Washington, June 21 (ANI): Workers respond better to the promise of reward, or carrots, than they do the threat of punishment, or stick, a study suggested.
The study previous research that says the threat of penalty is more effective for getting increased effort, said Karen Sedatole, associate professor of accounting in Michigan State University's Broad College of Business.
"Our findings show what carrots work better than sticks - in other words, workers respond better to bonuses than penalties," Sedatole said.
Sedatole authored the study with Margaret Christ of the University of Georgia and Kristy Towry of Emory University.
The researchers conducted a scientific experiment in which participants played the role of supervisor and employee. Some employees were subjected to a bonus program implemented by the supervisor, while others worked under a penalty system.
Employees subjected to the bonus exhibited more effort and this was driven by greater trust in the supervisor.
Sedatole said the study is the first to identify this trust factor.
"What this means for companies is that employees who receive bonuses for their efforts will work even harder, increasing productivity and potentially bolstering profits. But those subjected to penalties tend to distrust the supervisor and, because of that, work less hard," Sedatole said.
Examples of penalties in the business world include pay reduction, demotion and sanction or other disciplinary action, such as a salesperson with lower performance getting less territory to work.
The study appeared in The Accounting Review. (ANI)
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