Customer Reviews

The Carrot Principle: How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance [Updated & Revised]

5 star:		(21)
4 star:		(13)
3 star:		(3)
2 star:		(0)
1 star:		(2)

 

 

Here are the big ideas from this book.

Positive consequences, such as praise and recognition, are great tools for encouraging people to try new things and to continue desired behaviors. They send a message about what managers value.

In work teams where people say they have been praised recently, productivity, morale, and measures of engagement are more likely to be high and people are more likely to stay with the organization.

In teams where people say they have not been praised recently, productivity, morale, and measures of engagement are more likely to be lower and people are more likely to want to leave.

Companies with high productivity, morale and engagement and low turnover are more profitable.

Managers rate themselves higher on giving praise and recognition than their subordinates rate them.

There are no breakthrough, thought-leader ideas here. There is nothing really new.

The jacket blurb implies that this is based on exciting new research. It's not. It's based on research by the authors' firm that reinforces other research, including Gallup, Blanchard, a boatload of academic researchers and my own study of top performing supervisors. So if you're looking for new or breakthrough stuff, you don't have to buy the book and you don't need to read any further.

That doesn't mean that you won't get value from the book. The points the authors make are worth making again and again. Praise in all its forms is the most powerful and most underused tool for growing great, engaged teams.

Because the book is devoted, essentially, to a single idea, you get lots of depth on that idea. Some of those are just small insights.

On page 84, the authors make the point that in service industries, the perceived value of the product is tied to the behavior of the person that the customer comes in contact with. I knew this at some level, but seeing it in print got me to reflect on it and what it means.

Other things are more substantive. The authors provide details on different types of recognition: Day-to-Day; Above and Beyond; Career; and Event. They offer forms and lists and charts.

If you haven't read much about the power of praise and recognition this is a good place to start. The book covers most of the basic research, puts it in context, and gives you tools for putting it to use.

Remember that the authors wrote this book to sell their services and products. Sometimes they try way too hard to stretch their single bed blanket of product over the double bed of the subject. Sometimes they struggle to name things "carrot" or paint them orange, when simple description would do just fine.

If you're looking for a tool to use with managers at our company or in your peer group to increase the amount and effectiveness of legitimate praise, this is a good book to buy and use. You may also want to investigate the authors' other products.

More than 10 years ago, an organization that I headed, Leading Division Presidents 100, looked at the question of how to improve employee motivation and effectiveness. From that research, it was clear that improving employee recognition could be an important element among many. Since that time, I've looked in vain for a book that described how to implement such a recognition program. I'm pleased to say that The Carrot Principle fills that void. Congratulations to the authors.

The authors begin by making the case for why recognition works in making organizations more successful:

1. Where employees feel more recognized, return on equity is higher (2.4 percent in the lowest quartile compared to 8.7 percent in the highest quartile. (This finding did raise a question in my mind -- why are the companies in this research study all so unprofitable in ROE?)

2. Where employees rate managers highly for recognizing employee contributions, customer satisfaction, employee satisfaction, and retention are usually higher.

3. People with high work motivation almost all (94.4 percent) say that their managers are effective at recognition.

4. 79 percent of those who quit jobs cite lack of appreciation as one reason for leaving.

How much are companies spending that provide good employee recognition? Basically, it's about $1,000 a year per employee. Many of the employers cited in the book report feeling that they enjoy economic payoffs that are more than 20 times that cost.

The authors offer a Recognition Effectiveness Model on page 178 that captures the essence of how they see the cause and effect working:

1. Where employee recognition is higher, goal setting, communications, trust, and accountability are higher.

2. These benefits are accelerated by recognizing what matters most which helps with alignment, reinforcing the desired culture, company values, and business objectives.

3. These benefits can be further accelerated by doing recognition in the right way, increasing impact by being inclusive, meaningful, and performance-based.

4. Business results improve because the program is relevant to manager tasks and improvements in employee engagement that lead to better employee retention, productivity, customer satisfaction, and profitability.

The methodology for putting this model in place begins with measuring, then assessing, designing, training, executing, and then reiterating those steps.

The statistical findings are described in detail in appendices B, C, and D which I recommend you read.

But a lot of people have reported that recognition is important. You probably already believe that or you wouldn't be considering this book.

