Does the Carrot and Stick Motivation Model Still Work?

This article is an excerpt from the Shortform book guide to "Drive" by Daniel H. Pink. Shortform has the world's best summaries and analyses of books you should be reading.

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What is the carrot and stick motivation? Is the reward-and-punishment approach to motivation still effective?

Carrot and stick motivation is an old-school motivational approach that involves offering rewards for desirable behavior, and inflicting punishment for undesirable behavior. According to Daniel H. Pink, the author of Drive: The Surprising Truth About What Motivates Us, the carrot and stick approach is still generally effective but carrots (extrinsic rewards) aren’t the main driver of performance. Rather, they act as a “baseline reward” or a “hygiene factor.”

In this article, we’ll take a look at the psychology behind the carrot and stick motivation approach and why “carrots” are ineffective at driving performance.

Do Carrots and Sticks Still Work?

This “carrot and stick” motivation model is still generally effective in the workplace. At a minimum, compensation serves as a “baseline reward” or a “hygiene factor”—if it’s not there, the worker cannot focus. She’ll obsess over how unfair her situation is and be anxious about her financial problems. So high enough financial rewards are necessary for a baseline of motivation.

However, in the long term, extrinsic rewards (e.g. financial incentives) actually decrease motivation. This idea may sound counterintuitive—if you enjoy something when you do it for free, then wouldn’t adding money only make it better?

Daniel Pink argues that rewards require people to forfeit some autonomy—if a person is doing something by herself, she’s fully in control of her behavior. But once she starts doing it for money, someone else is pulling her lever, and she no longer feels fully in control of their lives.

Extrinsic rewards also quash the cognitive dissonance that comes with unrewarded work. Cognitive dissonance works like this—when volunteering, a person subconsciously reasons, “well I’m not getting paid for this work, so if I’m working hard, I must enjoy it.” Once a person starts getting paid, she instead reasons, “well, I don’t really enjoy the work, but it’s fine since I’m getting paid.”

Rewards Encourage Short-Term Thinking

In addition to impinging on autonomy, extrinsic rewards can narrow the focus of our decision making to short-term effects, ignoring long-term benefits.

Researchers found that public companies that devote more resources to quarterly earnings guidance deliver lower long-term growth rates. The causes are unclear but may include:

  • Earnings-obsessed companies invest less in R&D, especially cutting R&D to avoid missing forecasts
  • Companies that focus on short-term growth do so at the expense of long-term stability
  • Companies that focus on quarterly earnings reports do so because they are already in ill health, and they want to continue building confidence

(Shortform note: contrast this with the company Amazon, which famously largely ignores quarter-to-quarter earnings to reinvest into further growth and market domination.)

This short-term thinking is important when rewarding people for activities that are ideally done over the long term, like education and personal health. If students get a prize for reading three books, they may focus more on the short-term reward and less on the benefit of long-term love of learning.

When Carrots Do Work

Pink admits that carrots and sticks do work well in certain conditions.

First, workers need a secure baseline of compensation and work environment. If a worker is constantly anxious about how she’s going to put food on the table, she’ll find it hard to concentrate, no matter how enjoyable the task is.

Extrinsic Rewards for Routine Tasks

Extrinsic rewards work when the task at hand is routine and doesn’t involve creative thinking. Here, rewards don’t threaten intrinsic motivation because there is little intrinsic motivation to be undermined. Imagine doing a routine job on an assembly line.

You can make this work in your favor by promising rewards for work that is dull. For instance, if you need your team to pitch in on package shipping over the weekend, promise a party at the end.

Even better, supplement the reward with these three items:

  • Explain why the task is important. Talk about the larger purpose of the work and how it helps achieve your organization’s mission.
  • Acknowledge that the task is boring. This establishes empathy (“the boss knows what we’re going through”) and helps people understand this is the exception in your working relationship.
  • Allow autonomy in completion of the task. When the task is boring, give people freedom in how exactly to execute the task. 

Extrinsic Rewards for Non-Routine, Creative Tasks

Creative tasks are more likely to be driven by intrinsic motivation, which can be undermined by extrinsic rewards. The author gives a few ways to give rewards without dampening motivation:

  • Try to avoid the “if-then” reward, where you announce beforehand that the reward is conditional on completion of the creative task. Instead, give an unexpected reward given after the task is finished. Because it’s unexpected, the reward is less likely to undermine intrinsic motivation while the task is being completed. 
  • Use nontangible rewards. Instead of cash, give positive feedback, which unlike money can actually increase intrinsic motivation.
  • Provide useful feedback. Be specific and praise effort and strategy, rather than the outcome. For example, rather than saying, “great job, you completed the task like I said,” say “The initiative you took was inspiring, and I like your design choice here.”

All these rewards can increase employee happiness without dampening intrinsic motivation.

Does the Carrot and Stick Motivation Model Still Work?

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  • Why you may be feeling unmotivated and unsatisfied at work and in life
  • Why financial rewards aren't enough to keep employees motivated anymore
  • The three components of intrinsic motivation

Darya Sinusoid

Darya’s love for reading started with fantasy novels (The LOTR trilogy is still her all-time-favorite). Growing up, however, she found herself transitioning to non-fiction, psychological, and self-help books. She has a degree in Psychology and a deep passion for the subject. She likes reading research-informed books that distill the workings of the human brain/mind/consciousness and thinking of ways to apply the insights to her own life. Some of her favorites include Thinking, Fast and Slow, How We Decide, and The Wisdom of the Enneagram.

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