On The Importance of Both Positive and Negative Reward Balance:

The Dichotomy Between Leveraging Carrots vs Sticks:

Whether the area of application for a reward system is focused on the workplace, parenting, or simply self-improvement/behavior change, you will find a plethora of "best practices" and approaches from the endless amount of "experts" in this space.

Yet, while maintaining a neutral perspective when retroactively looking at the application of these reward systems, depending on the individual mentality of the specimens of these experiments, most observers can easily come to the conclusion that the science of reward systems is far from "Black and White" and they most often require a blend of both to establish effective change.

Is It Better To Be "Feared" or "Loved"?

Niccolò Machiavelli was a political theorist from the Renaissance period. In his most notable work, "The Prince", he writes, "It is better to be feared than to be loved, if one cannot be both."

Yet, ironically, some of the best leaders in history were BOTH. They were feared and loved... which is what made them most effective in their leadership endeavors.

Humans are wired to seek reward, but they are undoubtedly driven to avoid pain. The key is finding the people for your team who harbor the appropriate amount of internal necessity so they simply need the specific boundaries and direction as opposed to the "motivation" required to "do the job well".

I was always taught (this is subjective, of course) that is was preferable to have a horse that needed to be reigned as opposed to lamenting over one that consistently needed to be whipped.

(Note: In the semantical realm of "Fear", some experts in this area prefer to use the more politically correct term "Respected." If you are in this camp, remember: if some of your people don't adequately respect themselves, what on Earth makes you believe that without appropriate consequences they will significantly respect YOU?

What Is A "Reward System"?

For the sake of clarity, what I mean by "Reward System" is simply:

• Basic Human Incentives:

  • Carrots: (Bonus, reward, recognition)

  • Sticks: (Write-ups, Consequences, Termination)

Behavior change, historically, has been easier to describe for most humans than it is to implement effectively. When we strip down the type or severity of the rewards or consequences to their simplest form, we are inherently attempting to disrupt and navigate behavior.

James Clear (Author of Atomic Habits) lays this framework out as simple as possible:

The Real Problem with Applying Reward Systems:

Most leaders prefer to view rewards or punishments through their past and their own skewed meaning of them as opposed to either viewing reality objectively (testing and seeing what actually works in the real world) or by choosing to deny what the research actually shows.

When assessing some of the greatest leaders in history and even successful present day entrepreneurs, what you will find is that they have figured out how to leverage a specific blend of both positive and negative rewards that has resulted in not only the expectation they desire to be met or upheld, but they have also ingrained these expectations into their culture (which relieves a ton of burden from the leader in having to perpetually and manually steer the "motivational ship").

What I won't do, in this article, is explain or expose "Motivation" as the mythical, seductive trap that is actually is. Most of you that have read or heard my thoughts on this already know my stance here. I prefer, and highly encourage my CEO's and health clients to replace the word "motivation" with "necessity" in order to effectively rewire their brains based in reality and not the fictional fairytale in which pop-psychology would prefer us all to exist.

"Most people would prefer to have a problem they can't solve versus implementing a solution that they don't like (or agree with)." - Dr. Lee Thayer

While I won't be attempting to lay out an exact framework for business leaders to implement a reward system within their own organization or culture, below I will line out certain criteria and pieces that the highest performing organization's have utilized in order to raise the level of performance in their own businesses and some of the reasoning as to either why they are effective or how their absence prevents long-lasting improvement.

What Most Successful Organizational Reward/Punishment/Incentive Programs Contain:

Like I mentioned prior ,while this isn't an article on HOW to set up the most effective application of "carrots" or "sticks" for your organization, I will attempt to provide the next best thing: which is the MINDSET of you as a business owner as it pertains to punishing or rewarding the right behaviors with the sole focus of raising the level of performance of your team.

1. Your Current Culture and Level of Organizational Performance is a direct reflection of YOU as the Leader (Fix Yourself First)

"Want to know what type of organization you deserve? Look at the one you have." - Dr. Lee Thayer

• Monkey See/Monkey Do: Your people (much like children) are watching what you DO and what you SAY. That is all we have to go off of as humans. And while no one can hear your thoughts, they partially hear your words, yet absolutely mimic your actions. The premise is simple: "You Get More Of What You Tolerate".

• If you state and habitually Act, Speak, and Execute per your true personal and organizational values, you won't attract the wrong kind of employees in the first place. (which saves you a shit ton of time and money throughout the journey due to the avoidance of a faulty hiring process.)

2. Create, Implement, and Adhere to an Established Set of Company Core Values. Then Set Up Your Rewards and Punishments BASED on those Specific Values

• Step one is to actually create a meaningful set of Core Values for the organization. These need to be TRUE values that you feel and embody personally and require for your people to adhere to as well. (do NOT follow the trend of "feel good" values or ones that look good to a publicist. Make sure they MATTER)

• Next, establish precisely what actions "following/exhibiting" and "not following/not exhibiting" these values looks like.

• Then create and document which rewards are attributed to which actions and which consequences will be distributed for not adhering to workflows, conduct, culture or policies. You need to have an agreed upon and implemented consequence policy per violation (upfront). This is the biggest flaw I see in most businesses. Everyone loves creating and distributing the treats, but no one wants to be the bad guy an hand out the punishments.

3. Both Carrots and Sticks are Necessary:

• Most people in our current culture don't like the stick and claim to only need a reward for adequate motivation... BUT reality shows that both are needed.

• When you don't have the "stick", human nature kicks in and most people will abuse the hell out of you.

  • You give an inch and they take 100 miles

• Once you set up both rewards and punishments, you MUST ENFORCE both. Inconsistency breeds chaos.

• The Leader has to learn through the process where they themselves are too soft and where they are too hard. Then they must adjust accordingly.

• Cutting a problematic employee or rewarding an employee sends a SIGNAL. That Signal is much more powerful for the culture than the reward or stick for the individual employee receiving it directly.

• Whichever Reward/Punishment standards and boundaries you choose for your company, they have to be the same for everyone. You mustn't treat those you like better and those you dislike worse. It is all equally based on the standards and rules set by you and agreed to by them. (Note: this is not a democracy. There is no vote. Consensus can be direct through the hiring process dialogue or indirect based on accepting their role)

Your Organizations reward system can perhaps be thought of similar to boundaries and guard rails such as gutters on a bowling lane or curbs on either side of the street.

You can't just rely on the carrot (the left gutter) or the punishments (the right gutter). The goal/premise of the system is to keep the team heading down the lane (within the boundaries) towards the goal/mission/vision (i.e. the pins).

If you just have the carrot, the gap between your high performers and your average or low performers grows greater and greater, which negatively disrupts the culture and kills the positive incentive to perform better than the low performers. Or you will get more of a "gamification" silo where your inmates begin directing the asylum in order to maximize their own selfish gain... with complete disregard for the great and worthy purpose of the organization.

Yet, with only the punishment, you create a dictator-driven concentration camp of "bare minimum performance" prisoners.

The "Grey Area" of Incentives and Consequences:

In summary, leadership isn't for the light-hearted. You can't always be the Hero, nor always be the Reaper. The art lies in knowing yourself and your people, while utilizing both rewards and punishments as guidelines to herd the cattle through the shoot of improved organizational performance.

Unfortunately, there are no recipes in this kitchen. It requires GRIT, determination, and perpetual trial and error in order to continue to perfect the right blend of both praise and pain to keep the team headed towards the "promised-land."

• In which area is your organization strong in regard to rewarding or punishing?

• Where is it weak?

• What would your people say?

• What do your results show?

• ... What are you going to do it about it?