Carrot vs Stick: Employee Motivational Techniques

What motivates your employees? Many people feel motivated by a system of rewards or some form of competition at work. Sometimes the incentives for doing a great job are financial or managerial. But for others, it’s enough to fulfil a feeling of security or the prospects of growth.

An employee motivation technique addresses the energy, commitment, and creativity they bring to their jobs. But maintaining or increasing employee engagement can be a challenge for any size business. While sometimes, we will entice our team with positive reinforcement – on other occasions, it could take more direct measures to help reinvigorate your team’s productivity.

Two Employee Motivational Techniques: Carrot & Stick

You have a pair of fundamental principles for employee productivity at your disposal. Then, if you choose, you can combine the two equally or place greater emphasis on either the Stick or the Carrot. Both of these can encourage employees to work harder and improve performance.

In short, the Carrot is a reward for complying or achieving a designated action. On the other hand, the Stick is a consequence of failing to achieve an outcome or for non-compliance. When applied correctly and appropriately to their situations, the methods can be effective forms of extrinsic motivations.

Both can lead to positive outcomes, and stimulate future employee engagement. How can they be used to motivate people at their workplace?

Carrot Approach

Soft, indirect power is a subtler way of enforcing an objective. Rather than directly warranting a change, it’s possible to encourage specific actions. This proactive methodology helps not only to motivate but also to underline another goal within your organisation.

There are competing schools of thought on the Carrot approach. On the one hand, a manager can offer a direct incentive, such as a monetary bonus or pay raise. In contrast, it’s also possible to provide employee motivation through greater involvement and empowerment. The team with the highest sales or achievements can, for instance, decide the next company outing or choose how to distribute the training and development budget. Employees feel more energetic when they can decide on something work-related with their manager.

It’s also possible to provide an incentive without any spending, but something of equal value. For example, if the team achieved a group objective, the boss would share a cake they baked themselves or take everyone out for lunch! Celebrating milestones in such a way can increase motivation and employee input. Team members will then associate the challenging work with a pleasurable activity and the team's progress will be a shared goal.

The Carrot approach is often considered one of the best employee motivation techniques, as it has been established that rewards of various kinds keep the employees motivated. Workers who are satisfied with the awards they are getting for outstanding accomplishments are more likely to recommend the workplace to others, too.

How to use it best to motivate employees?

While it’s common in sales divisions, it can apply to other departments too – provided that objectives and deliverables are clearly defined. Set measurable goals for the team members and see, if an incentive program can be applied. Show the employees that you recognize their hard work and celebrate results.

It would help if you were careful not to overdo it though, as a more significant enticement could raise expectations. However, that would bring incentives to the point that it would require continuous increases to achieve the same effect, thus becoming unsustainable. Yes, raising the energy levels of the employees and focusing on the positive is important, but so are the company's finances. Remember to consider the resources that you have, before deciding on a motivational strategy.

Stick Approach

This is a demonstration of hard power and a direct and clear means in its desired objective. Among the two leading employee motivation techniques, it is a reactive and consequential approach to employee actions. Nevertheless, its purpose is motivational. Just as visible progress can be rewarded, some penalties for the employees showing a lack of motivation can also be implemented. You must be fair, but also firm.

The Stick can be wielded as a motivational tool in business, but this, of course, can depend on the context and degree to which you apply it. For example, demonstrating a stricter level of punishment or through consistent use could turn into an intimidation device. Remember not to overdo it, however - if the strategy gets too harsh for the team members, even employee recognition might not solve the problem.

Gentle variants of the Stick approach can invoke a punishment that is neither demotivational nor financial. For example, in one IT company, a poorly performing compiling code programmer was made to wash the office kitchen dishes at the end of the day.

How to use it best to motivate employees?

For it to be efficient, a manager should make clear their intentions behind deploying the Stick approach at the workplace. What’s more, employees must also understand the degree of the measure. Be it in the office, or while remote working, remind the team members what is the reason for such a motivational strategy and how will it benefit them.

As a general rule, the Stick approach should not venture out of proportion to its situation. You need to see the bigger picture and understand that work-life balance is essential, and your employees would not like having it taken away from them. For example, forcing an employee to stay overtime or work during their short break because the other employees work harder is not advised, as it can cause psychological stress and decrease productivity.

