A motivational tactic that uses a reward and punishment system to encourage improved performance or behavior. Companies are slowly learning that the carrot and stick approach to management is ineffective—employees are much more motivated to do a better job when they are recognized for their hard work.
Reward and punishment used as persuasive measures, as in Management dangled the carrot of a possible raise before strikers, but at the same time waved the stick of losing their pension benefits . This term alludes to enticing a horse or donkey to move by dangling a carrot before it and, either alternately or at the same time, urging it forward by beating it with a stick. [Late 1800s]