The most contentious issue to have dogged humankind, especially the ones who are the leaders, is the question – reward or penalty, what works best? It’s not an issue that is peculiar to business organisations. It’s a challenge in every field where there is a group involved. Be it a school, theatre group, business – you name it, and you have it.

The issue here is to extract the most that a participant can give. And we are talking about productivity in its most efficient avatar subject to the participant’s ability. Therefore, the question that gets asked here is how to get the most from a group, performance-wise, through effective individual participation.

While writing this, I recalled an Indian IT organisation’s HR experiment. They broke up a team into three groups: the first had more self-motivated performers than not-so-motivated ones, while the ratio was reversed in the second group. The third represented ratio of motivated to not-so-motivated workers that existed in the company.

What is interesting is the year-end result. The first group (which had more self-motivated participants) surprised the observers with the performance results. The laggards in the group, who were never in the reckoning in the race for career growth, nearly matched the stars’ performance and showed mettle that their managers never knew they had!

For the second group, the result was the reverse: the performers returned an indifferent performance.

In the third group, the members behaved how they were expected to behave.

What was the learning? The apparent learning was that motivation and willingness to perform do not necessarily depend on the reward as we generally tend to understand it (something connected with material benefit). But here the performance quotient got mapped to a competitive excellence.

In the third group, the laggards were de-motivators and their overwhelming presence sapped the spirit of the performers. It ate into their zeal to perform.

This case study is often referred to in the management schools for discussion. Because there is theory ‘X’ and then there is theory ‘Y’.

Theory ‘X’ assumes that employees are lazy and they need constant direction and are motivated by the fear of punishment.

Theory ‘Y’ on the other hand assumes that employees want to do a good job. It further assumes that money is not really a motivator. So intangible rewards, carrot by any definition, work the best.

In our example, the first group bears out theory ‘Y’. Being self-motivated, they are competitive achievers. What about the second group? This is where the debate sneaks in. The challenge here is to make the laggards imitate the achievers and not vice versa. But how does one achieve it? Will pure carrot work? Or should one wield the stick? Or should one go for a mix?

There is no clear answer. This is where leadership should step in.

Motivation doesn’t flow merely from monetary benefit. Notwithstanding that people work for money, the satisfaction of achieving a goal is something that needs to be brought to the fore and instilled in those who lack this realisation. Otherwise, no societal organisation can emerge efficient.

Probably, benevolence tempered with sternness in the leadership would work. The leadership must make it clear across the organisation that the organisation cares but will not suffer fools.

That perhaps is the best carrot-and-stick policy.