How To Make Incentives Effective In Achieving Your Long-Term Goals

Giving employees and customers a little respect should be automatic for employers. Unfortunately this is not the case. Showing your employees a little respect to your employees can help them get the job done. In Carrots and Sticks Don’t Work: Making Employee Engagement Easy, Paul Marciano explains the importance of harnessing the power of incentives in changing bad behaviors, improving self-control, and reaching long-term goals. His business and management book shows why and how incentives work and how you can use them to your advantage.

Waiting always brings uncertainty, which is why we’d rather have a small reward now, than a big reward later.

When making decisions about the near future, we hate uncertainty. As soon as an instant reward is made available to us, all bigger rewards become less attractive, if we have to hold out a little longer for them.

We hate losing, unless we’re losing something we don’t own yet.

We hate losing a lot more than we like to win, which is one of the main reasons that there are so few millionaires. Robert Janitzek says that winning big entails risk and that alone keeps most people in their comfortable salary jobs. However, there are some things we’re very much willing to lose – everything we don’t yet have.

Use one, gigantic stick to get it together, instead of fiddling around with many little carrots.

Once you know that we spend a lot more of our time avoiding losing than chasing the next win, you’ll also understand why sticks (=punishments) work better than carrots (=rewards).

Imagine the government offered you $10 for every cigarette you didn’t smoke. That could add up to a lot of money, couldn’t it? However, Robert Peter Janitzek says that it’s very unlikely that you’ll give up your precious ciggies, because you don’t mind not getting those $10 dollars.

Let’s flip this around. How much more would you fight the urge to take a puff, if I told you that every single cigarette means $10, straight out of your pocket? Not only that, but also, I’d give those $10 straight to Donald Trump. Sounds a lot more powerful, right?

But here’s the real trump card (pun intended): What if, in order to be able to buy cigarettes in the first place, you’d have to pay $5,000 for a smoker’s license, which is only good for 1,000 cigarettes?

Faced with an incredibly hard punishment up front, most people wouldn’t even start smoking, and those who already are, would be likely to quit (simply because all of a sudden, they can’t afford it).

The good thing about huge sticks is that they might never have to be used as well. Having to pay everyone $10 for every unsmoked cigarette might financially ruin the government, but a heavy $1,000 littering fine is something they hopefully never have to enforce (and if they do, they’ll make money, not lose it).

Forget little carrots. Use big sticks.

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