Many workers are unsettled by the restructuring, reductions and downsizing, salary cut-backs, and redistribution of work loads that so many private and public organizations are experiencing. Since 1900, management theory has evolved from a view of people as threats to the organization which need to be contained and their human inconsistencies restricted, to a view of people as assets. Twenty years ago, Peter Drucker warned managers that the inescapable fact was that the traditional way of managing people (Theory X or carrot and stick) would no longer work. This approach does not work for manual laborers in developed countries, and nowhere does it work for information and knowledge workers. Punishments such as fear and hunger are no longer available to the modern manager.
Even low-paid workers no longer fear they will starve if they are fired. Fear, even when it can be evoked, has largely ceased to motivate workers. Fear has become a demotivator. The spread of education has made people more employable in developed countries such as the United States. In a highly organized society, people have greater knowledge of opportunities and greater possibilities of gaining access to new employment. The use of discipline to motivate workers to perform is an inadequate approach also. If misused, disciplinary action, like fear, can cause resentment and resistance by workers, demotivating them to a greater degree.
Financial rewards became less and less of an incentive. The increasing level of material expectations made the monetary reward worth less, and therefore, less effective as a motivating factor for the worker. When people receive money to motivate them, they are not satisfied with a little more the next time (and certainly not with less), they expect much more. Economic incentives were becoming rights rather than rewards in the 1960s and 1970s. Using financial incentives became self-defeating. The price eventually ...