As a kid, I'm sure you would have faced situations where you wondered whether your parents would approve of what you were about to do. When faced with that, you would have reacted in one of the following ways. If you feared the consequences that your parents would force upon you if they found out what you did, you would have either backed out or decided to go ahead and done your best to conceal the fact that you ever did it from your parents. A majority of the kids fall in this category. If, instead of fear, what drove your apprehension was the thought that you might disappoint your parents' trust or judgment in you, you would have tried to reason out why your parents might disapprove of the act and tried to think of a logical explanation to back your action. If you had failed, you'd drop it, and you'd have gone ahead if you could convince yourself to do so. A third category would be those that would not have cared about their parents' approval in the first place.

This kid-parent relationship is comparable to an employee-boss/organization relationship when it comes to the carrot and stick policy in place.

Every organization has its own way of rewarding (carrot) desirable behaviour and punishing (stick) undesirable behaviour. The rules that decide what actions will be rewarded and what will be punished are usually quite clear to employees. Every employee knows what needs to be done to get the carrot and what needs to be done to avoid the stick, and he usually does all of that.

As a result, employees often find themselves in situations where they are about to either do are avoid doing something based on the consequence in terms of the carrot and stick. Much like the kid who fears the consequences of her parents finding out.

While this was a good policy to have in organizations in the industrial era, where the work needed to be done was primarily assembly-line like, it can be fatal in the knowledge era. Today, the future prospects of organizations depend on the entrepreneurial spirit of the employees, and their dedication and commitment to the brand they work for.

In an age when innovation at every level is necessary, and when relationships and connections mean a lot more than optimizations for lower costs or higher profits, you want your employees to be like the minority kids in the example, and do things if they feel convinced that that is the right thing to do, secure in the knowledge that they will have the opportunity to reason out with their bosses, to make their case later on, instead of worrying about the consequences for themselves rather than for the brand or the organization.

The knowledge era calls for a re-look at the age-old carrot and stick policy.