A review of carrot and stick approach to leadership
Introduction Leadership is deemed the most important tool to get a group, an organization or an establishment moving forward (Abbas & Asghar, 2010). No matter how effective the followership is or how hard working the workers are, a bad leadership can as well stall the objectives of any organization and make hard-workers look as if they are not working. That is the reason so much attention is paid to the quality of leadership in setting the direction for the personnel efforts and getting the goals of an organization accomplished (Fiedler, 1996). Among the many leadership styles available is the carrot and stick leadership style commonly known as the transactional leadership style (Kaleem, 2016). The name, carrot and stick, signifies the means by which authority is exercised and obedience is demanded. By implication, the carrot and stick approach to leadership is a conditional type of leadership that involves an exchange between the leader and worker or employee. Labour or efforts exerted is dependent on the reward in view and vice versa, thus signifying a trading of interests between the parties involved. Just as other forms of leadership have their advantages, this type of leadership also has its advantages, hence those that believe in it hold tenaciously to it insisting that rewarding efforts gets people to put in more efforts and also that people by their nature would not do much work except they are recognized, appreciated and compensated in ways that are commensurate with their inputs. This attitude is natural to humans according to Kaleem (2016), who declared that if one taps an overworked man on the shoulder and tells him, “well done”, he is likely to pull more hidden resources within him and get a hard task accomplished. Similarly, absence of rules, policies, instructions or targets that regulate human behavior can also spell doom for any organization that is set to attain certain standards. Most people will not sit up to do the work that is demanded of them if there is no threat to some form of security they may have or desire. Even the holy script exhorts “foolishness is bound in the heart of a child but the rod the rod of correction shall drive it far from him” (Prov. 22:15). Fear of or willingness to avoid certain discipline would motivate some people to do what they ordinarily would not do. Thus, while “carrot” signifies the rewards of certain basic needs that could be derived for accomplishing a task, “stick” refers to the punishment that could be received for failure to accomplish an expected or assigned task. The intent of this paper was to review the carrot and stick approach to leadership based on available literary works on the internet. To this end, the objectives that were formulated included to review literary works on the following areas; 1. examine the meaning and nature of the carrot and stick leadership. 2. trace the origin of the carrot and stick approach to leadership. 3. identify the distinctive attributes of the carrot and stick approach to leadership. 4. discuss the benefits/advantages of the carrot and stick approach to leadership. 5. examine the theories on the carrot and stick leadership style.
Relevant Academic Literature
The meaning and nature of the carrot and stick approach to leadership
Ohunakin, Adeniji & Akintayo (2016) insist that Max Weber was the first to use this leadership style in it alternate form, transactional leadership in his work on socio-economic considerations of the organization. He defined this leadership style as “as a leader who earns leadership through normative rules and regulations, strict discipline and systematic control”. Burns, (2010), describes it as “more of give and take type of relationship at work, where exchange is a major form of interaction between superior and subordinate, such as a monetary rewards for achieving set objectives”. A transactional leader clarifies and lay much emphasis on goals and objectives, require tasks, performances, organisational rewards and consequence of laxities. Transactional leader overrides the personal interest of subordinates. It is a type of leadership style that is more of an exchange process such as “if you do this for me, this will be your reward. Transactional leaders motivate subordinates by appealing to their personal desires. Burns (1978), describes transactional leadership style as a “favour-for-favour” exchange. This leadership focuses on performing the task in the right way. The followings are the three major dimensions of transactional form of leadership style: contingent rewards, management by exception (passive) and management by exception (active).
Bass (1985), defines the carrot and stick leadership behavior construct as the “foundation for specifying expectations, negotiating contracts, clarifying responsibilities and providing the rewards and recognitions to achieve the set objectives and expected performance between leaders and followers". It is also seen as” a traditional motivation theory that asserts, in motivating people to elicit desired behaviours, sometimes the rewards are given in the form of money, promotion, and any other financial or non-financial benefits and sometimes the punishments are exerted to push an individual towards the desired behavior”. Lutfi, (2001), quotes John Locke as once writing that “good and evil, reward and punishment, are the only motives to a rational creature”. In other words, the rational mind only understands the concept of reward and punishment where applicable.
