Carrot vs Stick: Employee Motivational Techniques

What motivates your employees? Sometimes the incentives 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 the other hand, 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 at your disposal. Then, if you choose, you can combine the two equally or place greater emphasis on either the Stick or the Carrot.

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.

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 to not only motivate but also to underline another goal within your organisation.

There are competing schools of thought in 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.

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!

How best to use it?

While it’s common in sales divisions, it can apply to other departments too – provided that objectives and deliverables are clearly defined.

It would help if you were careful not to overdo it, 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.

Stick Approach

This is a demonstration of hard power and a direct and clear means in its desired objective. Among the two leading employee motivational techniques, it is a reactive and consequential approach to employee actions. Nevertheless, its purpose is motivational.

The Stick can be wielded as a motivational tool, but this, of course, can depend on the context and degree to which you apply it. For example, by demonstrating a stricter level of punishment or through consistent use, it could turn into an intimidation device.

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 best to use it?

For it to be efficient, a manager should make clear their intentions behind deploying the Stick approach. What’s more, is employees must also understand the degree of the measure.

As a general rule, the Stick approach should not venture out of proportion to its situation. In this instance, 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.

Situational Examples

I’ll take us through a series of employee motivational techniques. 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.


Management would subtract a percentage off the employee’s commission with the lowest number of new clients for 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 the three best-performing employees a 5-10% bonus from their total sales.


No bonuses awarded to the remaining employees.

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 given. Instead, management conducts a scheduled review of the work if the project is over the allotted timeline.

How to Set It Up

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.

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

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 towards 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.

Avoid Pitfalls and Achieve Success

Above all methods, 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.

Ineffective use of the Carrot and Stick approaches are 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.

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.

Finally, be proactive in identifying and solving problems for your employees. Sometimes neither approach is necessary. But if you want for them, then be sure to know what you’re doing.

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