Fear has a bad reputation because, well, it's no fun. However, suppose you define motivation as the desire to take action. In that case, fear is a mighty force that will typically powerfully impact the choices and behavior of most sentient beings. If you fear something enough, most of us will do anything to avoid it. That can be powerful and useful. History is littered with examples of this cause-and-effect working powerfully and effectively. That is likely why when you search the phrase "fear as a motivator in the workplace, … you quickly return over 1,000,000 results. On my browser, there were over 1.4 million. So, this isn't a new topic for contemplation and analysis.
Why is that? As we said above, fear can be a very effective tool for human motivation. Ignoring all of the ubiquitous war examples, let's look at what can produce fear at work: fear of failure, being seen as incompetent, fear of letting others down, fear of being SEEN as letting others down, or even losing one's job are all powerful motivators that will impact human behavior. While these actions may sound harsh, research has shown that this type of motivation can lead to improved employee performance and increased productivity.
On the one hand, using fear often will lead to an increase in what you are incenting (some form of "productivity," usually … doing more, faster) or the ability to make rapid changes in direction and, ultimately, higher performance. Fear focuses people on outcomes and impacts – both the good and the bad. If you have led people for some time, you know all too well how effective, and I would argue that is not necessarily a terrible thing if the circumstances warrant it.
Before the dear reader is too horrified, using fear as a motivator has high costs, both obvious and more subtle. You will often get more of the behavior you want, primarily grounded in and defined by compliance. How do I avoid the pain being promised? Those studies also show that the more simple the task at hand, the more fear will help produce short- and medium-term gains. The problem is that in today's work world, many jobs are all about complex, interrelated outcomes that cannot easily or directly be manipulated by yelling about more productivity and people working harder. Do you want more solutions or better solutions? One is easy; one is much more complex. Do you want the parking lot (these days that is more metaphorical than actual) full at 6:30 pm (somehow indicating people are working hard), or do you want breakthrough thinking and problem-solving? Again, one is easy, and one is not.
When can motivation by fear be useful?
When the leader or an organization decides that the circumstances are so significant and dire, they need to create immediate focus and effort, even knowing that this tactic could cost them dearly over time. Complete clarity and focus, critical reprioritization, and a critically important change in direction – these are all circumstances where organizations have and do use fear as a tool. Yes, you are thinking, but it's very destructive and effortless to overuse it … I agree. If every time a leader decides they need fast action, they become Darth Vader and promise a painful death to everyone who disappoints them, well, that wears off over time. People figure they are doomed anyway, so it's just a matter of time for them, so the urgency they felt when this stick got pulled out of the bag the first few times fades into something that only has negative impacts because it has lost its positives.
Suppose managers are too harsh with criticism or overly punitive with disciplinary action. In that case, they risk creating a hostile work environment that can trigger rebellion (there's that Star Wars analogy again) or rather just a sullen, defeated workforce that trudges towards the latest goal. Used well, while fear of negative consequences can sit on one side of the formula, positive feedback and rewards can and should be positioned on the other. Like many powerful leadership tools, good results can happen when positives and negatives are both a part of the equation.
While fear can be an effective tool for motivation, it is an "expensive" tool. It burns trust, energy, the willingness to collaborate and share, and the team. Lastly, it burns large amounts of personal engagement – giving efforts and thinking because you care about the outcomes. It touches on things you care about, strive for, and value. That energy is optimal because it builds upon itself, the classic 1+1 = 3 or 7.