According to Omar, Zainal, Omar, and Khairudin (2009) and Hussain, Abbas, Lei Haider and Akram (2017), the carrot and stick approach to leadership is premised on the ‘conditional reward-based exchange found between a leader and the led. This approach to leadership uses as a bait, the promise to fulfill the short term physical and safety needs of workers or subordinates within the context of the economic exchange model. This gets the subordinates to deliver on their assigned goals. Burns (1978), describes the carrot and stick (transactional leadership) as a social exchange by which leaders depend on rewards and punishments to increase their employees’
performance in their organizations
Koh, Steers, and Terborg, (1995), argue that this approach to leadership, rather than being proactive, is reactive as it serves as a reaction to the behaviours of subordinates by the leader. Thus, the leader promises the subordinates some form of rewards which gets them motivated to do more work than they would have with their focus on the baits (reward).
Contrariwise, Hussain et al, (2017), are of the opinion that the carrot and stick approach to leadership actually encourages creativity when there is knowledge sharing among employees in the organization. According to Bass and Riggio, (2006), though transformational leadership style has gained popularity in previous researches while the carrot and stick leadership style has been largely ignored, the carrot and stick leadership style is not devoid of innovation and creativity. Judge and Piccolo (2004) assert that meta analyses have a strong prediction of this style of leadership for motivation of employees, effectiveness of leaders and satisfaction. Waldman, Rammirez, House, and Puranam (2001), reiterated that this leadership style has been strategic in organizational effectiveness and is more universally practiced than any other style of leadership.
Bass (1997), Podsakoff, MacKenzie, Moorman, and Fetter (1990) emphasize that the carrot and stick leadership style takes into consideration the satisfaction of the needs of the employees through reward, exchange and recognition when agreed task objectives and goals are met to suit leader’s expectations. Jansen, Vera, and Crossan (2009), in their study established that the carrot and stick leadership style is a suitable tool to motivate employees into getting involved in organizations’ ideation programmes.
Among the baits promised as reward by the leader to his subordinates include position, money status and connection (Howell & Avolio, 1993). Assurance of security in the subordinates’ areas of basic needs will keep them doing what is expected of them. Life will continue this way within the basic mission and vision of the organization as long as both parties are satisfied until dissatisfaction sets in to necessitate a review of earlier agreements (Howell & Avolio, 1993).
It is worthy of note that while this approach to leadership works in certain contexts, it does not in any way upset the existing structures and functioning of the organization (Howell & Avolio, 1993). The leader focuses mainly on the outputs of the workers and shows little or no interest in their discretion, innovativeness, creativity or personal development (Howell & Avolio, 1993). While the leader delivers on the promises, he also displays the variant, which is to punish non- compliant workers who fail to meet the target or align with the standard (Morçin, 2013).
According to Bass (1985), the application of the carrot and stick approach to leadership requires three basic frameworks. They are conditional rewarding, management with exceptions and complete freedom leadership. Conditional rewarding involves the identification of tasks to be accomplished in exchange for compensation or reward. Management with exception is an approach that the leader closely monitors the workers to ensure strict compliance with requirements. He interferes instantly in problems, mistakes or deviations and sets records straight immediately. The last which is complete freedom leadership pictures a leadership that is not always available in the organizational environment to make decisions and solves problems when necessary.
Hsu, Chen, Hu, Yip and Shu (2006), opined that for this kind of leadership approach to succeed, the leader must have the capacity to both reward and punish which restricts its application to certain organizations. Yet, this approach is still in operation along with other forms of leadership in public and private sector organizations (Bakan, 2008). Burns (2010), states that in the carrots and stick approach, employees’ obedience relied not only on rational values and rules, but also on laid down agreements. Followers are guided and at same time limited to the tasks assigned to them. Remuneration is fixed on hierarchical order and organization’s bureaucracy. Clearly defined coercive measures are already established as it relates to different situations and conditions (S. Nikezie, S. Purie, and J. Purie).
