The document summarizes key points from the book "The Carrot Principle" which illustrates how strategic employee recognition is used by successful organizations to engage employees, retain talent, and increase performance. It discusses how case studies of companies like DHL and Pepsi exemplify the carrot principle in action. Recommendations are provided on how companies like Apple and Google utilize recognition techniques to keep employees satisfied and motivated, leading to business growth.

1. THE CARROT PRINCIPLE
How the Best Managers Use Recognition to Engage
Their People, Retain Talent, & Accelerate Performance
By
Deb Bandyopadhyay
@debadipb
www.debadip.co
Profit & Solutions Presentations Series

2. The Carrot Principle – The Book
About the Authors
Key Observations
Analysis
Contemporary Business Examples
Summary
Recommendations
Conclusion
References
AGENDA

3. THE CARROT PRINCIPLE: THE BOOK
� The Carrot Principle illustrates how ordinary organizations
have made themselves extraordinary through the use of
strategic employee recognition.
� The book shows how great organizations and great
managers succeed through living the Carrot Principle.
� Featuring case studies of effective recognition in some of the
world's most successful organizations,
� Case studies: DHL, Avis, Pepsi

4. � Chester Elton is an author, motivational speaker, trainer, and
employee engagement expert.
� He is Senior VP of the Carrot Culture division with the O.C. Tanner
Recognition Company
� Adrian Gostick is an author, motivational speaker, trainer, and
employee engagement expert.
� He is VP of The Carrot Culture Group.
ABOUT THE AUTHORS

5. KEY OBSERVATIONS
� Success in a business undoubtedly
involves and is determined by many
variables.
� The employer also needs to be
visionary.
� A well managed business is often
successful.
� The success of a business more
often than not centralizes itself on
the concept of business
management.

6. � Recognition gives coworkers a vision of the possible and the desire to
garner the rewards. But it is far from the only answer; the basics have to
be in place first.
� The Basic Four of Leadership:
❖ Setting clear goals.
❖ Communicating openly.
❖ Building trust.
❖ Holding people accountable.
KEY OBSERVATIONS

7. � The building blocks of a Carrot Culture
❖ Culture is how we do things: it is comprised of the rules, spoken or
unspoken, that we play by. And for a culture to succeed, it must
celebrate and reward excellence by recognizing it.
� Common forms of Recognition
❖ Day-to-day recognition
❖ Above-and-beyond recognition
❖ Career recognition
❖ Celebration events
KEY OBSERVATIONS

8. �The Carrot Calculator
This section intends to provide specific advice regarding how to provide
the perfect reward to achieve the right impact.
To do so, look at the following:
❖ Level: What level of award is appropriate for what behavior? Decide if
the successful behavior is:
❖ Spending: How much should you budget for recognition? You can
budget about $1,000 per employee per year for all the sorts of awards
he or she may win.
❖ Awards: What creative awards should you offer for excellent
performance?
KEY OBSERVATIONS

9. ANALYSIS
� The Carrot Principle discloses the pioneering outcomes of one of the
ultimate comprehensive management studies ever attempted. This
study, involving 200,000 people over a ten-year monitoring period,
demonstrates that the central characteristic of the most successful
managers is that they provide their employees with frequent and
effective recognition.
� Why You Need This Book?
� Authors Gostick and Elton show how the power of purpose-based
recognition produces astonishing increases in operating results.
� Further, they show how great managers lead with carrots – incentives -
and not sticks, and in doing so achieve higher productivity,
engagement, retention and customer satisfaction.

10. ANALYSIS
❖ The more involvement of employees in the business, the more trust and
reliability can be build.
❖ Monetary rewards doesn’t matter for each and every employees,
recognition do play major role than money.
❖ Serve the employee as per their needs.
❖ The conclusion carried out by interviewing 3000 employees in the year
2005 by HRM in Singapore.
❖ The expectation of employees from the organization are
❖ 1) Career/Learning Development Opportunity
❖ 2) Recognition
❖ 3) Pay and
❖ 4) Relationship with manager.

11. ANALYSIS
❖ As per the author Fred Reichheld, “Just a 5% increase in employee
loyalty can increase profits by as much as 50%”.
❖ The difference arises when management doesn’t understand the
employees and their needs.
❖ As per the study of Lawrence Lindahl, ”Management thinks that the
employees needs good wages and job securities where as the
employees needs ‘feeling appreciated’ and ‘informed’.”
❖ In nutshell, for the success and rapid growth of the organization, satisfied
employees, well informed culture and timely recognitions are the key
parameters.

