Wednesday, January 20, 2010

Carrots dressed as Sticks

As we all know that incentives play an extremely important role for businesses. A business is able to succeed when it has a strong and an effective value chain and a value delivery network. A value chain is when all the departments in a company work together in order to create value for the customers. Departments consist of employees and thus if employees are motivated only then the departments will perform satisfactorily. Hence, motivation plays a very crucial role. A good way to motivate the workers of a company is by dressing sticks as carrots. Due to this method, a company will be able to increase the efficiency and effectiveness of its employees. This is an extract from the article I read:

"At the beginning of the week, some groups of workers were told that they would receive a bonus of 80 yuan ($12) at the end of the week if they met a given production target. Other groups were told that they had “provisionally” been awarded the same bonus, also due at the end of the week, but that they would “lose” it if their productivity fell short of the same threshold. Objectively these are two ways of describing the same scheme. But under a theory of loss aversion, the second way of presenting the bonus should work better. Workers would think of the provisional bonus as theirs, and work harder to prevent it from being taken away".

Guys, do check out how this method is better than other ways to motivate the workers of an organization and do give feedback.