#11: Negative incentives and subpar business results.
People rebel against rules to assert autonomy.
Negative incentives — such as the threat of punishment — conflict with the desire for autonomy. Autonomy, along with mastery and purpose, are the main drivers for most people at work, especially knowledge workers.
Hence an organisation with much bureaucracy or with pervasive negative incentives — such as comes with managing by fear — will not create engaged employees, and hence not be as successful as it could be otherwise.
These characteristics reduce variation and lead to consistency and efficiency, which were highly valued in the stable environment of the manufacturing firm. But these are no longer the main drivers for success in a changing environment which relies on innovation.