I found the most beneficial parts of the book concentrated in how to create a carrot culture (of recognition) and details of how to manage by carrots (recognition). Before leaving that subject, let me say that I found the carrot metaphor troubling. Recognizing people isn't the same as dangling a carrot in front of an employee's face. Recognizing people is more about respect, caring, gratitude, and paying attention.

Basically, most managers don't provide much recognition. Why not? Although this book suggests all kinds of false beliefs are the reason, my research shows that the primary reason is that managers who don't get recognition don't give recognition. So the good example has to begin at the top. That's counter to most company cultures where the CEO is viewed as some kind of superman or superwoman and the rest of the organization's people are expendable.

With training and guidance, that circumstance can be changed. I found the materials in chapters 9 and 10 to be most helpful in explaining what kind of recognition is appropriate for what kinds of accomplishments and 125 recognition ideas. I was also pleased to see that the authors understand that recognition is individual; each person has a different idea of what they want. You need to provide what's wanted . . . or it doesn't work.

It's not easy to provide meaningful recognition. When you do, the results can be magical (for everyone). When you do it badly, you are often worse off than where you started (having made people feel like they are unimportant rather than simply ignored by a busy manager).

My main fear about this book is that some readers will see this as just another way to provide low-cost benefits for which employees will put forth very valuable efforts. In that context, recognition can become another kind of manipulation, and that always backfires.

Let me leave you with two words of warning:

1. Recognition doesn't work alone. You also need to provide opportunities for people to learn, grow, accomplish, feel fulfilled, and achieve many other important satisfactions. In that sense, this book is too narrow to be totally useful.

2. Recognition takes time and consistency. Don't start unless you intend to continue or you'll eventually make matters worse.

As global market competition increases, the focus on retaining effective and productive employees is ever more intensive. Consequently, the premise of this book revolves around empowering employees with substantive rewards as a powerful and meaningful method of achieving concrete results. Although, The Carrot Principle, by Adrian Gostick and Chester Elton, was well researched and offered concrete evidence for an often overlooked aspect of work place satisfaction, it was a boring and redundant piece of work that could've been shortened.

As an HR practioner, business executive and manager, I found "The Carrot Principle" and indispensable tool. The authors were able to put into concrete and real terms a very simple, manageable and understandable way that helped me to employ the use of recognition in my business, and life for that matter. The principles they outline in this book will help you, no matter what your business or trade.

This book by Gostick and Elton offers extensive research that makes an undeniable connection that the "carrot" a metaphor for recognition is the missing ingredient to help managers inspire performance and accelerate results.

I found that before I was through I had highlighted and earmarked almost every page - the research is that compelling. A must read for busy managers striving to achieve greater business results.

The best of the carrot series. Great case studies and wonderful new data showing the power of employee recognition done well - highly recommended!

Amazing ... 79% of employees who quit their jobs indicate their key reason for leaving as a lack of appreciation. More money? No. Less benefits? No. Nasty coworkers? No. They leave because they feel unappreciated.

Enter my department ... Human Resources. We conduct exit interviews and try to figure out why the eager applicant we hired a few months (or years) ago is now sitting on the other side of the desk, happy to be "getting out." We begin recruiting again, hopeful the next person will stay longer than this one did.

In the meantime, we are reminded of the cost of turnover, and are charged with the responsibility of finding a better hire. And so the cycle begins again. While many companies, like mine, believe turnover to be mostly caused by poor selection, a 200,000-person study by HealthStream Research found that managers who do a better job with employee recognition have lower turnover, as well as better business results.

Most of you who are reading this review are well aware that turnover eats up a chunk of a company's resources, but perhaps you don't know turnover is estimated to be a $5 trillion annual drain on the U.S. economy. The only way to break this cycle is to keep our outstanding performers engaged.

Let the drums roll ... enter The Carrot Principle, a book which can save the day for businesses all over the world. Adrian Gostick and Chester Elton teach us how to create a carrot culture, how to determine whether employees are engaged and satisfied, and how to calculate the level of reward to give. And their 125 recognition ideas will give your managers the tools they need to spread the carrot culture faster than the spread of the flu.

Whether you're a manager, a district manager, or a CEO, you need to learn that it is statistically impossible to be considered a "trusted, communicating, team-building, goal setting" manager unless you are effectively using praise and recognition. Don't be one of the 74 percent of leaders worldwide who still don't practice recognition with their employees.

So what are you waiting for? Buy this book to propel your company to a "world-class" organization, and end this cycle of costly turnover once and for all.

