Optimizing the performance of teams and individuals is one of the biggest challenges any leader faces. And it comes down to figuring out the approach that your people will best respond to. Rewarding overperformance? Punishing underperformance? Or a bit of both?

But which is the way to go?

Rewarding overperformance:

The behaviourist B.F. Skinner’s operant learning theory argued that by adding a rewarding stimulus after a behaviour, that behaviour becomes reinforced and is therefore more likely to recur.

As a leader, if you make a conscious effort to reward those at work who are exhibiting your company’s values through the quality of their output, then this will likely lead to them repeating this effort because they begin to associate that standard of work with some sort of reward (and this can be anything from a monetary bonus, to an extra day of paid leave, to a ‘thank you’ note).

This positive reinforcement can have a knock-on effect – other colleagues will see that by working to a certain level, they too would be rewarded, and so will mimic this behaviour. This leads to a chain reaction of improved productivity and engagement. In theory at least.

In reality, there is a fine line that needs to be walked with this.

Although one study found that 92% of workers were more likely to repeat a specific action after receiving recognition for it – leaders must be careful not to promote the idea that working your fingers to the bone will get you rewards. This can lead to burnout in staff, as well as a noticeable downwards effect on their wellbeing, with productivity falling just as quickly as it had risen.

However, calibrated correctly, rewarding good behaviour can deliver a significant improvement in output, as well as staff that feel they are being appreciated for their efforts.

Punishing underperformance:

Skinner also created the concept of operant conditioning, which is essentially the opposite to operant learning theory and involves taking something good or desirable away to reduce the occurrence of a particular behaviour.

In corporate terms, this is most commonly translated as: if you are not meeting expectations, you will be at risk of losing your job. Some leaders opt to promote a widespread feeling of job insecurity in their workplace to foster this idea of competition and to stoke fears of job loss to motivate workers to be at the top of their game. Some commentators have suggested this is likely to be Elon Musk’s gameplan for Twitter where he has sacked half the workforce.

However, Harvard Business Review conducted a series of surveys to explore whether perceived job insecurity actually made people work better. What they found was that job insecurity drove a culture of presenteeism with workers going out of their way to look as productive as possible – but with the quality of the output waning. This is most likely due to the fact that feeling the need to always look busy can lead to stress build up and have increasingly detrimental effects on an employee’s health and performance.

But underperformance can have virus-like tendencies when unleashed in the workplace. If high-performance employees see that their low performance colleagues are not being reprimanded for putting little in, then this can lead to a domino-effect of high performers starting to work less hard because they do not want to pick up the slack of others around them. This mindset can spread like an infection amongst the office, and so it is extremely important for employers to manage those who are deemed low performers. But, the way you approach this requires a leader to be clear about what they need from this member of staff in order to help them improve – this list of top tips is a great place to start.

So, reward and punishment both have their pros and cons. The secret is knowing which to use in a given situation – and deploying them in a professional, purposeful way.

Copyright OrgShakers: The global HR consultancy for workplace transformation founded by David Fairhurst in 2020