Carrot and Sticks: What Incentives Really Work?

Linda Rising, Independent Consultant

It's surprising how little of the research around incentives has made it into regular management practice. Widespread belief is that the debate is first about carrots vs. sticks and then about the kinds of carrots or sticks. Cognitive scientists, however, suggest that carrots result only in temporary compliance. Rewards, like punishment, are ineffective in producing lasting change. Numerous studies show that offering incentives is not only less effective than other strategies but often proves worse than doing nothing at all. Organizations seem to focus on the effects of variations in incentives and not on whether performance-based pay has a real effect on performance levels. Managers often use incentives instead of giving workers what they need to do a good job: treating workers well, providing useful feedback, offering social support, and allowing room for self-determination. Linda Rising describes surprising studies to show what truly works to bring out the best in people.

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