Origin of carrot and stick approach to leadership
This leadership approach comes by several names, carrot and sticks approach (Udoh, Oladejo & Orapine, 2019), the transactional leadership (Frey, 2004) the “reward” and “punishment” or “positive incentives” and “negative incentives” system (Udoh, Oladejo & Orapine, 2019). The carrot and stick leadership is an old leadership style that is linked to behavioural and social scientists of the early 19th century (Udoh, Oladejo & Orapine, 2019, Herrnstain, 1969) The construct was coined as a result of the need to motivate workers to do a commensurate work with the rewards they receive.
Several ideas generally were believed to necessitate the carrot and stick approach to leadership. One such idea generally held was that human beings are lazy and would not do what is expected of them unless they are motivated by promise of rewards for good work or threatened by the possibility of punishment for failure to do as expected. Also, it was believed that people could be made to do more work than they ordinarily would in given circumstances. The prospect of meeting the lower level needs of people according the Abraham Maslow’s theory will get people motivated (Herrnstain, 1969).
While Hussain et al.,(2017) traces the origin of the carrot and stick leadership style to Jeremy Bentham during the industrial revolution, Smith (1973), insists that such history does not exist although the fable of the carrot and stick is a well-known one. Udoh, Oladejo and Orapine (2019) traced the carrots and sticks approach to Pavlov traditional theory of motivation.
Aesop’s fable or the uncle Remus folk tales do not have a record of this construct. It is hinged in mystery. The popular story is associated with donkey cart drivers and farmers who dangled a carrot tied to a stick in front of a donkey drawn on a cart that was expected to tread a given portion of farm in a day. The sight of the carrot motivated the donkey to keep working and when rewarded at the end of the work session, it was a motivation to do more work. The farmer used the stick the beat the donkey whenever it lapsed in its efforts but consistently increased the size of the carrot when the donkey did as was expected (Smith, 1973).
Distinctive attributes of carrot and stick approach to leadership
The carrots and stick approach consists of the carrots and the stick concepts. Besides, the carrots and sticks, there are distinct atmosphere that can make its adoption and application distinctive.
Carrot known as “daucus carota”, is the most important crop of “Apiaceae” family (Dias, 2014). It is a root vegetable with flavonoids, vitamins, polyacetylenes, carotenoids, and minerals, with numerous nutritional and health benefits it is widely distributed everywhere in the world. It is used for medical purposes as well as food. Carrots were cultivated prior to the tenth century (Dias, 2014). They come in various colours such as white, yellow, orange, red, purple, or very dark purple (Dias, 2014). The common specie in Nigeria is the orange coloured carrot. Carrot is one of the best known treats for donkeys (https://spana.org), thus, the common association of donkeys with carrots.
When used in leadership parlance in the social and behavioural sciences, reference is not to the vegetable called carrot. Its association is in the lesson that carrots were used to motivate donkeys to do the work expected of them (Smith, 1973). In this usage, carrots refer to the tangible benefits that leaders can offer to workers, subordinates, employees, etc., to motivate them to meet a target, specification, goal or requirement. They could come in tangible forms such as bonuses and paid holidays, and intangible processes like job rotation and the setting of work goals. Meyer and Evans (2003), opined that in motivating the professoriate in the academics field, carrots could be in the form of opportunity to advance one’s career, pride in seeing one’s name in the marquee lights and peer recognition.
Frey (2004), reiterates that the use of carrots in combating terrorism could be in the form of providing goods, services, or valuable opportunities to groups that refrain from terrorism and making non-terrorist activity more attractive, as discussed. Other forms of carrots incentives include direct monetary transfers, economic-development assistance provision of goods, services,
opportunities and removal of taxes or customs duties. For Yavuz (2004), monetary incentives include, commissions and bonuses, while non-monetary or non-cash incentives could also be tangible or intangible such as encouraging the employees by providing them with autonomy in their job and participation in decision making, assigning challenging duties, improving working conditions, recognizing good work through small gifts, letters of appreciation, plagues, tickets
to restaurant etc., providing some services for the employees, organizing social activities in the work place, etc.
