We make a lot of decisions every day. Some simple, some difficult, and some we don’t even notice. How can we make our employees make the right decisions in a way that they grow personally and contribute effectively to the organisation? Read about nudge theory in practice - while it is used to influence employee behaviour.
“On an average, a human brain makes 35,000 decisions each day,” says Barbara Sahakian, a clinical neuropsychology professor at the Cambridge University and the author of the book Bad Moves: How decision making goes wrong, and the ethics of smart drugs. Just choosing what we eat constitutes at least 200 decisions. Fascinating, isn’t it?
Now imagine, if we were consciously making all these decisions. Ugh!
To make our lives easier, our brains take simple shortcuts to make most of the decisions, without involving our conscious minds – called heuristic decision making. In fact, 90% of the decisions made each day are unconscious, says Susan Weinschenk, a behavioral psychologist. In an online class that she conducts Brain and Behavioural Science, she goes on to say
“We often like to think that we’re very rational and logical. But we’re not. And, if you want to really reach people, if you want to communicate with them, if you want to persuade them, you need to figure out how to talk to the unconscious part of their mind.”
Human beings are extremely emotional and the decision-making process is greatly affected by emotions. So much so that, some behavioral economists have suggested that only up to 30% of the decisions we make are rational, and 70% emotional.
Emotions constitute powerful, pervasive, and predictable drivers of decision making. One characteristic of emotion is that it compels us to do something - pushes us towards taking an action. And with time, most organizations have effectively used this understanding to subtly influence employee behavior by nudging them to make better decisions.
To put into simple words, a nudge is nothing but a simple, subtle cue that naturally leads people to make choices that YOU want them to make. It’s not about penalizing them in any way or limiting their freedom if not acted in a certain way, but to help their decision-making process easier
Behavioral economists, Richard H. Thaler and Cass R. Sunstein, in their book Nudge: Improving Decisions about Health, Wealth, and Happiness define nudge as “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives".
Nudge theory suggests that positive reinforcement and indirect suggestions can influence people’s actions and decisions – most of the time, without them even realizing it. Let’s look at an example of how nudging is applied in real-world – A lot of websites that offer a tiered pricing model often highlight a particular pricing model to be the “most popular” of all. By telling the website users that the particular pricing model has been adopted by most users in the past, they are only trying to influence the new users to go with that pricing model as well.
Richard Thaler emphasizes on three ethical principles when it comes to nudging:
Though formal theories and studies have only emerged recently, people have probably had exhibiting nudging behavior for as long as history can take us (The story of the Potato King is a great example here). The great thing about good nudges is that it can be applied to any aspect of our daily lives - be it in educational institutions, government policies, political agendas, or whatnot. And the field of business is no exception.
A greater number of companies are connecting the dots these days between happier employees and improved productivity and in turn, happier customers. While there are a number of ways to influence employee behaviors, we try to explore some of the methods to effectively nudge employees towards better organizational results.
"To do great things is difficult, but to command great things is more difficult." - Friedrich Nietzsche
We have all come across the phrase “He was the best manager I have ever had”. But do we really know what it takes to become a great manager? Being a good manager is definitely more than just driving your employees towards better performance and better results. Great managers are the ones who often succeed in guiding, shaping, and steering their teams to greater heights of engagement, job satisfaction, and efficiencies.
Here are some simple tricks that will nudge managers to become better versions of themselves:
Being a successful manager can be challenging at times. In order to succeed in this position, it is crucial for you to remember that your success is directly dependent on your team. So, as a manager, building a team that is engaged, motivated, and driven is the key to your success as well.
“Gratitude can transform common days into thanksgiving, turn routine jobs into joy, and change ordinary opportunities into blessings.” – Proverb
We all feel elated when we are genuinely thanked by someone or appreciated for the work we have done, don’t we? That is because human beings have an innate desire to be appreciated and valued for what work they do.
Employees who feel valued and appreciated often are the ones who have deep job satisfaction, the ones who will be willing to work longer hours, the ones engaging in productive relationships with their peers and managers, the ones that are motivated to do their best, and work towards achieving organizational goals.
Apart from routinely thanking employees for their efforts, there are a number of ways to nudge employees towards a culture of gratitude.
Here, we try to explore some of the methods that have been proven to be effective:
Building a culture of gratitude within the workplace definitely takes time and effort - but comes with its own rewards of increased employee performance and satisfaction. Organizations with an open culture that promotes employee input, routinely rewards and recognizes performance, and encourages personal growth are definitely headed towards building a culture of gratitude amongst employees.
“The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things.” – Ronald Reagan
Organizations often spend a huge sum of money on training leaders and developing leaders, often to see them fail in a short period of time. Leadership roles can be extremely challenging with constantly changing business environment and complex decision-making processes.
Sometimes, what cannot be achieved by development programs can be achieved by simple nudges. Instead of defining leadership competencies and behaviors, when nudges are used to influence their decisions, leaders are more likely to succeed.
Here are some important nudge strategies for leaders to adopt to build an engaged workforce:
These are only illustrative examples of some of the nudges that leaders can apply to improve engagement within the organization. There can be a number of other nudges that can be structured to push employees towards better health, reduced absenteeism, increased productivity, and engagement.
We see nudges everywhere, and you’re most likely already using them in your organization’s strategies. However, looking further into how nudging techniques can be customized to each cadre and personalized to influence the actions of each employee is what drives the best outcome. Want to know how to improve organisational culture by influencing employee behaviour using nudges? Talk to us now.