This book gets to the underlying problem (and the solution) in our world today. We have to put service before self, and others first. When we sincerly care about others, loving each other as commanded, anything is possible.

Note: The review that follows is of the updated edition (published on April 7, 2009) that includes results from a major global study in which more than 200, 000 managers participated.

Various surveys conducted among millions of workers indicate that "feeling appreciated" is of great importance to them. In fact, it is ranked #1, #2, or #3, together with "doing work that has value" and "working for an employer I respect." Nonetheless, believe it or not, a recent study conducted by the O. C. Tanner Company indicates that 74% of leaders worldwide still don't practice recognition with their employees. In this book, Adrian Gostick and Chester Elton explain why there is reluctance "to embrace the power of recognition." At this point, I need to make a distinction between formal (institutional) recognition and informal (situational) recognition. Probably no other organization makes more effective use of formal recognition than does Mary Kay. With all due respect to pink Cadillacs, the fact remains that this company has identified hundreds of other ways to say "Well-done!" and celebrate outstanding performance.

With regard to informal recognition, I wish to share a personal experience that occurred when I arrived at a client meeting (it is a Fortune 50 company) and was being escorted from the reception area to the CEO's office by his administrative assistance. We walked past one office and I stopped, having noticed through the open door a framed "something" on the wall. It was the office of a senior vice president and he was not there. "Everyone notices that," she said. "Here, take a look." We entered the office and I examined what was under the glass: more than a dozen multi-colored Post-its, each personally inscribed with brief, congratulatory comments addressed to "Warren" for a winning proposal, an excellent presentation, etc. "He's so proud of those little notes that he went out and got them all framed." I cannot say that "Warren" would rather have the Post-its than a new Cadillac but that's beside the point anyway. Everyone appreciates being recognized. They welcome appreciative recognition. The 74% of managers who deny or ignore those facts are making a very, very serious mistake.

With regard to this book's title, Gostick and Elton explain that in business, "a carrot is something used to inspire and motivate an employee. It's something to be desired. In fact, it tops the list of things employees say they most want from their employers [or at least is among the top three]. Simply put, when employees know what their strengths and potential will be praised and recognized, they are significantly more likely to produce value." In this context, recognition's function is to serve as an incentive and the reward (as the Post-its example indicates) need not be monetary. "In fact, "Gostick and Elton note, "one-third of the people you give a cash award to will use that money to pay bills."

They organize their material within three Parts: The Accelerator (i.e. leadership needed to establish and then sustain a "carrot culture"), Carrot Culture (i.e. its design, "building blocks," and operations), and Managing by Carrots (i.e. determining the nature, extent, and funding of awards). They provide managers with a cohesive, comprehensive, and cost-effective program by which to "engage their people, retain talent, and accelerate performance." According to recent Gallup research, only 29% of the U.S. workforce is positively engaged (i.e. loyal, enthusiastic, and productive) whereas 55% is passively disengaged. That is, they are going through the motions, doing only what they must, "mailing it in," coasting, etc. What about the other 16%? They are "actively disengaged," doing whatever they can to undermine their employer's efforts to succeed.

So, a combination of formal (institutional) and informal (situational) recognition "accelerates business results. It amplifies the effect of every action and quickens every process. It also heightens your ability to see employee achievements, sharpens your communication skills, creates cause for celebration, boosts, trust between you and your employees, and improves accountability." Those who read this book and then decide to introduce or revise a recognition program will need the convincing, indeed compelling support for doing so that Gostick and Elton provide in their brilliant book. I presume to add that establishing and then sustaining a carrot culture requires recognition initiatives that create a climate of appreciation. Don't wait until you have recruited an army of those who share your vision, don't wait until a full-blown program is in place. Show your appreciation now, at every appropriate opportunity, if only with a brief expression of praise as I do now with Adrian Gostick and Chester Elton: Well-done!

I've tried some of these ideas in my company before but it really got me thinking about what to do NOW and how I can energize my employees. I just had one of my employees die and a number of my company's associates went to the funeral with me. I was amazed at what the people who did the eulogies said about this fellow who had worked for us for about a year and a half. There were things about him that I had no idea about. So I wrote a message to my employees about it. As I was finishing up the message I read a chapter in this book that covered exactly that. You have to manage one person at a time and really get to know people in order to really motivate them. How true it is!