The Carrot or the Stick?: Organizational Leadership in and Beyond COVID-19

By: Hise Gibson and Nadege Benoit

As COVID-19 continues to disrupt the traditional work environment, organizations and leaders face a new challenge: keeping the workforce motivated. With the massive introduction of remote work, team members have the agency to find a new job with a better leader if leaders do not meaningfully engage team members.

Early in the work from home movement, many corporations and organizations reported high productivity and increased employee happiness. However, as the quarantine months have dragged on, the novelty has worn off, employees are now balancing homeschooling, fears of lays offs, and Zoom fatigue. To incentivize employees to meet specific requirements, many corporations are requiring employees to self-report their productivity. Others, like Amazon, have taken to firing employees for not adhering to strict social distancing measures. The tech industry has taken a different approach by extending its remote work policy until 2021. What is the right approach to leading in a global pandemic? Is it better to lead with a carrot or with a stick?

The metaphor of the carrot or the stick references a motivation theory that uses rewards and punishments to enforce behavior and induce compliance. The metaphor of the carrot refers to using incentives and rewards to motivate and lead. For example, when leaders provide a clear purpose that nurtures intrinsic motivation. Conversely, the stick method uses punishment to encourage people and elicit compliance. The carrot method may not always be how leaders find themselves leading. It is often easy to use rewards to motivate employees. However, leaders may resort to other methods once incentives run out or no longer seem useful.

Managers and executives seem to use threats of lay-offs and firing employees more often in the virtual environment as a method to enforce compliance in the new work environment. The drawback of using this method is that employees fear losing jobs if productivity degrades and anxious over what the future may look like if forced to return to the office. Furthermore, employees may not be as productive as they report but instead reporting higher numbers out of fear.

Using a stick method of motivating employees, organizations risk creating a work environment that uses fear to induce compliance and eliminates psychological safety. Psychological safety is not only crucial for communication, but according to the Harvard Business Review, it also allows for risk-taking, creativity, and trust in the workplace. These types of behaviors tend to increase solutions and collaboration in work teams. Increasing psychological safety also increases confidence in the workplace, establishing cohesive teams that buy-in to organizational values and missions. A positive work climate is crucial to innovation and begins by establishing constructive perceptions around group dynamics. Managerial leadership styles directly influence positive work climates. Research corroborates that managers and executives who are self-aware create collaborative environments and happy employees committed to the organization’s mission. Ultimately, suppose organizations want to create buy-in for the task and purpose. In that case, they must demonstrate a balance between the carrot and stick, oscillating between having empathy for employees and still maintaining a productive work environment.

In this COVID environment, leaders are forced to increase the frequency of engagement with team members. It is easier to know how teams are doing beyond their work-life because of technology advances. However, it is easier to pick up on nonverbal cues in the physical world than in the greenscreen background world of video meetings. Techniques to combat this will vary based on the level of responsibility of the leader within the organization. Mid-level managers might need far more leeway than senior leaders based on leaders’ knowledge, skill, and attributes.

How Can Managers and Leaders Balance?

Striking a balance between punishments and rewards is difficult, considering the COVID-19 environment. Leaders can leverage the Army’s operational process as a framework to enable success. This framework consists of consistent initial planning, preparing, and executing while continuously assessing the entire process. Another way is as follows.

Plan (and review)

First, organizations need to review their current policies and priorities about how initiatives are managed. Early during the pandemic, many organizations shifted their work to virtual platforms without assessing how to transpose results. Despite the convenience of Zoom and Microsoft Teams, not all work is easily transferable. Not reviewing policies and organizational priorities led to many experiencing Zoom fatigue from hours of screen time that may have been unnecessary. Reviewing work policies and prioritizing work to be done in a virtual platform can help organizations managers lead in a not overbearing or too relaxed a manner.

Prepare (and balance)

Second, managers and leaders, particularly middle managers, need to be cautious of what is being over-emphasized to employees. Constant threats of punishments such as lay-offs and benefit cuts induce stress, reduce productivity, and probably wear off if the threats do not come to be. Conversely, endless rewards in an organization can also lead to trouble. Employees may become too complacent and expect rewards for marginal performance. Both rewards and punishments need to be used in a manner that motivates employees. Too much of either creates diminishing returns.

Execute (and monitor)

Finally, organizations must create a feedback system that allows them to assess their progress. Implementing punishments or rewards can help motivate employees, but only if the input is present to adjust as required. Feedback enables communication at all echelons of an organization, and it reinforces psychological safety. As mentioned earlier, when employees feel like their opinion matters, it enhances trust and innovation.

Assess (continuosly)

Leaders who understand how and what motivates employees shows that the organization understands its employees. It also demonstrates empathy in a very challenging time. Finally, and most importantly, it creates buy-in and trust that leaders care about their employees. According to Fortune magazine, the top 100 “best companies to work for” all have in common that employees trust their managers, coincidentally these companies also outperform the annual returns of the S&P 500. Trust and buy-in are not only crucial to motivating employees but are also financially lucrative.

Although 2020 is over, the COVID-19 pandemic is still disrupting the workforce causing the work from home environment to continue for the foreseeable future. Managers and leaders across all levels must appraise how they are managing tools to motivate employees behind their screens.

Dr. Hise O. Gibson is an Academy Professor of Systems Engineering at the United States Military Academy at West Point. He graduated with a B.S. in Operations Research from the U.S. Military Academy at West Point and a Doctorate of Business Administration in Technology and Operations Management from Harvard Business School. His expertise is the intersection of operational effectiveness and human capital development to enable more effective ways to maximize the integration of Technology, People, and Processes throughout an organization.

Nadege Benoit is an Army Adjutant General Officer and is a graduate of the United States Military Academy at West Point. She currently serves as a Leader Developer at the United States Military Academy at West Point, and is a graduate of the Army’s Eisenhower Leader Development Program and holds a master’s degree in Organizational Psychology from Columbia University.