12. ANALYSIS
Have lower turnover rates.
Achieve enhanced business results.
Are seen as far stronger in the Basic Four
areas of leadership, namely goal setting,
communication, trust and accountability.
When
Recognition is
Considered
Effective
Managers

13. CONTEMPORARY BUSINESS EXAMPLES
❖ Money is a reward, but recognition is fulfilling.
❖ Success in a business undoubtedly involves and is determined by many
variables.
❖ 26% of the 200,000 population size strongly believe in recognizing their
employees.
❖ Adoption of the strategy with or without their company’s permission.
❖ Significant business growth and return on investment.
❖ Elizabeth Martin-Chua , the vice president, Phillips Electronic in
Singapore.
❖ 3,000 employees preferred recognition for the contributions they bring to
the table, to remunerations received.

14. CONTEMPORARY BUSINESS EXAMPLES
❖Effect of a purpose-driven recognition.
❖Dee Hansford, former head of Walt Disney’s World.
❖Power of recognition - so simple but widely overlooked.
❖15 percent increase in guest attendance despite no pay raise.
❖Intense recognition skill training for managers.

15. CONTEMPORARY BUSINESS EXAMPLES
❖ Fewer turnover rates.
❖ Annual drain of $5 trillion on the U.S. economy.
❖ Loss of investments on employees.
❖ Exposure of trade secrets to competitors.
❖ Sylvia Brandes, the director of compensation KPMG LLP.
❖ Fever-like Recognition Culture Epidemic.

16. CONTEMPORARY BUSINESS EXAMPLES
❖ Managers are motivators
❖ Power of Communication
❖ Effective CEOs or managers control communication
❖ Employee involvement increases productivity
❖ Scott Northcutt, executive vice president DHL
❖ Sense of belonging

17. RECOMMENDATIONS
❖ APPLE WAY
❖ The average salary level of employees is $108,483.
❖ Giving employees a free I-phone (Not as compensation but the results
of their hard efforts and area of improvement).
❖ Rewarding executives by giving 3-5% of salary as bonus.
❖ The mission statement of Steve Jobs for the I-phone: “create a phone
that people would love so much that they would never leave the house
without it” said by an engineer at Apple.
❖ The Guru Mantra: “Apple corporate gave their employee the chance to
be creative , growth and also breaking the rule”.

18. RECOMMENDATIONS
❖ GOOGLE WAY
❖ Openness and giving voice to employees.
❖ Keeping employees satisfied and motivated can lead to growth.

19. SUMMARY
� “The Carrot Principle” basically involves the results of a ten year period
research aimed at identifying management concepts and knowledge
that back the success of many business enterprise.
� The book talks of a missing ingredient which is relevantly analogized
with an “accelerator” that a company needs to boost productivity and
overall efficiency of the operations that increase the company’s success.
� All well-off companies had an element in common and this is that the
employees were constantly given often and effective recognition in their
work done within their occupational jobs.

20. CONCLUSION
❖ Building trust, relying on employees and recognition.
❖ Trust and recognition are everything in the organization.
❖ Employees are the real assets of the business and alike the assets in
production house needs oil and power to work efficiently, Employees too
needs recognition and trust from employer.

21. REFERENCES
� Fina, M. A. (2009). Perspectives on Managing Employees. New York: Cengage
Learning.
� Gostick, A., Elton, C. (2009). The Carrot Principle: How the Best Managers Use
Recognition to Engage Their People, Retain Talent, and Accelerate Performance.
New York: Simon and Schuster.
� Gostick, A., Elton, C. (2010). The Invisible Employee: Using Carrots to See the Hidden
Potential in Everyone. New York: John Wiley & Sons.
� Holbeche, L., Matthews, G. (2012). Engaged: Unleashing Your Organization's Potential
Through Employee Engagement. New York: John Wiley & Sons.
� Karmakar, A. (2011). Principles and Practices of Management and Business
Communication. New York: Pearson Education.
� Marciano, P. (2010). Carrots and Sticks Don't Work: Build a Culture of Employee
Engagement with the Principles of RESPECT. New York: McGraw Hill Professional.
� Pearson, J. (2008). Mastering the Management Buckets: 20 Critical Competencies for
Leading Your Business or Non-Profit. New York: Gospel Light Publications.