Carrot & Stick Leadership: Why It’s Not As Effective As You Think
As a leader, have you ever seen your group stuck in a rut? Did you sense members of the group losing motivation? Are your followers de-motivated because of the pressure and stress in an organization? Maybe your followers have gone into a lull. Have they lost their edge? Are they settling for mediocre performance? Are they failing to give you their best effort? In any of the above situations, how would you turn things around if you were their leader? Most of you probably considered using a form of transactional leadership more commonly known as the carrot and stick. Did you know that using these tools is probably the worst thing you can do as a leader?
On the surface, carrots and sticks seem like an effective tool to rehabilitate and motivate followers, but there are repercussions to the use of transactional leadership. While followers will most likely comply with carrot and stick leadership, what goes on psychologically will surprise you. In a classic study referred to as the candle problem, scientists found that incentives stifled creativity and prolonged the time people needed to complete certain tasks.[1] The same logic applies to sticks as well. Enron had a notorious rank and yank peer review committee system where each employee was evaluated on formal feedback categories.
Although the program was designed to align employees with Enron’s strategic objectives, it quickly became a means to inhibit contradictory perspectives. The rankings were subjective and leaders adapted the feedback ratings to threaten, coerce and punish. If an employee was ranked in the bottom 15%, the employee was immediately transferred to an area for non-performers and given two weeks to find another job in the company or be fired.[2] What effect did this style of leadership have on motivation and/or morale?
Transactional leadership was a more effective tool in the past when decisions and performance were routine-based. As the world around us has grown more complex, we are requiring our followers to do more than just follow our commands. We are asking them to think for themselves and to make correct decisions. General Stanley McChrystal in his book Team of Teams claims success against Al-Qaeda came only after empowering troops to make more of their own decisions. Using the carrot and/or stick are conventional methods of motivation that are no longer effective. Although we are still drawn to these techniques because of familiarity and ease of implementation, a leader needs to adapt to the needs of their followers.
Twenty years ago, you could find a pay phone every few city blocks and cell phones were the size of a small suitcase. Today, you would have great difficulty finding a payphone and cellphones are hand-held devices capable of doing as much as most desktop computers. If we can move out of our comfort zone and adapt to massive technological changes, then shouldn’t we be able to adapt to what best motivates our followers?
[1] Pink, Daniel. The Puzzle of Motivation, Ted Talk. Taken from the Internet on August 7, 2015 at http://www.ted.com/talks/dan_pink_on_motivation?language=en#t-792569
[2] Free, Clinton; McIntosh, Norman, & Stein, Mitchell (2007). Management Controls: The Organizational Fraud Triangle of Leadership, Culture, and Control in Enron, Ivey Business Journal, July/August 2007. Taken from the Internet on August 7, 2015 from http://iveybusinessjournal.com/publication/management-controls-the-organizational-fraud-triangle-of-leadership-culture-and-control-in-enron/
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