Feed Them Peanuts
 
Don Franklin, president of Flagler Electronics Corporation, knew that something was radically wrong in his company’s engineering department, but he couldn’t figure out exactly what the problem was, or what he should do about it. All he knew for sure was that for the past six months the attendance of the engineers that comprised this department was 40 percent worse than average (they were all calling in sick) and their former willingness to “pitch in” and work overtime on rush jobs had completely evaporated. In fact, when he told them last month that Flagler had a chance to get a large new customer if they’d all help over the weekend to develop a sales proposal, their response shocked him. Based on past experience he had expected them to go along with his request rather willingly and just arrange to take off a few days at a later date. In this case, however, those that were willing to work at all (only three out often were willing) demanded to be paid time and a half for Saturday and double time for Sunday and, in addition, to be given an extra paid vacation the following Friday. Don wasn’t happy with these conditions, but he knew that Flagler would lose an important new customer if he refused, so he went along with the engineers’ requests.
 
About a month later he was trying to figure out what was going sour in this formerly committed and enthusiastic department. As near as he could figure out, the only significant change in the department had been his appointment of a new engineering director, Mark Lawrence. Mark had been an engineer in the department for five years and was generally acknowledged to be a highly motivated (some said driven) person, one whose educational and practical experience had been outstanding. He replaced Lou Waters, who was stepping down as director. Don felt that Lou had been too much of “laissez-faire” leader. In other words, he tended to take a “hands-off” attitude toward the engineers in the department and to let them do their jobs pretty much as they pleased, as long as they got their jobs done. The engineers viewed him as supportive, in that he was always willing to “go to bat for them” with Don and the people in the other departments; however, the engineers did feel that he had a tendency for “sweeping problems under the rug” instead of confronting them. His aim seemed to be to keep all the engineers happy, and though he did not come across as a strong, decisive leader, he was successful in maintaining the morale of the engineers. As one of the engineers put it when Lou stepped down, “Lou made this place a good place to work He always made me feel important, there was never any tension, and everything went fairly smoothly. Sure, we had our problems, but what department doesn’t?”
 
Mark, on the other hand, turned out to be a very different type of manager. Don had been looking for a more energetic, “take-charge” kind of leader, and in this he was not disappointed. Mark jumped into his new assignment with tremendous energy and seemed to be everywhere at once. He would rise at 4:00 A.M., get to work at 6:00 A.M., and spend an hour setting specific assignments for the engineers in the department. By the time they began straggling in at 9:00 or 9:30 A.M., he had already gotten “a whole day’s work done” as he put it, and he would then spend the rest of the day speeding from place to place, constantly checking on each engineer’s progress, holding meetings with Don and the other managers, working out in the community talking with customers, and recruiting at the university for new engineers, for example. He made it clear to the engineers that he thought Lou Waters had been too much of a “softy” and that henceforth all engineers were expected to be in their offices from 9 to 5 and to take no more than a half-hour for lunch. He also moved quickly to consolidate his power and obtained an agreement from Don that no engineers were to discuss substantive matters with him without Mark’s approval. Mark thereby maneuvered himself into a position whereby he was clearly the one who controlled the department’s resources, as well as the engineers’ raises and promotions. At the same time, Mark began using a “carrot and stick” approach to motivating the engineers: by word and deed he made it clear to the engineers that those who did what they were told would get large raises, while those who did not would receive no raises at all. Similarly, Mark tied other rewards and punishments directly to performance: engineers who performed well (in Mark’s eyes) were rewarded, while those who did not or who disagreed with Mark were punished or at least not rewarded
 
While none of the engineers had quit yet (there was an oversupply of engineers in the area), it was still clear to Don that the department was having its problems. In addition to the problems mentioned above, the company physician reported that many of the engineers were complaining of stress-related ills like “knotted stomachs.” Another of Don’s managers mentioned to him over coffee one day that “the grapevine” had it that Mark was a highly ambitious individual.
 
Don didn’t know what to do. He had been maneuvered into the position of promising not to discuss substantive matters with the engineers themselves, without Mark’s permission. On the other hand, he might find himself without a viable engineering department. He suspected that Mark might be part of the problem, but on the other hand, he couldn’t see how Mark’s energy and enthusiasm and his habit of clearly linking rewards and punishments to performance could be dysfunctional. (In fact, he had just read an article in the Harvard Business Review explaining why rewards should be tied directly to performance.) Last week he had asked Mark if he really thought this carrot and stick approach was the best way to proceed, and Mark had replied, “Well, you know how those psychologists motivate monkeys, don’t you? They feed them peanuts.”