Carrot and stick

Interesting reseaarch from the University Of Nottingham School of Economics shows that fines rather than bonuses are more effective in determining workplace behavior. In an experiment involving 100 volunteers, the threat of an inspection and fine by the boss was found to encourage more effort than the inducement of a bonus. Yet most organisations don't use any form of fines or penalities for poor performance. Often poor performance is regarded as a failing of the employer to provide sufficient coaching. High performance organisations use transparent systems of rewards AND penalities related to well defined notions of positive and negative contribution. The transparency of the performance system ensures that penalties are not threatening or demotivational.