Unlocking Human Behavior: A New Lens for Reward Strategies

For decades, the field of rewards has operated on economic principles: offer incentives and you'll get performance. The proverbial carrot. But what if we've been undervaluing an essential part of the equation—the human element? Welcome to a blog that dares to infuse behavioral science into the discourse on reward strategies.

Why Behavioral Science Matters

Rewards don't exist in a vacuum; they are part of a larger human ecosystem. Understanding behavioral science can offer us a deeper comprehension of how different reward models impact human behavior—both instinctual and rational.

Humans are a mix of instinctual and analytical thinking. In the book, Switch: How to Change Things When Change Is Hard, Dan Heath and Chip Heath write about the Elephant and the Rider. Dr Ben Shenoy recently explained this in the context of rewards: If the elephant is the instinctual thinking, and the rider the analytical thinking, who is in charge? Pay is eminently emotional to the employee, but rational to the plan designers. Is the rider guiding the elephant, or the elephant taking the rider where the elephant wants to go? The best outcome is when both are in equilibrium. Can our rewards systems capture this complexity? Emerging models are tapping into gamification, immediate rewards, layered benefits and other innovative pay approaches that appeal to both sides of the human psyche. Here is a recent article which lays out these arguments clearly.

Real-World Application

Already large multinational company are in the process of revamping their rewards systems, employing behavioral economics to shape incentives. They have initially found that employee engagement skyrocketed, particularly when rewards appealed to both emotional and rational decision-making centers.

However, the point here is not that you believe what you’re reading. Rather, is to motivate everyone to be proactive, not reactive. To use analytics not just as a reporting tool; they should act as your compass. Identifying behavioral patterns can help us preempt issues before they become problems and to optimize rewards accordingly.

Community Input: Your Experiences

Behavioral science not only provides a fresh lens to look at rewards but also challenges us to be innovative, inclusive, and data-driven. As professionals in this space, it's time to widen our horizons and delve deeper into human behavior. I invite you all to share your thoughts, experiences, or even hesitations about integrating behavioral science into reward strategies. After all, the goal is a collective shift toward more human-centric reward systems.