Recruitment needs to move beyond carrots and sticks

If the recruitment industry is going to change, where do we start?

These changes are likely to come from increasing pressure to adapt – escalating the rate of change and volatility – defining a new normal in the business landscape; one of ever increasing change and slowing growth.

While we can debate what needs to happen, there is little debating that what people in recruitment are doing now is not perfect. The problems that businesses are suffering from, to name a few, are:

•  a lack of growth
•  a lack of trust and confidence in business and its leaders
•  falling employee engagement
•  falling productivity
•  hypercompetition
•  skills shortages

While the industry can look to tweak the edges of the technology and refine processes, we feel that the answer resides within creative and innovative people. Those who cut headcount quickly, or no longer exist, struggled to realise this, and those who are thriving are making headway into understanding people at their core.

To be able to navigate out of this and continue to thrive, businesses need to attract, retain and develop the right people to be able to innovate and create the future.

Once these people have been identified we need to be able to unleash the latent potential that resides within them (and every one of us) and drive excellence. If this is the case, the starting point must be very clear understanding of what motivates and drives people to work.

The problem is that in general, recruitment is still operating on an outdated idea of what motivates people and this is affecting our abilities to attract the right people. Hiring processes are still largely based on a system of what motivates and drives people in the workplace that is restricted to the principle of praising certain behaviours you want (the carrot) and punishing behaviours that you don’t (the stick).

While carrots and sticks still play their part, the problem is that science shows that if you reward something you don’t always get more of it and if you punish something you don’t necessarily get less of it.

In his bestselling book Drive, Dan Pink highlights a few of the studies that shine a light on the inadequacies of carrots and sticks…

In a study carried out by MIT for the Federal Reserve Bank, students were given a number of tasks and offered a monetary reward that increased based on their performance. The results were interesting; as long as the task required only mechanical skills, the reward structure operated as expected. However, once the task required even rudimentary cognitive skill involving conceptual and creative thinking, larger rewards led to poorer performance.

The researchers then took the study to rural India where the same monetary reward was significantly higher, relatively. With the top prize equating to 2 months salary. For those offered the top prize, again; the higher rewards resulted in worse results.

While science and understanding has moved on, the business world has been slow to adopt these principles. These ‘if/then’ rewards represent the typical motivation scheme in most organisations. These findings were re-enforced by scholars at The London School of Economics who analysed 51 corporate pay-for-performance plans and concluded that financial incentives “can result in a negative impact on overall performance.”

Understanding what drives and motivates people must be the starting point for changing how we do business. If we continue to operate from a flawed assumption about what motivates people then we are destined to fail.

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