‘Rewards and punishment are the lowest forms of education” – Chinese philosopher It has been accepted that the most effective way to motivate people in business is to use money – reward by paying more and punish by limiting pay. In everyday language, this is the carrot-and-stick method of motivation. It is a method of using an external measure as the key to motivation.This method was promoted by psychologist B.F. Skinner. His behaviorist approach to dealing with people supported motivating people through rewards and punishments. His premise is to dangle a bigger carrot to encourage the preferred behavior. In essence, Skinner’s approach promotes treating people as no different than domesticated dogs or horses.For those of us who believe there is a distinction between animals and humans, psychological research has brought us redemption. This research shows that the benefits of motivation by reward and punishment are limited.The writer is a clinical psychologist and certified life coach, who helps young adult males, adults in transition and business executives achieve positive goals. He has offices in Jerusalem and Tel Aviv. Morris.email@example.comIn fact, psychologist Edmund Deci has shown that rewarding achievement, while beneficial in the short term, may actually be detrimental in the long term.He created an experiment in which two groups had to configure assorted cubes into different complicated designs. During each session, he observed the groups through a window, seeing if they would continue to try to solve the puzzle. He repeated the session three times, each with slightly different conditions.During the first session, Group A and Group B were treated equally. During the second session, Group A was given the incentive of receiving money for every design it completed correctly. For the third session, Group A was told that no additional funds were available, and it was not being paid to complete the puzzle designs.The result for Group A was that it was significantly less motivated during the third session when it was not paid than it was in the second session. Group B, which never received a monetary reward, slowly improved its performance and showed increased interest in the challenge. Deci completed two similar experiments, with the same results. He interpreted this as indicating that money can offer a short-term boost in performance, but the effect wears off.In fact, it can even reduce a person’s longerterm motivation to continue.Another limitation of monetary reward is that it can limit creativity. People become so focused and stressed to attain the reward that their “creative juices” can be limited.Rewarding with money does have some applications. Money can be effective for routine tasks that are completed with minor changes throughout the day. This is also the case for a task that needs to be repeated often to meet a deadline. Business examples include finishing and processing of paperwork, shipping out orders or completing telemarketing calls within a time frame.An alternative to relying on money for motivation is to focus on people’s internal motivation.It means offering them the chance to do what interests them. Deci also showed that people can be motivated by the challenge of a task. When people are motivated in such a way, they think and work more independently and creatively.Daniel Pink wrote two books that emphasize the importance of just such internal motivation in our present work environments – The Whole New Mind and Drive. He concludes that in our new world of global commerce, companies are required to tap into the internal drives of their employees because it can inspire their creativity. And creativity is a necessary component for business success.Pink highlights that markets are becoming more accessible to competition from companies all over the world. As a result, companies need to be more innovative and “cutting edge” to compete. Any simple, uncreative jobs will be outsourced to an undeveloped country. Therefore, business needs to tap into creative energy to develop the new products and services necessary for survival and growth. This need for innovation applies to all companies, whether service industries, energy, pharmaceutical or hi-tech. Pink’s examples of internal motivation are Wikipedia and Firefox. These are two “volunteer” business projects motivated by people’s personal motivation. And these companies beat out Microsoft, a profit-driven business.These companies were started by nonemployees who found their reward in the challenge and accomplishment, not in money. It was due to internal motivation.Tapping into people’s internal motivation is not restricted to Internet technology business.Internal motivation is based on three primary drives – for autonomy, for mastery and for purpose.These are drives that are uniquely human and can inspire us and help us inspire others to creative accomplishment.Autonomy as applied to work is the capacity for self-direction and the freedom to do challenging work. It affects what we do, when we do it, how we do it and with whom we do it. It is having choice at work over your task, time, methods and people you work with. In most cases, it is hard to design but can be more valuable than a pay raise.Mastery is the drive to get better and better at something that matters to you. It is almost as if the performance of the task is its own reward.It means you are so absorbed in the task that you are willing to put in endless time and effort to excel.Purpose is when you are committed to achieve something in service of people or a goal beyond self-interest.Taking advantage of this understanding of motivation and implementing it can be a big challenge. There is no simple solution like giving a bigger financial reward. It requires personal attention to each employee as an individual.This has led to the growth of effective executive coaching. Such coaching helps business executives apply motivational principles to key employees in their organizations.The Gallup organization, which studied multinational companies, came up with an effective method it called Employee Engagement.It developed this into a measurable index and then built a system to coach business leaders in its use. The system includes some of the following principles: • Letting employees know their opinion counts and encourage their input • Making sure goals are clear and known and giving employees the freedom to achieve them • Creating a learning environment, with opportunity for growth and challenge • Learning how to give effective personal attention.As quoted by Gallup, “When human drives and needs are met, the positive emotions that result encourage employees to care about the overall welfare of the business. And, more importantly, it’s hard to create passionate, engaged customers without passionate, engaged employees.”It is just as important for those of us who work independently to feel accomplishment and engagement. Check yourself to make sure you are tapping into your own internal motivation and creative energy. Your ability to develop customers and clients depends on it.