According to Aamir, Jehanzeb, Rasheed & Malik (2012), carrots can take the forms of social incentives (helpful, friendly and supportive co-workers and considerate supervisors); organizational rewards (working conditions, pay satisfaction, benefits, and promotional opportunities);extrinsic rewards include things like salaries, bonuses commissions, perks, benefits, and cash awards
Burns (1978), hinges the carrot and stick /transactional leadership on the exchange and transactional effectiveness between superior and subordinates. Transactional leaders that adopt this dimension will be ready to render any assistance in exchange for the subordinates’ efforts and such leaders will only be satisfied when their expectations are met accordingly. Rewards or incentives are used for the achievement of desired outcomes.
The use of carrots (incentives) in motivating people have been found to be very effective. But for it to work well, the incentive must be attractive enough and kept so for a long period of time. According to Udo et al (2019), the carrot will only serve as incentive if the workers or employees have a very strong need that begs for fulfillment, if the carrot is attractive enough and if the work, target, goal to be accomplished, is commensurate with the incentive offered (Udo et al 2019).
The stick, on the other hand, was a long slender piece of wood used to prompt the donkey to move or do what it was required to do. Use in leadership/motivation literature, it refers to punishment or negative incentive that can conform a non-compliant behavior to a compliant one. The stick also refers to fear of punishment. The stick or fear is a good motivator and when used at the correct times can be very helpful. In that context, fear has always been the ‘convenient’ choice of in some organizations (Hussain et al, 2017). The stick is deemed to be a very useful approach and attractive in producing instantaneous compliance and immediate results when all else fail.
Fear is also attractive as in the short term, an employee’s performance may be improved without any need for incentives or financial remuneration. Fear however has its weaknesses in that an organisation motivated by fear is prone to mutiny. It can also be stressful for employees. It is extrinsic, which means that the motivation only works while the motivator is present. When the motivator goes, the motivation also usually goes. Fear is also only useful on a short-term basis, as it needs to be applied in ever-increasing doses. In a worst case scenario, fear motivation can backfire and could even lead to cases of sabotage.
Benefits of carrot and stick approach to leadership
There are several benefits of the carrot and stick leadership style. According to Husseain et al. (2017), the benefits include;
- Fostering of the commitment of the workers to goals and objectives to be accomplished
- Communication of leaders’ commitment to organizational programmes to the employees which in itself is a stimulant to work.
- Fostering of close working relationship between the leader and the employees who need to be present all or most of the time to monitor. Supervise and ensure the required work is done.
- Enhancement of effective communication between the leader and the employees since targets must be clearly explained and the workers made to understand what is required of them.
- Allows for shared knowledge behavior in organizations which may be appropriate for bringing a deeper understanding for organizational creativity because of the componential theory of creativity (explains the individual’s relevant domain expertise, creative thinking expertise or skills and task motivation.
Burns (2013) and Hay (2012), outlines the following as the distinguishing features of the transactional leader.
- Leadership is responsive
- The leader works within the organizational culture
- Employees achieve objectives through rewards and punishment set by the leader
- Leaders motivate followers by appealing to their own self interest
- Leaders implement management-by-exception, maintain the status, stress correct actions to improve performance
Other benefit of the carrot and stick approach include results of empirical studies which have established a link between the carrot and stick leadership with the creation of conducive environments that enhance employees’ creativity through supportive (rewards and recognition) supervision (Oldham & Cummings, 1996). Similarly, the study of Amabile, Schatzel, Moneta, and Kramer (2004); Redmond, Mumford, and Teach (1993); and Yong (1994), showed that supervisors are prone to being consistent in their supervisory roles when the carrot and stick approach to leadership is adopted.
Amabile et al. (2004), attributed the development of employees’ skills and expertise in accomplishing their tasks to the leader’s task-oriented behavior which characterizes the carrot and stick leadership. Vera and Crossan (2004), add that the carrots and sticks approach helps leaders in institutionalized setting to develop new ideas with a focus on efficiency and standardization to refine, reinforce and obtain the benefits of current routines and assets of the organization.