In a similar way, permanent employee salaries should not be contingent on a temporary task. A consequence of such misuse would result in employees losing their sense of security, as would the overuse of reactionary measures, which can cause distrust between workers and their management. Maybe your company's human resources department can share ideas for less invasive punishments with you? You can also ask the team members for feedback after some time - they know what they find motivating, and what would affect their performance negatively.

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Situational Examples

I’ll take us through a series of employee motivational techniques. It does not have to be difficult to set some small and measurable goals with proper rewards or punishments - you just need to find out, what will suit your business and the job that your workers do. Let’s explore some realistic scenarios:

Example A: Traditional Supply Company

You are an office supply company with a sales team ranging between the ages of 29 and 39. You would like the team to sign deals with five new clients per month for the next two quarters.


Achieving the sales targets will merit an increased commission on those five sales for those who did the best job.


Management would deduct a percentage of the commission of the employee who had the fewest new clients that month.

Example B: e-Commerce Site

Your fitness food e-Commerce platform aims to increase sales of vitamin supplements by 30% for the next quarter.


Award three best-performing motivated employees a 5-10% bonus from their total sales.


No bonuses are awarded to the remaining team members.

Example C: IT Start-up

Your company is staffed by many junior programmers and interns, aged 21-26. You seek to complete a software project ahead of a set timeframe.


Awarding a 200 Euro gift card for a popular retailer for each member of the team.


No award is given. Instead, management conducts a scheduled review of the work if the project is over the allotted timeline.

How to Set It Up for Employee Productivity

It’s good to remember that the components of the ‘Carrot & Stick’ approach appear together in the same title for a reason. Thus, it implies that you should maintain a balance between the two measures - you should not focus on one of the options only. Combined, they work very well for employee engagement and motivation.

Let one system complement the other, whereby obtaining the reward is as motivating as avoiding the punishment. Then, consider these steps when establishing the employee motivational techniques policy for your team.

  1. Set a goal.
  2. Create an incentive.
  3. Decide who should receive the Carrot.
  4. Outline a consequence.
  5. Decide who should receive the Stick.
  6. Choose your Carrot and stick policy carefully.

Important Considerations When Using Employee Motivation Techniques

In all, these measures are tools deployed to enforce a broader strategy within your company. Therefore, keep in mind that there’s no sense in simply ordering an objective and inflicting punishments.

Ultimately, it’s your demeanour that will say more about your commitment to these motivational tactics. Employees are very attuned to whether leaders have a genuine connection to the work they delegate; therefore, you must demonstrate the same level of enthusiasm.

To do this, you must assess your motivation. For example, does it reflect well on your company, your team, or your work? If you have answered ‘no’ to any of these questions, then it’s unlikely that you’ll be an effective motivator for others.

Your company culture can even determine the desirable rewards and punishments too. For instance, if your team and company place a substantial value on health and fitness, then you may consider a spa day. Likewise, a travel and hospitality company could feature a hotel voucher as a prize. Maybe a team lunch at a restaurant if the team receives excellent feedback from a client?

Avoid Pitfalls and Achieve Success

Above all, with every method, a manager must engage with employees to establish a shared trust. There is, after all, no sense in simply relying on textbook methods and tricks to motivate employees. Instead, be sure to talk with your team to instil the relevance of the work they carry out every day. When people feel stuck in their job and don't realize that what they do is important, remain them that their work is of great value for the company. Show them, that each team member has to have their intrinsic motivation to realize the company's mission.

Ineffective use of the Carrot and Stick approach is liable to backfire and harm the motivations of employees. Consequences can include complacency, disinterest, and even widespread discouragement or diminished morale. When left unattended, such attitudes can cumulate into crises for your company. Show support to all your employees when they compete with each other to avoid being accused of favouritism, and don't focus on the best or worst employees only.

Remember that you should use the Carrot and Stick approaches as a broader, more comprehensive motivational policy. Tailor your employee motivational techniques to that of your company and make them unique to the qualities of your team. Be a great leader, motivate your team using the kind of rewards employees will enjoy.

Finally, be proactive in identifying and solving problems for your employees. Sometimes neither approach is necessary. But if you want these approaches to work, then be sure to know what you’re doing. The Carrot and Stick approach, when applied right, can ensure satisfaction for all parties included.

If you’re interested in learning more about employee motivation techniques, and software that can make this happen – then let’s talk!