The Carrot Principle


Roberto Scaramuzza - Linkedin profile

Roberto Scaramuzza – Linkedin profile

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, most probably that they have a great culture that is full of recognition.

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.

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