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240 PART 4: THE LEADER AS A RELATIONSHIP BUILDER
3. Extrinsic rewards assume people are driven by lower needs. The perfunctory
rewards of praise and pay increases tied to performance presumes that the
primary reason people initiate and persist in actions is to satisfy lower
needs. However, behavior is also based on yearning for self-expression, and
on self-esteem, self-worth, feelings, and attitudes. A survey of employees
at Fortune’s “100 Best Companies to Work For” found that the majority
mentioned intrinsic rather than extrinsic rewards as their motivation.
Although many of these workers had been offered higher salaries elsewhere,
they stayed where they were because of such motivators as a fun, challenging
work environment; flexibility that provided a balance between work and
personal life; and the potential to learn, grow, and be creative. Offers of an
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extrinsic reward do not encourage the myriad behaviors that are motivated
by people’s need to express elements of their identities. Extrinsic rewards
focus on the specific goals and deadlines delineated by incentive plans rather
than enabling people to facilitate their vision for a desired future, that is, to
realize their possible higher need for growth and fulfillment. 41
4. Organizations are too complex for carrot-and-stick approaches. The current
organizational climate is marked by uncertainty and high interdependence
among departments and with other organizations. In short, the relationships
and the accompanying actions that are part of organizations are
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overwhelmingly complex. By contrast, the carrot-and-stick plans are quite
simple, and the application of an overly simplified incentive plan to a highly
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complex operation usually creates a misdirected system. It is difficult for
leaders to interpret and reward all the behaviors that employees need to
demonstrate to keep complex organizations successful over the long term.
Thus, extrinsic motivators often wind up rewarding behaviors that are the
opposite of what the organization wants and needs. Although managers may
espouse long-term growth, for example, they reward quarterly earnings;
thus, workers are motivated to act for quick returns for themselves. In recent
years, numerous scandals have erupted because the practice of rewarding
executives with stock options unintentionally encouraged managers to push
accounting rules to the limits in order to make their financial statements look
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good and push up the stock prices. This chapter’s Consider This further
examines how incentives can end up motivating the wrong behaviors.
5. Carrot-and-stick approaches destroy people’s motivation to work as a group.
Extrinsic rewards and punishments create a culture of competition versus a
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culture of cooperation. In a competitive environment, people see their goal
as individual victory, as making others appear inferior. Thus, one person’s
success is a threat to another’s goals. Furthermore, sharing problems and
solutions is out of the question when co-workers may use your weakness to
undermine you, or when a supervisor might view the need for assistance as
a disqualifier for rewards. The organization is less likely to achieve excellent
performance from employees who are mistrustful and threatened by one
another. In contrast, replacing the carrot-and-stick with methods based on
meeting higher as well as lower needs enables a culture of collaboration
marked by compatible goals; all the members of the organization are trying
to achieve a shared vision. Without the effort to control behavior individually
through rigid rewards, people can see co-workers as part of their success.
Each person’s success is mutually enjoyed because every success benefits the
organization. When leaders focus on higher needs, they can make everyone
feel valued, which facilitates excellent performance.