra scoop of his favorite ice cream if he completes his homework. It is just that in a corporate scenario, carrots are quite discreet and sophisticated. However, if you took the time to ponder over the principle of inducement, it is quite the same as in the story involving the donkey. Carrots are the more desirable and acceptable part of the Carrot and Stick Policy. The stick approach deals with the concept of penalizing undesirable behaviors. For instance, a boss who notices a couple of employees slacking off on the job and spending huge amounts of time at the canteen, could use the stick and threaten disciplinary action and censure against such employees. In many cases, the stick may not be the actual punishment but just the promise of punishment in case of non-compliance. The stick approach acts as an effective deterrent to unacceptable conduct and behavior that the company would like to keep at bay with immediate effect. This is similar to a mother threatening to complain to a boy’s father if he refuses to do his homework as a means of ensuring compliance. The ‘stick’ or fear is a good motivator and when used at the correct times can be very helpful. In that context, fear has always been the ‘convenient’ choice of Malaysian managers and organizations. When all else fails, the stick approach is somehow most attractive as it usually produces instantaneous compliance and hence immediate results. Fear is also attractive as in the short term; an employee’s performance may be improved without any need for incentives or financial remuneration. Fear however has its weaknesses in that an organization motivated by fear is prone to mutiny. It can also be stressful for employees. It is extrinsic, which means that the motivation only works while the motivator is present. When the motivator goes, the

motivation also usually ceases. Fear is also only useful on a short-term basis, as it needs to be applied in ever-increasing doses. In a worst case scenario, fear motivation can backfire and could even lead to cases of sabotage. On the other hand, people contribute or become more productive because they are offered incentives i.e. the carrot approach. The major advantage with this is that it can work very well as long as the incentive is attractive enough. A good illustration of this concept is by using the well-known analogy of a donkey with a carrot dangling in front, and with a cart behind. In this instance the carrot serves as the incentive. However, the carrot will only serve as an incentive if: The donkey is hungry enough. The carrot is sweet enough. The load is light enough. A combination of the above. If any of the above is not satisfied, then the carrot will not serve as an incentive. On the assumption that the conditions are satisfied, there is still the question of letting the donkey take a bite of the carrot from time to time, otherwise it is going to get discouraged. A new scenario will then develop in that if the donkey gets to eat the whole carrot and is now not hungry anymore; putting another carrot in front of it will not serve as an incentive, until it gets hungry again. This is very often seen in organizations where salesmen on meeting their quota, stop working as their motivation is only limited to meeting that target. Once the donkey has eaten the carrot, the next carrot may not be as attractive an incentive as the first. On the other hand changing the incentive to another vegetable may not necessarily motivate unless the donkey perceives it as a better incentive than the carrot. This is another very important element in motivation and that is the reward must be perceived as attractive enough. Otherwise it will not serve its purpose effectively, and may in fact backfire. For example, if someone is elected the employee

of the month and is then given RM 10/ (?) as a reward, this will serve to de-motivate as it is considered to be below perceived expectations.

IS MONEY THE BEST ‘CARROT’? There is also the often asked question of what is the best ‘carrot’? The obvious answer to this seems to be money. People need money to feed, clothe, and house themselves and their families: this being the basic assumption of Maslow’s theory. Hence, organizations have always based their motivational schemes on this premise that the more money you give to employees, the harder they will work. But is this true? In her article ‘Managing People: Lessons from Matsushita Konosuke, “ Professor Etsu Inaba of the Asian Institute of Management, spoke of a survey that she conducted of middle managers working in well-managed companies in four Asian countries i.e. Malaysia, the Philippines, Thailand, and Indonesia. All the respondents of this survey received salaries slightly higher than the industry average. They could join their company’s competitors at salaries of between 30 and 50% more. When asked ‘What would make you stay with the company you are working for now?” their replies were: Clear growth potential for the company. A career development plan for employees. Professionalism in management. Money was important but it did not appear to be the only concern for the respondents as they were proud of the company that they were working for. The findings of the above survey were complemented by a survey carried out by New York based consulting firm Towers Perrin. In that survey one of the main questions asked was "What is the biggest long-term motivator for you?" The results were different from the survey done in Asia, but money was still not the number one factor. The responses in ranking were as follows: 1. Working for a leader with vision and values.

