By working to understand the true motivations of their employees, HR leaders can create more effective employee engagement ideas.
If your organization is looking for employee engagement ideas and wondering why your employees' behavior is sometimes so hard to predict, it could be time to take a step back and consider that humans are often inherently irrational beings. While seemingly a controversial idea, that concept is actually the foundational theory behind behavioral economics.
Behavioral economics is a relatively new field of study. It captured headlines last year when University of Chicago professor Richard Thaler, considered by many as the father of behavioral economics, won the Nobel Prize in Economic Sciences. The author of "Nudge," a best-selling book about helping people make better decisions, Thaler has convinced many economists to put more stock in human psychology.
That list includes Jordan Birnbaum, ADP's Chief Behavioral Economist. He believes that Thaler's theories can help employers change their perspectives about employees and what they should expect from them. "Most human beings are irrational, at least some of the time" Birnbaum says. "That's what the study of behavioral economics is all about, and that's why it's important to consider around employee engagement. When we're making predictions about people's behavior and decisions based on rationality, we're often guessing very poorly."
The good news? Irrational behavior is actually quite predictable. Knowing what to expect from people, even if it's irrational, should make it easier to conceptualize and implement successful employee engagement ideas that motivate workers to deliver their best with consistency.
Motivated to Not Lose
Organizations want to engage their employees to strengthen culture, boost productivity and foster growth, but they often struggle to move past traditional engagement programs that don't necessarily fit in today's fast-paced work environment. Drawing on psychological, social and environmental influences on human behavior, an understanding of behavioral economics gives HR leaders and other executives a wellspring of principles and techniques they can use to tailor their engagement practices to the modern workplace.
Once employers embrace this way of thinking, "they can craft initiatives and programs based on how employees are actually going to react, instead of how they should; this is particularly important when considering how to introduce these things," according to Birnbaum. The sooner employers recognize that employees behave, and ultimately work, in ways that run contrary to long-held expectations, the sooner they create employee engagement ideas that resonate and have a strong chance of taking hold.
Consider money. Humans are twice as motivated to avoid financial loss as they are to secure a gain. "The impact of losing $20 is twice as powerful as the impact of gaining $20. Now, that's irrational. The impact of gaining and losing should have the same amount of impact. But for reasons most likely due to human evolution, losses sting far more than gains feel good, so we're much more motivated to avoid a loss," Birnbaum says.
So how can HR practitioners make the most of this loss over gain impulse? It boils down to a choice of words. "If I wanted to incentivize my leaders to participate in leadership training, for instance, instead of saying, 'Think of all the promotions and advancement that you could gain,' I could say, 'Think of all that you stand to lose by not participating.'" Substituting "gain" for "loss," makes the statement twice as motivating to the leaders.
"It's all about understanding these quirks of human behavior to help people get to the outcomes they actually want, and get over any irrationality that stands in the way of making the best choices. This understanding allows us to be creative in how we can apply our knowledge of the human condition, and that all comes from behavioral economics," he continues.
Finding Emotional Triggers
Behavioral economics reveals the biases, mental shortcuts and unconscious emotional drivers shape employees' decisions. Understanding those elements of behavior will help HR avoid making the wrong assumptions about employees and instead let them recognize what workers really expect and need from their organizations. For example, leveraging the motivation to avoid loss could nudge employees into joining a health wellness program. HR leaders just need to figure out the most effective way to trigger the motivation.
Much of the heavy lifting of engagement involves understanding what actually drives or depletes it, instead of what "should," and then introducing initiatives that tap into that psychology, Birnbaum says. For example, people are more engaged when they receive recognition, and when they have friends at work. So an employer that introduces a project that prompts acknowledgment from leaders or creates work groups that allow for camaraderie will be effectively engaging employees, and by extension supporting the company's performance. Weekly meetings that call-out employee achievements and company outings aren't frivolous, because they ultimately improve productivity.
"Oftentimes people think an employee should appreciate having a job, good compensation, etc. and as such be engaged at work. That might be so if people were truly rational, but they're not," he adds. "So it's important to dig deep into what actually is responsible for employee engagement."
Find Time for Engagement
Continual gains in technology keep improving how people work and communicate. New technologies in particular have made learning on the job more engaging and instructive. These advancements allow employers to move past traditional eight-hour training sessions, that by nature are less impactful in driving learning than are short and frequent training sessions.
"You want people to learn with training that is short but frequent," Birnbaum reports, "because it maps to how people actually learn." Frequency keeps the subject of the training mentally "available," while the brevity of each training session makes the cognitive load easier to bear. "As a worker, I'm more interested in a learning project that sends weekly emails that take two minutes to read," he adds.
HR and leadership need to carve out time for employee engagement. Birnbaum thinks that "if the demands of work make it seem as if there is not enough time to teach new skills or mentor, eventually engagement will suffer, productivity will wane and those unrelenting workloads will become self-defeating."
Ultimately, to find a successful engagement formula the employer has to make a conscious effort to figure out what makes their employees tick, where their motivation comes from and what outcomes would make them happy. "You have to make engagement a priority. But merely making it a priority doesn't mean it will be successful, so there has to be a sophistication to the strategies that make them dynamic and meaningful for workers over a long time," he concludes.
And that's exactly how behavioral economics can help. By framing ideas and taking actions that relate to what employees really want — and not what you believe they want — it's possible to more effectively engage the workforce.