Daily Burst of Knowledge - Does Carrot and Stick Compensation Work?

Hey everyone, it's Anthony Honesto. And this is my daily burst of knowledge for Monday, February 13, one day before Valentine's Day. So been thinking ahead of recent conversation around compensation, particularly bonus structures, right. So the question was, do we really think compensation structures that include this, this carrot actually work? And you know, I've said for many times, I think what happens is when you have a compensation structure, whether it's a sales structure or bonus structure, that people figure out how to game the system so you don't get the end result that you're asking for. And especially if you subscribe to Dan Pink's methodology and the book Drive, Right. It's actually they studied it and said it didn't work. This carrot and this sticking carrot idea in compensation. So he talks about this, this idea of paying market rates on salary and then hitting three things which were autonomy, purpose and mastery, and that those three things combined and again, you have to make sure you're hitting market rates. But if you can fulfill a strong sense of purpose, mastery, where someone maybe is learning new things or getting better at what they do and a certain level of autonomy, then that is the way compensation should be structured. So it's interesting, I mean, there's a lot of things in HR that are being re looked at, which is really exciting because we know a lot of stuff hasn't worked. So when you think about compensation, think about is it just better to pay a good base salary, maybe even better than market rate, and then pull back on the bonus and see if that works as long as again, you're hitting those three things in terms of mastery, autonomy and purpose. So that's my daily burst for today. See you tomorrow. Thanks.