In 2016, Wells Fargo fired more than 5,000 employees who learned the hard way that carrots don’t work — at least not in the long run. Decision-makers tied a substantial piece of these employees’ compensation to steep sales targets and made reaching them a condition of continued employment. They saw movement, if not true motivation. Even when launched with the best of intentions — which the leaders at Wells Fargo did not display — evidence shows that carrots-as-motivators ultimately fail. Incentives designed to spur workers to do their best can push them to engage in unethical behavior — to do their worst.
As much as carrots don’t work, we shouldn’t conclude that sticks-as-punishment work any better. We have centuries of evidence that punishment does not even deter crime, much less motivate good behavior. In fact, when public executions existed in Europe decades ago, researchers observed that crimes actually increased. How bizarre that a person witnessing the execution of a pickpocket would engage in the very crime for which the criminal was being executed! Obviously, punishment acts as a deterrent in that the same person who is incarcerated or executed no longer has the capacity to commit the crime, but not even the fear of these penalties seems to reduce crime.
If carrots and sticks don’t motivate, what does? What causes us to do the right thing, even when doing something else would be easier, more fun or more lucrative? Usually our integrity moves to the front of the line in these situations. When we violate our own code of conduct, we punish ourselves with guilt. Sometimes the fear of that guilt will cause us to avoid the problem behaviors, but I hesitate to say it motivates us to behave ethically. Usually something else plays a role.
For instance, in 1980 I taught British Literature at Villa Duchesne, a Catholic girls school in St. Louis, and I earned the whopping sum of $9,000, which was based on having a master’s degree and several years of experience. As low as this figure may seem by today’s standards, it represented a significant increase over the $6,000 salary I received my first year of teaching in a public school on the Mexican border several years prior. Obviously, financial carrots never motivated people like me.
The tuition at the girls school was $2,000 in 1980 — an amount I imagined only the wealthiest could afford. Yet, that tuition didn’t cover the cost of hiring substitutes for teachers who called in sick. We got sick at about the same rate that everyone does, but we hesitated to call in because we knew the principal would ask our colleagues to cover our classes. We all had a full schedule, so volunteering to cover someone else’s class put an unwelcome burden on a person’s friends — the other teachers who stepped up.
Today, absenteeism continues to present problems for St. Louis public school teachers, even though they earn 12 sick days a year and two personal days, which amounts to almost three full weeks of paid leave per teacher. Most of us at Villa didn’t take even one sick or personal day during the year, even though we wouldn’t have been penalized if we had, and there was no reward if we didn’t. So, what was different? It must have to do with our motives.
Teachers’ unions negotiate contracts that guarantee days off for each teacher. It’s nothing personal. They (some unidentified entity) pay for the sick days of teachers who have benefits. No relationship exists between the teachers who decide to use a sick day and the faceless creatures who cut the paychecks. No one calling in sick inconveniences a friend by asking for a favor. It’s the job of someone working in the school district to find a substitute, and a budget that some other faceless person oversees pays that substitute. It’s not personal, and in many cases, it’s not even human.
Reward and punishment didn’t play a role in our motivation at Villa. We wanted to do the right thing, so we let our integrity guide us. Then, we respected and valued the relationships we had built with each other, so we didn’t want to do anything to tarnish them. Maslow would say our need to feel included motivated us to behave ethically and professionally, and I suspect he would be right. But why did we go into teaching in the first place? Maslow would suggest it had to do with our need to do something important — to strive for self-actualization.
Leaders who use carrots and sticks to make their tough calls often start with good intentions. They imagine their strategies will promote good deeds, restrain unproductive behavior, boost creativity and generally improve things. However, the Wells Fargo disaster and the teacher absenteeism problem illustrate that carrots and sticks not only don’t work, they also don’t explain our motives for doing the right thing.Published by Conselium Executive Search, the global leader in compliance search.