The Shadow-side of Carrot & Stick

If you’re in Australia and aware of the Banking Royal Commission, you’d have heard about Let’s Insure, a division of Select AFSL, taking advantage of Aboriginal and Torres Strait Islander people in 2015, by selling them funeral insurance.

It wasn’t the sales themselves that were the issue (although questionable), more the modus operandi of the incentive scheme put in place to ‘reward’ high-performers. Scooters, cruises, holidays to Vegas, all based on earning ‘points’. Turning up late or sick days meant loss of points, yet unethical behaviour had no deleterious effect.

It’s clear that this incentive scheme motivated inappropriate behaviour to the extent that the CEO of Select had to agree under questioning, the behaviour itself amounted to “unconscionable conduct.”

Dan Pink, author of DRIVE – The Surprising Truth About What Motivates Us, notes that Motivation 1.0 was as simple as ‘don’t get eaten’ …

If you’re here, then somewhere in your past an ancestor survived because of this!

Motivation 2.0 emerged after the industrial evolution as carrot-and-stick: you do this for me, I’ll give this to you, which, as Dan Pink notes, worked well … until it didn’t.

We’ve known from numerous psychological research studies for almost 50 years, that carrot-and-stick has a dark side, yet it’s still in use today as an incentive driver.

This diagram below from Ivan Staroversky shows what research has uncovered about carrot-and-stick motivation, and as I read it, items 4, 5 and 7 explain Let’s Insure’s sales team behaviour:

So the question remains: why are businesses still using carrot-and-stick, knowing full well that it more often leads to results that are less than savoury and even illegal in the extreme?

Motivation 3.0, according to Pink, is giving individuals and teams three things:

  1. Autonomy
  2. Mastery
  3. Purpose

Autonomy – over task (what you do), team (who you do it with), time (when you do it) and technique (how you do it).

Mastery – of the role you’re in. What skills do you have yet to attain to master the role, to then add your unique contribution?

Purpose – why are you doing this, what is the purpose behind the organisation you work for, is it making a positive contribution to the world and is your personal purpose aligned with that of the business?

Those businesses that find the above challenging are no doubt operating in a corporate culture where it’s more like an adult day-care centre than a high-performing team.

Pink shows that we’re motivated either intrinsically or extrinsically. We start out life being motivated intrinsically to learn, then our education system gives us gold stars as ‘rewards’, which turn our intrinsic motivation to extrinsic: we won’t do something unless we get rewarded. This then naturally shows up in the adult workplace.

Perhaps assess your own role and the business you either run or work for: is it one where it’s every person for themselves, people watch the clock and need to be constantly extrinsically-motivated, or is it a great place to work with a healthy team environment, high levels of interpersonal communication, achievement, respect and trust?

The single thing that sets the tone for such an intrinsically-motivated culture is leadership. If the leadership itself is not intrinsically-motivated then how on earth is the culture going to be?

If you haven’t read Dan Pink’s DRIVE, then do yourself a favour and grab a copy. It’s a great and inspiring read.

And remember, it all starts at the top ….

Leave a Comment