How to Spot, Test, and Manage Employees Stuck on the Kohlberg Ladder
By: John S. Morlu II, CPA
Stage 1: Obedience and Punishment
(“Don’t Hit Me, Boss”)
🚩 Red Flags:
- Obsessively asks: “Will I get in trouble if…?”
- Only shows urgency when you walk past their desk.
- Calls in sick but still posts nightclub photos on Facebook.
✅ Quick Test:
- Give them a hypothetical: “What would you do if you found $20 on the floor in the office?”
- Stage 1 answer: “If cameras are there, I’d return it. If not… umm…”
💡 Entrepreneur’s Strategy:
- Don’t waste time on moral speeches. They’re motivated by sticks, not sermons.
- Create automatic consequences: late = deduction, theft = instant dismissal.
- Think of them like traffic lights: they only stop at red if a cop is watching.
Punchline: Managing them without systems is like babysitting hyenas with candy.
Stage 2: Individualism and Exchange
(“What’s in It for Me?”)
🚩 Red Flags:
- In an interview: “Do you give staff loans? Per diem? Free lunch?” before even asking about the job itself.
- Volunteers only if there’s overtime pay.
- Sees company laptops as personal Netflix devices.
✅ Quick Test:
- Ask: “Would you help a coworker struggling with a task?”
- Stage 2 answer: “If they’ll help me back.”
💡 Entrepreneur’s Strategy:
- Align incentives tightly. They won’t build culture, but they’ll chase bonuses.
- Use performance-based pay, not trust.
- Treat them like mercenaries — effective if paid, dangerous if ignored.
Punchline: You didn’t hire a team player; you hired a vending machine with shoes.
Stage 3: Interpersonal Relationships
(“Like Me, Please”)
🚩 Red Flags:
- Smiles at you, badmouths you on WhatsApp.
- Shows up to charity events only for photo ops.
- Constantly fishing for validation: “Boss, am I your favorite?”
✅ Quick Test:
- Ask: “If you disagreed with me, would you tell me?”
- Stage 3 answer: “No boss, I could never disagree. You’re always right!”
💡 Entrepreneur’s Strategy:
- Don’t mistake flattery for loyalty.
- Keep an eye on gossip networks — they thrive here.
- If you need actors for “culture photos,” they’re great. For actual accountability? Forget it.
Punchline: They’ll clap for you today and sell your secrets tomorrow if applause is bigger elsewhere.
Stage 4: Authority and Social Order
(“The HR Stage”)
🚩 Red Flags:
- Loves quoting company policy to sound superior.
- Will stop others from bending rules — but quietly bend them themselves.
- Believes bureaucracy equals morality.
✅ Quick Test:
- Ask: “What if company rules were wrong?”
- Stage 4 answer: “Rules are rules. We must follow.”
💡 Entrepreneur’s Strategy:
- Great for compliance, terrible for innovation.
- Use them as your “policy police.” Just don’t expect fresh ideas.
- Protect against stagnation — too many Stage 4s and your company becomes a DMV office.
Punchline: They won’t steal the pen. They’ll just write a 12-page policy on why nobody else should.
Stage 5: Social Contract
(“Rare Pokémon Employees”)
🚩 Red Flags (Positive):
- Speaks in long-term language: “sustainability,” “impact,” “reputation.”
- Will push back against short-term gain if it hurts the company.
- Asks questions about vision, not just salary.
✅ Quick Test:
- Ask: “Would you still do the right thing if no one noticed?”
- Stage 5 answer: “Yes, because it matters to me and the company.”
💡 Entrepreneur’s Strategy:
- Treasure them.
- Give them space, autonomy, and a share in the upside.
- They are multipliers — the people who grow your dream while you sleep.
Punchline: They’re the unicorns. If you find one, feed them hay, not bureaucracy.
Stage 6: Universal Principles
(“Saint Employees”)
🚩 Red Flags (Positive):
- Returns extra per diem without hesitation.
- Will resign rather than compromise ethics.
- Quietly does right even when inconvenient.
✅ Quick Test:
- Ask: “Would you report a friend for stealing company funds?”
- Stage 6 answer: “Yes. Loyalty without integrity is betrayal.”
💡 Entrepreneur’s Strategy:
- Rarest of all — like spotting a snow leopard in the Sahara.
- Don’t exploit them; they’ll walk if you betray their values.
- Put them in leadership — they can anchor culture like nothing else.
Punchline: If you find one, you didn’t just hire staff. You hired the conscience you didn’t know your company needed.
Final Entrepreneur’s Checklist
When interviewing or managing employees, always ask yourself:
- Stage 1 → Are they just afraid of punishment?
- Stage 2 → Are they only here for the perks?
- Stage 3 → Are they performing loyalty for likes?
- Stage 4 → Are they hiding behind rules?
- Stage 5 → Are they long-term thinkers?
- Stage 6 → Are they guided by principle, even when inconvenient?
If 80% of your staff are stuck at Stage 1–3, you’re not running a business. You’re running a survival camp with air conditioning.
Author: John S. Morlu II, CPA is the CEO and Chief Strategist of JS Morlu, leads a globally recognized public accounting and management consultancy firm. Under his visionary leadership, JS Morlu has become a pioneer in developing cutting-edge technologies across B2B, B2C, P2P, and B2G verticals. The firm’s groundbreaking innovations include AI-powered reconciliation software (ReckSoft.com) and advanced cloud accounting solutions (FinovatePro.com), setting new industry standards for efficiency, accuracy, and technological excellence.