Cant Miss Takeaways From The Carrot Principle

Remember CliffsNotes? Chances are you relied on those little yellow pamphlets to save you from an English exam at least once throughout high school. Consider this your mini CliffsNotes of one of the top books in the rewards and recognition space: The Carrot Principle: How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance.

The book is full of data and insights, so for today, we’ll focus on the top takeaways (and myths, dispelled) from The Carrot Principle.

The bestseller leverages data from a 200,000-person study by the Jackson Organization. The study confirmed that managers who achieve enhanced business results are significantly more likely to be seen by their employees as strong in the basic four areas of leadership:

  • Goal Setting
  • Communication
  • Trust
  • Accountability

The Carrot Principle shows that the central characteristic of the most successful managers is that they provide their employees with frequent and effective recognition, and they use recognition as an “accelerator” to each of the basic four areas of leadership.

But what qualities, behaviors, and actions should HR and people managers recognize?

How frequent is “too frequent”? Won’t employees get tired of daily recognition?

Let’s start by clarifying the qualities, behaviors, and actions managers should recognize, according to The Carrot Principle.

Engaged employees demonstrate the following virtuous qualities

  • Innovation and creativity
  • Taking personal responsibility to make things happen
  • Desiring to contribute to the success of the company and team
  • Having an emotional bond to the organization and its mission and vision

Positive reinforcement of the above behaviors works wonders. As for frequency, have you ever heard anyone at work say, “Seriously, I wish my manager would stop recognizing me for my hard work. It’s just getting to be too much!”?

We didn’t think so.

Key Takeaway #1:
As a manager, if you see your employees embodying the above qualities, say something to acknowledge that you noticed their effort. Make it specific and personal. Meaningful recognition reinforces trust, drives engagement, and decreases churn.

Myth #1:
Verbal recognition is just too small and insignificant to make a difference.

Thankfully, this is false! We all want to feel like we matter. Recognition – even verbal recognition – of our best qualities and behaviors validates that we matter. Recognition through a thoughtful comment validates that what we do matters to our team.

The best part for managers with limited budgets? This genuine, regular form of recognition is absolutely cost-free.

Key Takeaway #2

It doesn’t have to be hard or complicated to get a performance rewards program up and running. The best way to start recognizing above and beyond performance is to start!

As an HR professional, a people leader, a manager, or all of the above, the best way to begin a recognition program is just to begin. Keep it focused on a few core goals you want to further. Write a note, give a timely compliment for a job well done, keep it simple, genuine, and kind.

Here at Wishlist Rewards, the most common structure for a formal performance rewards program is a 3-tiered approach. Most HR professionals will assign different values to these tiers based on their budget and what is appropriate for their industry.

Bronze Reward – Recognizes an employee’s above and beyond behavior that impacts another employee, or recognizes an ongoing embodiment of your organization’s core values.

Silver Reward – Recognizes ongoing above-and-beyond behaviors or behaviors positively impacting that employee’s immediate team.

Gold Reward – Recognizes behaviors and actions that drive bottom-line results or positively impact the whole organization in a significant way.

Don’t let overthinking get in the way of giving recognition. Start today!

Myth #2
It’s expensive to put together a formal reward and recognition program.

According to The Carrot Principle authors, most organizations they work with budget 2% of payroll for day-to-day recognition, team event gifts, above & beyond, and service awards.

At Wishlist Rewards, we understand how to put together a meaningful, impactful recognition program for under $250/employee/year. We do it all the time.

Whatever your budget, consider starting one of the following formal rewards programs:

  • Anniversary Rewards (for service milestones, reward loyalty)
  • Performance Rewards aka Spot Rewards (recognize above & beyond performance)
  • SPIFF Rewards (put extra pep in your sales teams’ step when they hit quota)
  • Birthdays (go the extra mile to show employees you care about their life)
  • Culture Rewards (recognize employees for embodying your culture and core values)
  • Client Rewards (provide a perk to your customers, your most important key stakeholder)

By this point you may be asking yourself, how can I be sure to choose the right reward each time? My employee population is so diverse – it makes choosing rewards difficult!

The HR tech space is full of rewards and recognition platforms that let you set a budget, send a reward, and give employees ownership to choose the reward that’s most meaningful to them.

Inc. 5000 company Wishlist Rewards, for example, makes it simple for leaders to reward employees with fun and unique experiences.

In conclusion

While there are dozens of additional lessons from The Carrot Principle that we didn’t cover, you’ve learned what we’ve deemed the most important takeaways from the book.

The Carrot Principle is a great introduction to the strategy it takes to be successful with a rewards and recognition strategy.

Ready to take the next step?  Chat with one of our recognition experts here at Wishlist. 

 

 

Goldberg, J. Trends in Employee Turnover and Retention. Graziado Business Review, Pepperdine Graziadio Business School. 2014. https://gbr.pepperdine.edu/2014/12/trends-in-employee-turnover-and-retention Accessed on July 29 2019.