The Carrot Principle

The Carrot Principle unwraps one of the most in-depth
management studies ever undertaken. Involving nearly 200,000 people over a
ten-year period, it showed that the most central characteristic of any successful
manager is that they offer frequent and effective recognition to their employees
on an ongoing basis. Productivity skyrocketed when managers took a hands-on
approach to constructive praise and gave small, yet meaningful, rewards that
motivate employees.

According to the book, the missing
ingredient in the workplace is an accelerator. This so-called ingredient is
supposed to bridge the gap between untapped potential within teams in the
workplace. The biggest workplace accelerator is purpose-based recognition. As Generation Y slowly makes it into the
workplace, this accelerator is not just a way to drive company success, but
it’s necessary in order for this generation to feel appreciated.

Motivating and encouraging employees to
be successful in their role is just a small part of activating your workplace
to obtain the highest level of productivity. The Carrot Principle, the use of purpose-based recognition to spur
company success, is a great start for managers. According to this in-depth
study, 56% of those who say they have low morale give their manager a failing
grade regarding recognition.

Creating a workplace
culture full of recognition is not only beneficial
to the success of your company, but is a known factor to reduce employee
turnover. As a result, the productivity of your company affects every area of
your business, from stability to public opinion. If your company is listed as
one of Fortune’s Top 100 Places to Work For, I’d be willing to bet that they
have a great culture that is full of recognition.

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Recognition comes in all forms. Having a
yearly review doesn’t make the cut if that’s all you offer your employees.
Productivity is something that needs to be focused on year round, so why not implement
year-round recognition programs? Here are a few suggestions on employee
recognition that are low cost, but go a long way in motivating and encouraging
employees.

Employee
of the Month. Employee of the Month awards is one of
the most common types of reward programs. It’s low cost, and useful when
wanting to engage peers to vote on who they think deserves the recognition and
why. This award can also combine several different areas such as customer
services, sales goals being met, attendance, and leadership.

Customer
Service. As employees who sell products and
services to customers, one of the most important, if not the most important, is how customers are treated. The ROI on a
lifetime customer could mean up to $200,000 for your company depending on the
type of industry. Imagine having 5,000 lifetime customers, which equates to
over a trillion dollars. Now, most companies won’t have customers who lifetime
value equals near $200,000, but in any industry that amount is scalable. The
bottom line is great customer service = returning customer = lifetime ROI.
Rewarding employees based on this criterion doesn’t take much and has a lasting
impact on your business.

Out
of the Box Rewards. Things such as giving out a
certificate for a 2 hour lunch, bringing souvenirs back from a trip for
employees, hiring a limo to pick up employees and take them to lunch, improving working conditions with new office furniture, or if you want to get real
creative, hiring a maid for an outstanding employee for a month. The reward in
itself doesn’t have to be big, but putting thought into rewarding your
employees goes a long way.

The Carrot Principle is a must-read and
will open your eyes to the power of recognition. It breaks down the
characteristics of an effective leader, successful company recognition
programs, and how to succeed in business through investing times in your
employees.

Have you thought of some creative way to
motivate and engage the employees in your office? Share your thoughts with us.