Employee Motivation – It takes more than a Carrot and a Stick

Carrot & StickReward and punishment is a topic that is as old as the human race. Theories on motivation at work have evolved from Frederick Taylor’s 1900’s study on the impact of pay on worker performance, through the American psychologists B.F. Skinner’s 1940 theory on behaviourism, to Maslow’s hierarchy of needs which he developed in the 1960’s. These studies were all suited to the ‘Industrial Age’, an age which thrived on reducing variation, improving efficiency and establishing control. However we are now in the ‘Information Age’ and we need to learn some new rules of the game.   The ‘Information Age’ demands new thinking on how we motivate as today’s employees are more connected, more mobile and creative organisations are developing people policies that accept this new reality.

I was interested to read in the Jan 2014 Harvard Business Review piece by Sheryl Sandberg and Reed Hastings how they shaped the culture at Netflix and in the process began to reinvent HR.  They recognised in their people policies thatNetflix logo being at work is more a state of mind than anything else and is de-coupled from time and place. The ideas they deployed were simple and elegant and included; only hire, reward and tolerate fully formed adults. Then you can ask people to apply logic and common sense instead of formal HR policies designed to control and punish. For example the Netflix expenses policy is 5 words long and reads ‘Act in Netflix’s best interests.’ They also abolished overly structured formal performance reviews, which if we are honest with ourselves have become ritualistic form filling exercises that plague both managers and HR professionals alike and in some organisations have become an industry in themselves. Netflix replaced these with a policy that simply states tell the truth about performance. Institute a simple 360-degree discussion between people that creates some insights what they should start, stop, do more and do less. Netflix realised that managers own the job of creating great teams and leaders own the job of creating a great company culture and equipped them to do a great job in both areas and got HR out of the way!

Recent studies on employee motivation by Dr’s Edward Deci and Richard Ryan at the University of Rochester in the USA have begun to develop a new theory that turns traditional employee motivation ideas on their head. Their Self Determination Theory, or SDT for short, shows that effective leaders do not seek to control their employees performance using external factors such as cash and punishment, they instead look to satisfy three basic psychological needs that exist in us all. Their research has shown that external motivation such as bonus payments or threats of punishment has a negative impact on motivation and can undermine long term performance as it makes it difficult for an individual to be collaborative and creative and therefore hinders the process of solving complex problems.   Meeting the internal needs of the individual occurs when an individual is undertaking an activity they find inherently satisfying or are completing an adult task as part of a supportive team. This form of motivation produces sustainable performance improvement.


3 needs slidesThe three basic psychological needs that we all share are:

Relatedness – the need to collaborate with like-minded people who I respect and who respect me;

Competence – I need to be valued for my skills, knowledge and experience; and

Autonomy – I need to have some choice in how I do my work.   SDT shows that leaders can get the best from their people if they meet these three basic psychological needs when they are seeking to motivate.

At Sensei we have incorporated these needs into our ‘Breakthrough Coaching’ approach. In this approach we help leaders consider 4 areas to enable them get the best from their people.

  #1 – Create a motivational workplace – there are three basic skills for a leader to master here. The first is to listen and ask great questions so they can adopt the other person’s perspective and see the world through their eyes. See what they see and feel what they feel. The second skill is to communicate suggestions and directions in an ‘informational’ way that explains the ‘why’ and leaves room for the ‘how’ to be developed by the person themselves. The third skill is to be creative and help the person generate opportunities for different choices they can take.

#2 – Give timely performance reviews – when reviewing performance offer feed-forward advice rather than feed-back comments and do this in a timely manner. This avoids rationalisation about events that are history and cannot be changed and encourages actions in the future that still can be considered and taken.

#3 – Develop latent capabilities and talent – explore and understand what makes people tick. Remove the work mask and get to the real person below and see if you can match their interests to the needs of the organisation. Tease out what capabilities need to be developed and help people leverage their interests and talents to great effect by matching their interests with the needs of the organisation.

#4 – Offer rewards and recognition – rewards do have a place in motivating people so long as they are linked to the three basic psychological needs and appear fair and appropriate to the person involved. Recognition is a more powerful motivator so long as it is genuine, timely, interactive and frequent.

As a society we have had hundreds of years to work on managing industrial firms, so a lot of accepted motivation and people practises are centred in that experience. We are just beginning to learn how to motivate in the Information Age where knowledge is a commodity and capability to learn trumps many years of experience. As we enter this new age we have to invent some new rules and as Albert Einstein said once new rules appear ‘You have to learn the rules of the game. And then you have to play better than anyone else.

Good luck!   Malcolm Follos .