LONDON: The carrot-and-stick approach - rewards and punishment - is a long-held theory of motivation. It features in some form or other in many animal training, child rearing, and management methods.
Commentary: ‘Just give me cold hard cash’? How to keep long service awards relevant in the modern workplace? Do employees slack off when the metaphorical carrot is in their hands? Does it give them a further boost? Or do such payments leave employees without any feelings of obligation or inequity, and so do performance levels remain stable?
Together, these two ideas suggest that an incentive payment may periodically bring the costs and benefits of work effort into sharper focus. Much like the receipt of an electricity bill periodically reminds us of the marginal cost of electricity consumption. Reciprocation: Employees are grateful for the bonus, which creates ripple effects. They reciprocate toward the employer by working harder even beyond the rewarded tasks.We put our prediction to the test by analysing the performance of customer-service employees at an online firm in Greece that offered web-hosting services to more than 60,000 customers worldwide.
We found no evidence that employees refocused on the rewarded tasks following the incentive payment. At first blush, this might suggest that the effects of the incentive plan do not derive from reactive responses to received rewards. They might simply derive from employees’ anticipation of future rewards.
Next, phone calls between customer-support employees and customers temporarily increased in duration following incentive payment. And customer-support employees were temporarily more likely to involve back-office technology experts to help improve customer solutions.