Dr. Gitika Dutta (Faculty Member, IIPM Hyderabad) is of the view that a carrot-and-stick policy need not always be resorted to, for building employee loyalty

Managers can, and often do, provide a range of incentivising and disincentivising KITA – bonuses, rewards, rules, work conditions, status – hygiene factors. These will have an effect, but will it be desired and long-term? A resounding ‘no’! Alfred Kohn sums it up neatly: “Do incentives work? The answer depends on what we mean by ‘work’. Rewards, like punishments, are extremely effective at producing one thing, and only one thing: temporary compliance. But carrot and sticks are strikingly ineffective at producing lasting change in attitudes or even behaviours. They do not create an enduring commitment to any value or action; they merely, and temporarily, change what we do.”

Some two dozen studies from social psychology have shown that people who expect to receive a reward for completing a task (or doing it successfully) do not perform as well as those who do not. This has been found with all sorts of rewards, people, and tasks (with the most destructive effect when the task involves creativity). This means that desired changes cannot be achieved by dangling goodies. Organisations need to learn that incentives only work for short-term movement; if you want motivation, do not start here. Can an organisation train its employees to be motivated? No! Motivation comes from within an individual. We do things, or do them well because the outcome is appealing to us. Read More..

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