2. Pay raises and bonuses. 3. Being given greater responsibility. 4. Developing the respect of subordinates and peers. 5. Being given recognition from supervisors and managers. Simply put, money is not the reason why these respondents want to work. In that context, a billionaire like Bill Gates and two generations after him could live very comfortably with all the money that he has at present, and yet he is known to be a workaholic. Quite clearly, a monthly pay cheque is not the main motivation for people like him or the people mentioned previously, to go to work. Money is important, but it does not override the fact that there are other factors that may be better motivators at the appropriate times. In that context, no motivating factor can be looked at in isolation. No factor by itself will serve to motivate perpetually. There must be a combination of factors which when used together will serve to achieve the overall objective of increasing or at least sustaining the motivational levels of employees. Organizations, which recognize this, will be well on their way to having motivated employees.

HARD HRM V/S SOFT HRM Human resource management is a vital function of any organization as people constitute an invaluable asset that needs to be harnessed to further the goals of the organization. Two contrasting theories of HRM have been put forward as an approach to tackle work force in a company that are called Hard HRM and Soft HRM. People are often confused between these two approaches as they lie on two extremes of management. We will differentiate between the two styles of human resource management, hard HRM and soft HRM, with their pros and cons to enable managers to adopt a style that is a good mix of both.

In fact HRM seems to be a vague concept, mostly because of conflicting views and theories proposed to define it. However, the good thing is that whether Hard or Soft HRM, both accept that human resources are critical for the success of any business. An organization gets competitive advantage over others only when it utilizes its human resources effectively, making use of their expertise, keeping them sufficiently motivated to achieve organizational goals. It was Storey in 1989 who elaborated on the Michigan and Harvard models on management (1960). Harvard and Michigan propounded theory X and Theory Y to explain two different styles of HRM. Theory X is a classic distrust approach of management where people are viewed as lazy working on their self-interests. This approach says that the interests of company and employees are completely opposite and it is the duty of management to induce changes in the behavior of the employees to further company’s goals. This is essentially a carrot and stick policy. Theory X focuses on the nature of the organization without paying any attention to the nature of the employees who are labeled as lazy. This approach regards people as machinery and it is the task of the management to make best use of them. This is Michigan model or Hard HRM. Theory Y is totally opposite to Theory X and perceives men as having emotions, feelings and motivations. They are not mere machines and take active interest in work as they achieve personal realization through work. Managers must try to keep their motivation high and enable them to realize their potential. This approach says that people are not inherently lazy and are in fact self-responsible. They can be proactive and creative and management must encourage, and not coerce them to further the goals of the organization. This approach of HRM is called the Harvard model or Soft HRM. Unfortunately, neither of the two approaches of HRM work perfectly as neither represents reality because people can behave in different ways and cannot be

categorized as machines or responsible fellows merely. This means that a good manager must adhere to a style of his own taking some points from Hard HRM and some points from Soft HRM to have an approach that is a good mix of the two and suits his requirements and personality. Hard HRM vs Soft HRM • Hard and Soft HRM are two contrasting styles of HRM • While Hard HRM focuses on the organization, Soft HRM focuses on the interests of the employees • Hard HRM sees people as lazy and merely resources to be utilized to further the goals of the organization. On the other hand, Soft HRM sees people as responsible and having feelings, emotions and motivation • Unfortunately neither approach works perfectly in reality and a good mix of both the styles must be adopted.

A NEW ANGLE Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink is one of those books that makes you wonder why we are having so much trouble getting over the command-and-control/face-time-and-billable-hours business models. In a nutshell -which Pink so gamely prepares for us: "Carrots & sticks are so last century. Drive says for 21st century work, we need to upgrade to autonomy, mastery & purpose." Pink begins with a summary of the pioneering work of Harry Harlow, a professor of psychology, and Edward Deci, another psychologist, who made startling discoveries about human motivation. The first did experiments and research to come up with the motivation theory that the performance of a task can be its own reward. Deci went many steps further in a 1975 book and concluded that instead of the old higher pay incentive, many people have an "inherent tendency to seek out novelty and challenges, to extend

and exercise their capacities to explore, and to learn." Drawing on four decades of scientific research, Pink challenges businesses and institutions of all types to partake in fresh strategies to boost performance. The two traditional spurs to motivation were the biological drive and the reward-andpunishment drive. These two models — dangling a carrot in front of someone or wielding a sharp stick — are no longer viable. Pink lays out seven reasons why these two approaches are severely flawed:

