5 Reasons Why the Carrot is Better Than the Stick

When it comes to motivating your employees, there are two main methods of achieving high levels of productivity: the carrot and the stick. Whilst using the ‘stick’ method typically sees workers having to meet specific KPIs (key performance indicators) or risk facing the sack, losing a portion of their bonus or working overtime to deliver what you need, the ‘carrot’ method instead provides workers with specific rewards. These rewards may be end of year bonuses after annual reviews and smaller incentives throughout the year. As suppliers of many reward-based corporate hampers, we thought we’d take a look at why the carrot method of motivation is proving to be so effective in the workplace.

1. Sustainable drive all year round.

With a yearly bonus often highly dependent on an annual review, there is typically a flurry of activity in the months immediately before and after reviews as employees seek to prove how much they’ve accomplished within the company. Six months either side of a review, however, there is little incentive for employees to push themselves harder to meet a project’s deadlines. A smaller reward provided at several points in the year is a great way to motivate employees in the meantime. They will be encouraged to reach their goals and work at a sustained high level all year round. Be sure that the rewards are still large enough to encourage employees though – incentives that are too small are unlikely to make a difference.

2. A healthy culture of competition.

Employees are always striving to be at the top of their game, so give them a chance to shine! Healthy competition can spur both individuals and teams to achieve their goals and encourage them to work harder when they know they have competition. However, we must remember, when it comes to competing against others not everyone will emerge a winner. A friendly rivalry between two sales teams can be a good idea, but in a situation where different segments of the business are competing against each other, perhaps for a larger share of the company budget, animosity can quickly spread throughout the company. Avoid the potential negatives of promoting competition within a business by balancing it out with specific rewards for the teams.

3. It’s fun and interactive.

Varying rewards means that there is a different incentive from one month to the next. Show off your appreciation for your team with a personalized gift basket one month, and then treat them to an afternoon of outdoor activities the next. An individual reward followed by a team reward is sure to act as the perfect incentive for all your hard work, while also building employee relations and teamwork within the company.

4. Creates a more communicative culture.

If something goes wrong, will your employees always let you know? Realistically, they may be more focused on their own workloads, but without a specific forum to initiate conversation on, it can be hard for them to say so. Knowing that there is a form of measurement to their activity means that they’re more likely to voice concerns. Sometimes initiating a Kaizen system (Japanese for continuous improvement) is helpful to implement here as well as putting up a box in the break room where team members can submit suggestions on how to improve the business. This not only gives the managers helpful advice on what the staff thinks is missing from the company, but also helps to empower employees, who are delighted when one of their suggestions is implemented.

5. Happier employees are more likely to stay with your company.

Although this may come as no surprise to you, let us not forget the importance of this statement: with happier employees, there will be far less employee turnover. Factor in the high costs of recruitment and the time out managers will have to take in order to interview potential new hires, and this will save a lot of money. This is without even considering the benefits of having a team who have worked together for a long time, are happy to work together, and know the company inside out.

What do you do to motivate your employees?

Sarah Cumber is the Brand Communications Manager at Virginia Hayward, a company providing Christmas hampers and corporate gifts who supply some of the largest names on the high street.

About Deborah Sweeney

Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best.