Fear is the birth of cruelty and the death of reason, wisdom, and finally, action. (Robert's Rule #26)

Fear, as our 'leaders' have discovered, is a powerful motivator. For most people, one of the most powerful fears is of losing their job, in fact, for some people, the fear of the loss of their livelihood is even stronger than their fear of death, because it means something very significant to those who depend on them. Because of the power of this fear, employers the world over become some of the most powerful entities known. However, this fear comes at a price, for fear is the birth of cruelty.

When you, as a manager, threaten someone's job and engage this powerful motivator, your 'direct report' will likely tow-the-line. They will likely become quite complacent. They will also likely quit innovating, start protecting their assets to the detriment of the team, and start looking for a place of employment where they believe they will be respected, which means their productivity will generally plummet and they will become a drain on morale. In short, what you will have created is a negative reinforcement cycle that will likely spiral out of control.

On the other side of fear, however, the lack of fear is an equally strong motivator. The lack of fear can be the result of either having nothing more to lose or a true feeling of safety.

The lack of fear that is the result of having nothing to lose - that finds its origination in desperation - is dangerous in the extreme, as The Art of War notes. It is the recognition of this fact that has led companies to treat terminated employees as criminals as they are escorted from the building, often without even being given access to their personal effects. The creation of this type of 'enemy' is a mistake of the highest order and you should always try to maintain the appearance that even those discharged have something more to lose. Helping them move on to another position (if that is at all possible) is a good start. After all, just because they don't fit in with your organization that does not mean they would not fit in quite well somewhere else. If you can honestly, objectively review their contribution you will (nearly always) find some benefit they provided to the organization that you can leverage as they look for another position.

On the other end of the lack of fear spectrum - when a person feels safe in their job - people are more likely to take risks, stretching and growing. They are also likely to innovate, be more relaxed and positively affect team morale, in essence become a powerfully positive asset. It is the creation of these positive reinforcement cycles that we need to create. One of the most powerful effects of these positive reinforcement cycles is the energy they contribute to the team, as study after study has shown that 'winning' begets 'winning' and nothing so strongly counters winning than fear and trembling, because fear is also the death of reason, wisdom, and eventually, action.