Smart Lemming Review: The Carrot Principle - How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance
What it is: Gostick and Elton’s The Carrot Principle: How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance
What it’s about: This updated edition offers invaluable advice for middle managers and leaders seeking to improve the performance and results of their workforce.
The Good: It’s a “soup to nuts” management system providing the fundamentals of the Basic Four of Leadership model and leadership acceleration application. For skeptical managers who don’t believe in rewarding employees, this book will change your mind and management style.
The Bad: At times, this book feels redundant, with survey data sounding identical in each example; however, the data is compelling and differences are subtle but significant.
Action Item: Managers and leaders should buy this book to learn how to educate and motivate their workers to achieve desired goals. Knowledge workers should buy this book to discover what they may be missing in their current work relationship with their managers and leaders.
How the Best Managers Deliver Extraordinary Results
Most business books are based on conventional wisdom or someone’s personal work experience. In contrast, The Carrot Principle is based on a ten-year study of 200,000 managers and employees. There’s a strong correlation between companies that acknowledge excellence and bottom-line financial results, and Gostick and Elton use this data to build the case that an effective workplace is one where employees are recognized for their contributions. It also has high rankings for customer satisfaction, employee satisfaction, and retention - companies with these attributes have higher Return on Equity and Operating Margin metrics, compared to companies that do not have formal recognition programs.
Gostick and Elton explain how managers and leaders can use the Carrot Principle to improve their bottom line. Managers should become competent in the Basic Four of Leadership by using goal setting, communication, trust, and accountability.
- Goal setting: employees need to understand exactly what tasks they should accomplish individually, as part of a team, and corporation.
- Communication: managers must explain corporate goals to employees, keeping them informed about company initiatives or developments.
- Trust: managers earn trust by listening to employees, honoring commitments, and admitting mistakes. They should be more interested in the team’s success than their own.
- Accountability: companies should fulfill the promises they make to their employees and customers, while managers need to find a healthy balance between identifying employees’ mistakes and acknowledging their successes.
In today’s environment, employees no longer expect to spend an entire career with one employer. Altruistic managers, who firmly grasp their employees’ “desire for self-realization” work, create an environment that enables staffers to develop skills, assume added responsibilities, and receive recognition for achievement. The employees’ trust level rises in this setting. Even managers want to be effective, eager to attract and develop talent for their company. To be successful, managers and leaders must develop a style that is “less focused on tangible outcomes and become more able recognizing the overall impact of employee contributions.”
How Great Organizations Create World-Class Results
Executives establish their organization’s core values, but middle managers reinforce these values so that the workforce can internalize them. Culture is critically important, since it establishes ethics and principles followed by employees. Long-term success requires a strong corporate culture. Celebrations and appreciation make employees feel like integral parts of the company. Gostick and Elton define the building blocks of a Carrot culture:
- Day-to-day recognitions: these are frequent, timely acknowledgments of hand-written notes, thanking employees for extra effort in helping customers.
- Above-and-beyond recognition: achievements that merit personalized rewards with managers presenting in front of the honoree’s co-workers. This recognition should be used when someone saves the company time or money, offers a great innovative idea that the firm adopts, or exceeds a sales goal.
- Career recognition: these awards are typically associated with the traditional gold watch presented upon retirement, but Gostick and Elton also recommend using them to recognize employees on their first day of work, one year of employment, etc.
- Celebration events: company celebrations are a perfect opportunity to allow every employee to share in acknowledging corporate achievements.
Gostick and Elton offer Carrot templates, like the Recognition Frequency Log and Employee Needs Chart, creating the necessary infrastructure for employee recognition efforts. Manager Tools, such as Newsletters, white papers, case studies, and other recognition tips, are also available at their website.
How to Manage by Carrots
Managing by recognition sounds intimidating if you haven’t done it before. Fortunately, Gostick and Elton provide ideas on how you can recognize your employees, even with a limited budget. Some rewards are free, while others are a little expensive. They provide appropriate levels of recognition, matching the reward with the employee accomplishment: thank-you notes, bronze, silver, and gold awards.
- Thank-you recognition is for the daily, ongoing encouragement of small steps that lead us to success
- Bronze awards recognize one-time above-and-beyond behaviors related to your core values.
- Silver awards reward ongoing above-and-beyond behaviors.
- Gold awards recognize behaviors that produce bottom-line results.
Conclusion
The Carrot Principle is a must-read for middle managers and upper-level executives. Gostick and Elton demonstrate that employee recognition is a fundamental management practice that helps companies achieve its goals. This book provides a complete management program, helping middle managers understand the basics of leadership; how to create a Carrot culture; how to create an employee recognition program; and how to maintain your new Carrot culture. Knowledge workers should also read this book to learn how they can improve their job satisfaction by working with their manager on goal setting, communication, trust, and accountability.
About Adrian Gostick and Chester Elton
Chester Elton is a speaker and recognition consultant. He is the senior vice-president of Carrot Culture with the O.C. Tanner Recognition Company. Adrian Gostick is vice-president of Carrot Culture, a consulting and training division of the O.C. Tanner Company. Gostick earned a master’s degree in Strategic Communication and Leadership from Seton Hall University, where he is a guest lecturer on organizational culture.
Additional Carrot Principle Resources:
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