The Carrot Principle: How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance (Updated & Revised Edition)
Adrian Gostick and Chester Elton
Free Press (2009)

Note: The review that follows is of the updated edition (published in April, 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. Gostick and Elton added a new chapter to the book based on the resukts of this study. Here are some of the study’s other key points:

• 65 per cent of respondents report that they weren’t recognized at all in the preceding year.

• 79 percent of people leaving an organization report “lack of appreciation” as a key reason.

• Of those reporting the highest morale at work, 94.4 per cent agree that their managers are effective at recognition.

• Organizations that effectively recognize excellence tend to be more profitable and can have more than three times the return on equity than those that do so the least.

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 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.”

A creative and appealing 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!