Carrot and Stick

It is unknown for sure where this term was first used, although some believe it was coined in the 1700s

during the Seven Years’ War. In business today, the stick approach refers to “poking and prodding” to get

employees to do something. The carrot approach refers to the offering of some reward or incentive to

motivate employees. Many companies use the stick approach, as in the following examples:

• If you don’t increase your sales by 10 percent, you will be fired.

• Everyone will have to take a pay cut if we don’t produce 15 percent more than we are currently

producing.

As you can imagine, the stick approach does little to motivate us in the long term! While it may work for

some time, constant threats and prodding do not motivate.

The carrot approach might include the following:

• If you increase sales by 10 percent, you will receive a bonus.

• If production increases by 15 percent, the entire team will receive an extra day off next month.

The carrot approach takes a much more positive approach to employee motivation but still may not be

effective. For example, this approach can actually demotivate employees if they do not feel the goal is

achievable. Has this ever happened to you at work? Some reward was offered, but you knew it wasn’t

really achievable? If so, you know how this can actually be demotivating! Also, if organizations use this as

the only motivational technique, ignoring physiological rewards such as career growth, this could be a

detriment as well.

All the employee satisfaction theories we have discussed have implications for our own understanding of

what motivates us at work.