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. External incentives are no longer the name of the game. A growing number of workers, says Pink, are seeking jobs that are creative, interesting, and self-directed. With stout-hearted energy, the author covers experiments by diverse companies to boost performance and to address the human propensity to do something for its inherent satisfaction. These are presented under what he calls "the three elements of motivation — autonomy, mastery, and purpose." With ROWEs (the brainchild of Cali Ressler and Jody Thompson), companies allow employees to show up when they want and keep their own schedule; the only rule is that they get their work done. Another business encourages workers to spend up to 15 percent of their time on projects of their own making. Another technique that encourages self-motivation is "homeshoring" where

customer service reps work at home and at their own pace. Other businesses are creating flow-friendly environments where the creativity and mastery of employees is encouraged. And still others are beginning to take seriously workers' needs to devote themselves to a cause larger than themselves; they are factoring this desire into their organizational life and policies with volunteer programs and the like. How do you treat different parts of a single company differently and then make it all blend together? The examples within the book were often "all in" ROWE, or results-only workplace environments. A company realistically would have to learn how to be more of a hybrid--adapting appropriate managerial behavior to its diverse employees. That could be extremely difficult to implement. Some points to consider are:

1. Times have changed, but most companies haven't. Pink made a great point at the beginning when he posed the question, in 1995, which "encyclopedia" would people expect to survive--Encarta or Wikipedia. Only a very few would've imagined a Wikipedia world back then, where people would voluntarily participate in the crowdsourcing of an online encyclopedia. 1. We have moved from a Motivation 2.0 world (rewards and punishments) to a Motivation 3.0 world (inherent satisfaction in the work itself). In other words, routine tasks may still benefit from incentives (i.e. Motivation 2.0); but for creative ones, incentives can have a limiting effect (i.e. Motivation 3.0) 2. There are three elements to Motivation 3.0: Autonomy, Mastery & Purpose.

Autonomy

An example of a company "getting" autonomy is Google, which has 20 percent time-where engineers are free to work on anything they like. Some of the products that came out of 20 percent time are gmail and Google news. 

Zappos CEO Tony Hsieh looked even deeper into autonomy: "Studies have shown that perceived control is an important component of one's happiness. However, what people feel like they want control over really varies, so there's not just one aspect of autonomy that's universally the most important. Different individuals have different desires, so the best strategy for an employer would be to figure out what's important to each individual employee."

Mastery

Under mastery, his discussion of learning French was quite illuminating. Learning French to pass a test is not the same as having a goal of speaking French. Both can fuel achievement, but only one leads to mastery. Seems in the latter, the goal is to learn; in the former, it's to prove you're smart. 

Mastery happens when people get in the "flow." But, Pink cautions, "As wonderful as flow is, the path to mastery . . . is not lined with daisies and spanned by a rainbow. If it were, more of us would make the trip."

Purpose Not too many notes in this section, because this seems to be what we've been hearing for years: People want a purpose-filled life and work. For the first time, this made more sense as a feasible goal because Pink couples it with the other two concepts of autonomy and mastery.

One thing this made clear is that there is a huge mismatch between what science knows and what business does. Yet whenever there is a gap, it means there is opportunity. The companies that understand how to motivate the workers of tomorrow will be the ones that "drive" us forward.

CONCLUSION Organizations and managers who have the knowledge and skills to motivate employees will always be a step ahead of their competitors; as well motivated and happy employees are invariably easier to manage and thus more productive. The question is why is this situation so difficult to achieve? Perhaps the answer is that most organizations, in the process of motivating their employees have paid more attention to the tangibles rather than the non-tangibles. The trouble with tangibles is that like the carrot, its attractiveness wanes with time and you have to provide more and more attractive incentives. At the end of the day, a word of praise from the Head of Department can mean more than tangibles like paid holidays. If only organizations and managers can reconcile and complement their tangible rewards with the intangibles? That would surely be a winning combination. Perhaps herein lies the long sought after secret to motivation.