Amabile (1983), believes that the carrot and stick can be a stimulating factor in getting employees to make suggestions for the improvement of the organization’s products, services and procedures. Accordingly, this will drive for excellence and efficiency in the organization.
The proponents of motivation theory of counter-terrorism (Dreher, Gassebner & Luechinger, 1987; Davis, 2014; and Asal, Phillips, Rethemeyer, Simonelli &Young (2018) uphold that the carrots and stick approach can be applied across all domains of the socal life. They assert that despite the challenging and cost intensive nature of the carrot and stick leadership in implementation, it is capable of eliciting compliance and cooperative behaviours from adaptable adversary. Similarly, they uphold that in civil conflict situations, conciliatory and coercive effort of the state can elicit cooperative behaviour from contending parties.
Supporting theories of the carrot and stick approach to leadership
Douglas McGregor Theory X and Theory
McGregor while working as the first full time professor of psychology at MIT University, propounded the popular theory known as theory X and theory Y in 1960 in his book Human Side of Enterprise. These theories have found wide usage in human motivation and personnel management. Theories X and Y which are based on Maslow’s hierarchy of needs are focused on two very different attitudes towards workforce motivation. Since theory X relates more to the carrot and stick approach to leadership, it will be examined here.
McGregor’s Theory X states that the workers should be constantly watched and directed on required task and that management needs to coerce and control employees. The assumption here is that the average worker hates work and would always want to avoid responsibilities at all time. As such, work performance must be motivated by either money, position or punishment. Theory X believes in adoption of regulations that are designed to enforce compliance because an average worker is selfish, without ambitions, dislikes responsibility, resists change, prefers to be led than lead and shows no commitment to the organization. Theory X could be likened to transactional or the stick and carrot leadership style which shows a pessimistic view of employee’s nature in the workplace.
Believers in this theory applies both the carrots and the stick to ensure that organizational goals are achieved. Despite its drawbacks, this approach is widely adopted in a wide range of organizations such manufacturing, service organizations, educational institutions, the military, state governance and politics, etc,. In some organizations, this approach is used simultaneous with other leadership styles to give a blend of approaches for maximum results.
Goal Setting Theory
Edwin A. Locke and Gary P. Latham propounded the Goal setting theory in 1984. Their work was reviewed in 1990(a) to integrate the organizational work environment where employees needed to be motivated through goal setting (Latham and Locke, 1991). The basis for this theory is that humans naturally behave in purposeful ways that are regulated by some goals they hope to accomplish. According to Binswanger (1991), self-generation, value-significance and goal-causation describe goal directed actions. This means that the individual first must generate the kind of energy that drives his action towards certain goals that are necessary for his survival.
Locke and Latham identified three levels of goal-directed action. At the lowest level of consciousness are plants that are physiologically controlled. The second level is that of lower animals that possess sensory-perceptual mechanisms through which they can consciously regulate themselves. The highest level is that of human beings who possess the capacity to reason. They can set long range purposeful actions after conceptualizing some goals they wish to achieve (Locke, 1969).Binswanger (1991) asserted that human beings out of their volition take purposeful actions. This happens when people become conscious of what is important and relevant to their welfare and therefore, think of ways they can achieve these benefits through goal setting with the determination to act on their judgment. Latham and Locke (2001), stated that “the domain of goal setting theory lies within the domain of purposefully directed action”.
Accordingly, their theory raises the question of why there is a difference in performance of work tasks among employees in the same organization given an equality in ability and knowledge. They identified the causative factor as motivation and added that motivation explains why some people with performance goals perform better than others in their tasks. This theory has been tested in several settings and is found applicable in every sphere of life where humans set goals to accomplish tasks.
When relating goals to performance, two characteristics stand out. These are content and intensity. Goal content deals with specificity and difficulty, while intensity deals with commitment. Specificity is about how clear or vague goals are. When placed on a continuum, goals could range from vague goals, “do this work” to specific “try to accomplish 60% of this task within the next 30 minutes” (Latham and Locke, 1991).
