Benefit from the Hawthorne effect.
This is a phenomenon first noted way back in 1924 - several years before the era's leading "can-do" guru, Herbert Hoover, led the nation into the Depression. Elton Mayo set out to study the effect of lighting on productivity at a Western Electric plant in Hawthorne, Illinois. He divided workers into two groups. For the test group, he increased the illumination in their work area. Productivity went up. For the control group, he left the lighting the same. Productivity went up.
That made no sense to Mayo, so he tried another study. He took a group of female employees, gave them regularly scheduled rest periods, company paid lunches and shorter work weeks. Productivity went up. Eighteen months later, all those perks were eliminated. And productivity? It went up once again.
Mayo concluded that productivity increased every time he paid attention to workers.
So here's a tip. Pay attention to your people.
You might never get them to leap out of bed at 6:00 AM with delight at the prospect of heading off to work. But you can make them a lot happier and a lot more productive once they arrive. And you might just prevent them from ever asking, "Why am I wasting my time here?"
Of course there's always the school of management exemplified by the CEO who told Fortune magazine, "Leadership is demonstrated when the ability to inflict pain is confirmed." If that's what you believe and you think that works for your business and helps get you where you want to go, good luck.
You're going to need it.
Still, Hawthorne effect or no Hawthorne effect, effective long term management means rewarding behavior you wish to encourage, and only that behavior. Don't claim you want long range thinking then base bonuses on the short-term fix. Don't expect innovative thinking if you only promote those who march lockstep to the company beat.
Tip: Rewarding accomplishment is usually more effective than rewarding behavior. Whenever possible set quantifiable goals, track progress towards those goals, then reward their accomplishment.
And of course you always want to reward each employee according to what motivates them personally: more responsibility, more recognition, pats on the back, perks and privileges, more freedom, more challenges, fancier offices, exposure to decision makers, titles, parking spaces, more flexible hours, the opportunity for more creativity. Whatever it might be for that particular individual.
Even a lunch or dinner with you can be an extremely meaningful reward for some people. Just as it could be the worst possible punishment for others.
Additional training can be a particularly effective reward. It demonstrates the commitment the company has in the employee's future. Yet it's giving them something they give right back to the business.
Never reward indiscriminately. When we invaded Granada in the 1980s, there were more medals awarded than there were soldiers in the campaign. You don't find a lot of people bragging about their Granada combat citations or framing them and hanging them over the mantle.
I know of one manager who sends out a steady torrent of "You're Fantastic" cards. Everyone gets them. For everything. All the cards are the same, and none ever mentions a specific reason for the acknowledgement.
"He probably fills them out in advance at home at night then writes in the name as needed," one of his clerical people decided. (I later discovered that was actually true.)
Most of the cards quickly find their way into the trash. Some people do save them: for the "Pearl Harbor files" they keep to defend against possible disciplinary action or dismissal. And more and more of these people are keeping Pearl Harbor files. Though all they ever hear from the boss is how wonderful they are, he's developed such a reputation for insincerity that nobody trusts him.