There are two ways to motivate people: through a sense of gain, eg reward for achievement and praise for positive action and results; or through a fear of loss, eg the threat of losing status, money or, ultimately, your job.

The latter was the mainstay of 1980s management technique but has been replaced in recent years by the positive reinforcement of modern management that has proven again and again to produce a more stable and solid workforce and ultimately a more successful organisation.

Sadly, this news appears to have taken longer to trickle down to the recruitment industry. There remain far too many small- to medium-sized players who manage their staff through aggressively administered key performance indicators (KPIs) and basic fear.

This is partly due to the nature of the sector in that most new recruits are young impressionable school or college leavers lured by the potentially high rewards, yet are completely unprepared for the bullying techniques used to turn them into revenue-generating automatons. But it is also due to the vicious circle created when new companies are started by people bred in this negative environment of badly administered KPIs who have never known it any other way.

The companies that adopt this approach will always remain small as they are not built on respect and loyalty, both essential for a strong and solid business. Respect builds a team, not fear.

Don’t get me wrong, there is definitely a place for using KPIs as an aid to management and to motivate and encourage staff. They are an essential tool for managers and staff alike to measure performance and to create a challenge to achieve more. But there is a subtle and simple difference in how they are used.
It may seem obvious, but think about two teams of equivalent consultants in the same sector and with the same skills. One team is told that they will lose something if they do not achieve a target, eg their commission or their jobs. The other team is told that they will win extra commission or a weekend away if they achieve the same target.

Who succeeds? In the short term it may not be obvious which team will achieve their results. In fact it is likely to be both and may be for some time. However, it is over the longer term that the effects start to show.

The threatened team will begin to show signs of stress and falling morale, resentment will develop, staff turnover will be high (the cost of which everyone knows is extortionate) and the business they work for will gain a negative reputation in the industry. Conversely, the positively motivated team will endure, they will continue to achieve targets, but in addition will have stronger loyalty, elevated morale, less stress and lower staff turnover.

Conversely, the positively motivated team will endure, they will continue to achieve targets, but in addition will have stronger loyalty, elevated morale, less stress and lower staff turnover.

Ultimately, it is only possible to grow a larger business with these motivated teams.

Managing through fear is a short-termist technique and ultimately will cost the organisation that employs it more than any perceived lack of achievement through ’weak’ management. It is this ignorance of the psychological element that is the cause of many company’s stagnation and inability to grow further.

So, whether you are managing a small team or running an entire organisation, if you want to build a long-term business with staff who are loyal, hard working and motivated it is vital that hard work and success are rewarded in a positive manner and their achievement does not merely mean removing a threat of losing something until another day.

Hugh Woods Ballard is managing director of Day Webster Recruitment