Goals can be easy, “try to get 5 problems completed in the next 30 minutes”, moderate, “try to get 10 .”,difficult, “try to get 15 . . .“, or impossible, “try to get 50 . .”. Difficulty is relative since what could be difficult for one person could be easy for another. A linear function has been established between performance and goal difficulty. This is premised on the fact that people with adequate ability and commitment put more effort to achieve more difficult tasks than they would do with easier tasks.
According to Locke and Latham (1991), “commitment refers to the degree to which the individual is attached to the goal, considers it significant or important, is determined to reach it, and keeps it in the face of setbacks and obstacles”. Goal commitment plays the dual functions of stimulating and moderating performance. Thus, when a goal difficulty is held constant, employees with high commitment will perform better with higher goals than those with low commitment.
Abraham Maslow’s Hierarchy of Needs Theory
Abraham Maslow propounded the famous hierarchy of needs theory which ha found wide application in various sphere of life. Maslow’s hierarchy of needs includes five levels of needs and argues that individuals will act only to meet their higher needs when their lower needs are met. Abraham Maslow’s hierarchy of needs theory is seen as the basis of many later developed theories. Later other works done on Maslow’s hierarchy of needs theory include the following
Herzberg’s two-factor theory transforms Maslow’s needs into two areas of need as hygiene factors and motivation factors (Eren, 2003, Koçel, 2014). The hygiene factors are company policy, salary, working conditions, security, supervision and interpersonal relations. These factors are not the main part of the job and do not affect the performance of employees, but they prevent poor performance due to the work restrictions. When hygiene factors are ensured, employee dissatisfaction and work restrictions disappear, but these factors have no effect on achieving the top-level performance. Herzberg’s motivational factors are high-level sources of motivation that focus on the aspects of work such as success, appreciation, accountability, and progress. These factors have positive effects on both job satisfaction and occupational performance. Low-level hygiene factors do not provide motivation when they are present, but the absence of these factors leads to loss of motivation (Herzberg et al., 1959; Robbins & Coulter, 2009; Iliuta Dobrre, 2013).
Alderfer’s ERG theory also divides Maslow’s hierarchy of needs into three main categories: “existence needs”, “relationship needs” and “development needs”. Existence needs are met by food, air, water, wages, additional benefits and working conditions. Relationship needs are met by establishing active relationships with colleagues, superiors, subordinates, friends, and family and maintain them. The development needs mean individual’s efforts to find personal development opportunities by making creative or innovative contributions to the workplace (Wanous & Zwany, 1977).
However, ERG theory is contrary to Maslow’s hierarchy theory in several respects. According to ERG theory, sometimes a need seems more dominant than others. An individual may be motivated to meet more than one need at the same time, and therefore the needs at a higher level can be satisfied before the lower ones (Hossain & Hossain, 2012). McClelland’s Achievement Need Theory classifies the basic needs of individuals as establishing relationships, gaining strength and being successful, and argues that achievement is the thing that individuals need most (Aktas & Şimsek, 2015). According to this theory, there cannot be a common hierarchical chain for everyone and personality is important in motivation.
In the theory, individuals are divided into three groups: those who need to build relationships, those who need to gain strength, and those who need success. Even if people with a low need to establish a relationship think that they are to meet with reaction, they refrain from taking a stand and commenting clearly (Çakıcı & Aysen, 2014). Individuals with high need of achievement take on personal responsibility to find solutions to problems (Rohs et al., 1999). “Individuals with a strong desire to gain strength can be influential in directing a group by influencing others, leaders are delighted to influence and direct others, and these behaviors contribute to effective leadership” (Şahin, 2012). People with achievement motive prefer to work on the problem rather than leaving it up to chance. People who are motivated to achieve at the same time are much more concerned with their own personal success than the awards they will win (Singh, 2011)
From the review of available literature, it can be seen that the carrots and stick leadership approach is widely used and have advantages and disadvantages. When used in very suitable situations, they ace be a very tool of maximally motivating employees. It is advisable, that when adopting this style of leadership, due consideration should be paid to the needs of the employees and what factors motivate them including ensuring a match of rewards and task to be accomplished.
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Article by Rita LELEH, student of LIGS University with co-author AMR SUKKAR ESSAM, approved by lector Dr. Amr Sukkar.