Behavioural Economics and L&D/HR

I come across a lot of interesting stuff in my Twitter timeline. I follow too many interesting people you see. Mostly, though, there are too many clever people out there studying the human condition in a plethora of ways which I try to understand better. Even topics like SEO and politics inform how we as humans interact, react and connect. We’re just becoming more and more sophisticated about lots of facets of life. For some, this is too much. We are getting too sophisticated about too many things and no one can possibly understand everything. For sure I don’t understand nearly enough about particle physics and applied mathematics and what actuaries actually do.

But the topics I am coming across are constantly keeping my (short-attention spanned) brain very much fired up. Behavioural economics has been on my mind for a long time. It’s a topic of interest that David D’Souza and I are interested in and we have some good academic discussions about it.

What is it?

Behavioural econonics is about offering people a choice of this or that, and encouraging them to take positive action.

Give me an example.

If organ donors are asked to opt out of being a donor, the registered rate is 80% against asking people to opt in.

Give me another example.

If you send a text message to people asking them to pay their bill, you get a higher payment rate than sending a letter or email.

Isn’t this just clever marketing?

In a way, yes. More than that, though, it’s about encouraging people to do a positive action, with the option of least resistance, and still allows for people to not act.

Where you going with this, Sukh?

I’m interested to start exploring how do we use the concept of ‘nudging’ and applying it in HR practises.

Like what?

You know what’s a pain? Annual appraisals. Forget for a moment that there are other ways to hold performance reviews, what would thinking from a behavioural economics perspective bring to this problem faced by thousands of companies across the world?

Let’s take the problem of completing the requisite documentation that accompanies a review meeting. Normal incentives include hitting 100% completion rate and showing off to the business. Or HR beat managers round the head for not completing the documentation hoping it’ll result in completed documentation.

A BE perspective might suggest that we create a leaderboard for the organisation/department for completed documents. I don’t think that’s clever enough, possibly belittles the process and is a bit like gamification.

What else?

One of the regular problems L&Ders face is a lack of attendance – be that online or face to face. Engagement with the learning content aside, the normal way to deal with this is to beat the manager over the head for not supporting their team member to attend the training hoping that this will encourage better behaviour in the future.

A BE perspective might suggest that we send a personalised text message / social media message to the individual the day before saying something like “Hi Bob, we look forward to have you in the xxx session tomorrow”. That’s too basic an answer and I don’t think it’s well thought through.

I’m at proper early doors with my thinking on the application of BE to workplace stuff.

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Sukh Pabial

I'm an occupational psychologist by profession and am passionate about all things learning and development, creating holistic learning solutions and using positive psychology in the workforce.

15 thoughts on “Behavioural Economics and L&D/HR”

  1. Reblogged this on 101 Half Connected Things and commented:
    Some thoughts –

    i) if you ever get the chance to chew things over with Sukh then do. He’s a genuinely caring and smart guy. Double threat (but not threatening).

    ii) if you need documentation handing at your org then why not opt for carrot rather than stick and to make it an even nicer carrot why don’t you help someone else too? Encourage people to complete your forms (if you must…) by giving money to a charity your org supports for every returned form then run a charity type barometer to measure progress (PS if you decide to do this please let me know, I don’t have my own org to play about with at the moment – I have, in the past, offset the carbon footprint of the forms)

    iii) I’d build on the personalised text by talking about crowd behaviour/social proof – x% have attended so far this year. Also there’s an opportunity to utilise the fact we like to remain consistent to pledges/promises by asking people to highlight why they want to attend and what they want out of the course in writing when they sign up… It’s not a barrier – it’s potentially a sensible check.

    Just ideas – always just ideas.

    1. to build upon your build of iii) the personalised text, if you are aiming for creating a path of least resistance and a positive action which is to attend the class, it could be a good idea to phrase it around the benefit to the employee?
      “We’re looking forward to seeing you in the classroom at XX o’clock tomorrow. XX% have attended this year and rated it as useful to their career, this class will go towards your CPD/objectives/training requirements/ other employee benefit.”

  2. I think there’s 3 principle challenges here…

    Firstly, who is the positive action for? Especially in the HR/L&D space, is a positive action for the organisation a potential manipulation (negative action) or just a better presented proposition (win/win)? How does the ego of the L&D professional play a role if their interest & motivation is high attendance rates? It may not mean the content is any good… or that there wasn’t something better the participants could (should?) have been doing…

    Secondly, what happens if we use behavioural economics with something that is already broken or not fit for purpose? Do we plaster over the cracks and actually lose insight? Do we even know what we’re actually creating when we try to “nudge” something?

    Thirdly, I think going anywhere near this either requires a deep level of expertise or a strong awareness (mindset?) of the practical and ethical challenges and how to trial different approaches. If you’ve not come across them then I think “The Behaviour Insights Team” (http://www.behaviouralinsights.co.uk/about-us) are probably the kind of people who need to be involved/consulted. Would be interesting to see them work on a real challenge in the L&D space!

    Coincidentally, I saw on twitter last night this video from David (D’Souza) http://t.co/vk0WEkuw1j which I think probably compliments this post.

    1. It’s the Jurassic Park Problem. Just because we can doesn’t mean we should. I think it is right for the profession to be investigating the opportunity, as long as development of the ethical frameworks and principles that sit alongside this are given as much time (or more). Interestingly I got to see Cialdini speak about influence vs manipulation recently and his answer that it should only be used for an obvious good (e.g. charity) didn’t cover off the complexity of the challenge for me. If every charity can increase giving to them is that a good thing? When does a choice stop being a choice and start being a triggered reaction? It’s a really interesting field.

      1. The ethics of the Jurassic Park problem is the one that I’ll be concerned with mostly. However this plays out and whatever thinking it might produce, it has to be with right intent and unharmful.

        Also, who knew Jurassic Park could present the basis for a debate on ethics?

    2. Like these challenges.

      1) Completely agree on the bias of the positive organisational action. No clear response to it yet, just a recognition there’s more to explore there. I also fully recognise that some will see all this as manipulation which is not the intent BE promotes.

      2) Totally recognise that. Think there’s big room there for accepting and fixing reality before setting about using BE as a way to motivate other behaviour.

      3) I was thinking of including the BIT in the post. Have just realised they’re now a company unto themselves!

      Yep saw that last night. It’s what inspired this post đŸ™‚

  3. Having been privileged to work with the BIT on a regeneration project I can only say that I was impressed with both their academic and moral integrity. The hep they provided us was invaluable. We have used many of their techniques to good effect in other parts of our organisation too.

  4. I love how you share your own exploration and learning here. What you are describing in your examples sounds to me like gamification so it’s got me interested in the intersection between the two…

    I managed multisite operations for many years and I learned that people would find a way to sabotage what they don’t agree with, understand, make sense. So I’d be dawn to understanding what is happening systemically in relation to why people aren’t attending courses, submitting documents etc, and engage them in that enquiry to make the shift. Getting them to comply doesn’t necessarily make a shift…

    Curious.

    1. I’m cautious that what I described as a way to nudge is gamification, and that’s really not what BE is about.

      This Guardian article I think provides better examples of how BE works and its outcomes. http://gu.com/p/3fh47

      The systemic is important to understand, this is more about a policy or similar which encourages positive action. Hopefully the article helps share that better.

  5. Sukh, that Guardian piece was very helpful. The ideas reminded me of the work done in by Prof Cialdini on the psychology of persuasion (captured in this book – “Yes!: 50 Secrets From the Science of Persuasion” – Goldstein & Cialdini).

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