Employers offer perks and benefits to incentivize certain behaviors. Want employees to save for retirement? Offer them a 401(k) match. Want your employees to take care of themselves? Offer them free mental health services. But not every incentive achieves its target outcome.
“People designing incentive programs may think, 'If you build it, they will come,'” says Hayley Blunden, assistant professor of management at the Kogod School of Business at American University. But a paper by Blunden and several co-authors, published this past fall in Organizational Behavior and Human Decision Processes, shows the limitations of that belief.
Partnering with Evidation, an online platform that rewards healthy activities, the researchers ran a field experiment with about 2,000 participants. For two weeks, participants received 40 times the platform’s typical reward for walking, earning $40 for every 200,000 steps taken (as opposed to the usual $1 reward). All of the participants were made aware of the bigger reward through Evidation’s standard weekly email stating each user’s point balance. In addition, half of the participants received a kick-off email about the increased incentive and an email every other day reminding them.
Participants in the group that received the frequent reminders took, on average, 367 more steps daily than those in the other group. What’s more, people in the group that didn’t receive the reminders didn’t walk any more than people who received the original, smaller reward of $1 for every 200,000 steps.
The takeaway: Increasing the incentive alone didn’t change behavior—making the incentive conspicuous did.
The implications for HR leaders are wide-ranging.
As this paper shows, the presence of incentives alone doesn’t always create the desired behavior. “Without making sure that [incentives are] conspicuous, that people have the opportunity to become aware of them—but not just that initial awareness, a repeated awareness over time—they may not be effective,” says Blunden.
How can companies use this insight to increase employee participation in the benefits and perks that they offer?
1. Prioritize the incentives that are most important to your company and your employees.
Not every benefit or perk offered to employees warrants 10 reminders. “You don't want to get into a place where you're overwhelming people with making every single thing conspicuous all the time,” says Blunden. If you’re constantly bombarding employees with reminders to contribute to their 401(k) and sign up for an employer-sponsored gym membership and take advantage of the company’s free mental-health services and use all of their PTO, the reminders will likely have diminishing returns. Worse yet, you could annoy your employees.
Blunden recommends starting with programs that matter the most to your organization. For example, say that one of your top priorities is to convince more employees to come into the office. In that case, you might focus your reminders on a month-long program to subsidize lunches Tuesdays through Thursdays, sending a series of messages about the program before it starts and throughout its duration.
2. Get creative with your communication.
Think of ways to make your offerings more salient. If you’re trying to incentivize employees to come into the office through subsidized lunches, for example, some of your messages could include photos of other employees enjoying lunch in the office. Blunden and her co-authors also found that simply bolding and highlighting text about an incentive increased behavior uptake.
Companies should also think beyond emails for making incentives conspicuous, Blunden says. An all-hands meeting, for example, is a place where leaders can introduce a new incentive: “Throw it up on a slide,” says Blunden. If it’s an event that occurs with a more regular cadence, like an employer-sponsored fitness class, “there could be some type of text-based system that is emphasizing that incentive at the time that that's occurring,” she adds.
3. Communicate what you’re doing, and why.
When Blunden and her co-authors asked participants if they wanted to be reminded about an incentive for one of their studies, only about half said they did, despite the fact that people earned more money when they were reminded. “So there is a lack on the part of many to believe that this is actually helpful,” she says.
When messaging employees about a specific benefit, explain why you’re reminding them. You can link to the paper by Blunden and her co-authors to show employees that making incentives conspicuous actually improves uptake. You can also acknowledge employee feelings directly by saying: “We know this might seem like a communication that you may not think is important,” says Blunden, “[but] here's why these communications…are adding value to you and your colleagues.”
Charter’s guide on how to leverage the “fresh start effect” to influence employee behavior change.
Prioritize the incentives that matter most to your organization and your employees and make them conspicuous.
Think of ways to make your offerings more salient through bolding and highlighting text, including photos, etc.
Communicate to your employees why you're making the incentive conspicuous.
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