The reinforcement perspective proposes that behavior can be modified by the use of rewards and punishments. Carrot-and-stick methods of motivation focus primarily on extrinsic rewards (raises) and punishments (pay cuts). Research shows that money does increase motivation in the short run although those who received a pay freeze or a pay cut would consider the situation unfair if others received raises. Equity theory says that those who perceived the situation as unfair would not be motivated at work. Also, many critics of the carrot-and-stick methods argue that extrinsic rewards undermine intrinsic rewards, bring about unintended consequences, are too simple to capture organizational realities, and replace workplace cooperation with unhealthy competition.

With the economy still in a slump, some companies were freezing pay raises or even cutting pay for some employees so they could offer substantial raises to people considered star performers. As a motivational technique, does this practice seem like a good one to you? What might be some disadvantages of this technique? Consider you current situation what techniques highlighted in the book have you observed to be effective?