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The Carrot Principle

January 25 2007 - In 'The Carrot Principle - How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance' management consultants Adrian Gostick and Chester Elton explain how organizations and managers can use praise and recognition to motivate their workforces.

The authors base their conclusions on a groundbreaking survey of 200 000 employees in North America. Results indicate that job satisfaction has never been lower. Lack of motivation and disengagement leading to increased turnover represents the most significant uncalculated expense for employers. It is estimated that replacing a staff member can cost up to 250 per cent of the person's annual salary.

Key survey findings include:

  • 65 per cent of respondents report that they weren't recognized at all in the preceding year
  • 79 percent of people leaving an organization report 'lack of appreciation' as a key reason
  • Of those reporting the highest morale at work, 94.4 per cent agree that their managers are effective at recognition
  • Organizations that effectively recognize excellence tend to be more profitable and can have more than three times the return on equity than those that do so the least.

The authors suggest 125 ideas for recognizing employees drawn from interviews with managers around the world. These include:

  • 'On a new employee's first day, set expectations high by planning a small celebration. Then send out an email about the new person and why they were chosen to join the team.'
  • 'Invite an employee to take their spouse on a business trip. Pay for the spouse's airline ticket and extend the trip by one day for some sightseeing.'
  • 'At the beginning of each day, put three coins in your right pocket. Transfer one to the left each time you reward an employee for a behavior that is critical to your goals, your customers, your employees, and your company.'
  • 'How do you recognize a poor performer? Carefully. The idea is to praise even the smallest movement toward valued behavior.'
  • 'Personally deliver your employee's next paycheck to them. Before you hand it over, spend a few moments defining exactly what they contribute to the company. It's never the money that makes a person feel like a million bucks - it's the praise.'

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