Leadership with individual rewards and punishments

Leading by example is considered an important means to influence followers. In most organizations, however, to influence followers, leaders use a variety of instruments. Most frequently, leaders possess the power to administer rewards or punishments to team members. Do individual rewards or punishments reinforce the impact of leading by example on team members' contributions? Because of confounding factors, it is difficult to research leading by example using field data. Here, we investigate the effects of leading by example and the effect of rewards or punishments on contributions in controlled lab experiments. We find that both rewards and punishments are more effective in fostering contributions than leading by example as such. When leading by example comes together with reward or punishment power, it does not improve on the effects of rewards or punishments as such in increasing contributions.