Behavior Matters!

Harnessing the power of behavioral science to improve how organizations, leaders, and people work

Category: Incentive Compensation (Page 1 of 5)

Cognitive Load – What it is and why it’s important

Back in January we introduced you to the concept of integrating Behavioral Science into Graphic Design. If you did not have a chance to read, or for a recap, click here: http://blog.lanterngroup.com/behavioral-science-graphic-design

Today we will expand a bit more on the idea of “cognitive load”.
Not only is cognitive load a valuable resource to utilize in graphic design; but it is also extremely valuable in communications, speaking engagements, presentation’s and an all-around useful tool for improving understanding.

Let’s take a quick look back at what cognitive load is:
Cognitive load refers to the total amount of mental effort being used in working memory. Rationally, we would think that the more information that a person is given, the better informed they would be; therefore, they would make more sound decisions. However, this is not typically the case.

  • Too much info and the brain can become overloaded and confused.
  • Break it down to the essentials and things just might stick!

In short, quite often: Less is More.

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Behavioral Science & Graphic Design

By pure definition graphic design and behavioral science may seem like two very different areas of study with very little connection to each other.

  • Graphic design is defined as: The art and profession of visual communication that combines images, words, and ideas to convey information to an audience to produce a specific effect.
  • Behavioral science is defined as: The branches of science (such as psychology, sociology, economics or anthropology) that deals primarily with human action and often seeks to generalize human behavior in society.

However, by utilizing behavioral science principles when practicing graphic design, the result is a more cohesive, higher quality design.

Your design not only looks good, but can increase the impact of the message you are presenting and drive the behaviors of the audience. In fact, many marketing firms and advertising agencies are already utilizing these concepts in their designs to increase the effectiveness of everything from how you shop to what you buy, how you perceive a product or idea and much more. These trailblazing concepts are shaping the world around you and by utilizing them in your own designs you can drive the level of impact you are having when you communicate to the next level.

Here are two ways YOU can start using behavioral science RIGHT NOW to optimize the impact of your designs and join the growing list of professionals who are moving toward the new standard in design.


Reduce Cognitive Load

Let’s talk about cognitive load, the power of simplicity and how it can increase understanding.

Cognitive load refers to the total amount of mental effort being used in  working memory. Rationally, we would think that the more information that a person is given, the better informed they would be; therefore they would make more sound decisions. However, this is not typically the case.

People can become overloaded with information and it doesn’t always provide optimal outcomes.

For instance, if we are trying to present the high-level concept of the 4-Drive Model of Employee Motivation, let’s take a look at these two images:

cognitive-load-1cognitive-load-2

How long did it take you to understand the concept being presented in the first image? How about the second?

The simplicity of the second allows the brain to focus immediately on what’s important.

The first image is hectic, unorganized and does not allow you to focus in on the key concepts being presented. It is important to design so that you present the most important concepts and key takeaways in an easy to understand manner that does not get lost in the ‘fluff’.

In many cases, less really is more when it comes to making sure your audience interprets the message you are trying to convey.

Think of a billboard – you are cruising by at 65 mph (well probably 80 but I’m not supposed to be promoting speeding over here, let’s focus on design and the human brain)… you are cruising by at 65 mph, you glance up to see something that catches your eye but you have very little time to interpret the message.

With this in mind, the designer needs to ensure that the most important and key message jumps out and stays with you. Ask yourself when creating your design, what do I want my audience to understand IMMEDIATELY? Design around that intent and allow the rest of the design to compliment it without taking away from the main point.

So how can you reduce cognitive load in your designs and maximize the impact of the content and messaging? Remember:

key-callouts

Simplify and reduce.
Do you absolutely need to convey that information at this time?

White space is good
Fill the page with too much information and the brain can become overloaded.

callouts

Visuals.png

 

Visually represent your ideas.
Visually representing information in an info-graphic or diagram can significantly reduce cognitive load.

 


Build Consistency and a Strong Identity with The Power of Branding

Creating a consistent brand, look & feel and color pallet within your design helps the audience link to understanding. If your design is part of a larger project, communication or campaign, utilizing a brand throughout the individual pieces creates a mental stamp for the audience to connect the pieces within that campaign.

At the Lantern Group, we have done a significant amount of work in the area of incentive compensation communications. With every client and project that we work on we start with one thing: establishing a brand and a look and feel for the campaign that we will utilize throughout every part of the project.

What we are achieving by doing this is establishing the expectation with our audience that when they see that brand their brain automatically connects it to the content and concept.

branding-and-understanding

Additionally, this can drive increased understanding – seeing that brand can help the user (often subconsciously) trigger what they have already learned in previous communications. These cues and reminders help provide a more immediate understanding of what the content will be and can lay out much of the legwork to capture the audience for you.

Let’s go back to the highway – you are cruising along at 65 mph (I’m willing to bet you think this is a wisecrack about speeding before you even read it, why? Because it feels the same as the previous comment)…

Anyways, you see a large yellow “M” – the golden arches. There is a good chance you already know what the golden arches represent without even needing to see the name of the establishment. The brand is so ingrained in your mind that the link to what you are seeing and what it represents become automatic (a strong established brand).

This same concept can be applied to communications and graphic design!

Now let’s go even further, there is also a good chance that you can remember what that restaurant will look like, what is on the menu, how the ordering process works,  etc. The cue has been planted with the yellow “M” and your brain connects the pieces.

Now incentive communications may not be as exciting as a Big Mac, a milkshake, and some fries BUT we can create that same visual cue through a strong brand and increase the power of the information we are presenting.  We are allowing our incentive brand to initiate the understanding amongst our audience every time we send out a communication.

You too can have that same impact on your audience when communicating the information you need to get across, the advertisement you are creating, or the logo you are designing by establishing a strong brand.

We hope this has helped you begin to understand the benefits of applying behavioral science to your designs. Next time you begin a design start by establishing a strong brand and evaluating exactly what NEEDS to be portrayed to reduce cognitive load so you can redefine yourself as a behavioral graphic designer.

  • Behavioral graphic design is defined as: The profession of visual communication that applies scientific principles dealing primarily with human behavior to the art of combining images, words, and ideas to convey information to an audience and drive human behavior.

This has been just the tip of the iceberg, there are many more ways in which we can apply behavioral science to graphic design to optimize the impact is has. If you want more information on how those ideas are being used by the leading companies in the world, join us – click the links below to follow!

 

 

Don’t Be A Communications Relic – Using behavioral science to make communications more effective

Communication Relic - LGWant to make communications more effective – use behavioral science

Over the past few years, we have seen a shift in how organizations value their internal communications.  In the past, employee focused communications were often an afterthought.  Companies would spend significant time, effort and money on developing out their incentive plans, making sure they were designed to drive the right behaviors and performance, only to communicate it to the field in an e-mail with a 30-page, single-spaced legal contract attached.

Thankfully, this is starting to change.

Today, organizations realize that they need to invest time and resources into their internal communications to optimize their value and impact.  As companies make this investment we are seeing a significant improvement in the design and visual appeal of internal communications – from incentive compensation to benefits to operations; the production value of employee communications has risen.

However, merely making a communication look pretty and appealing isn’t sufficient in today’s hyper-competitive world.  Organizations need their communications not just to inform, but also to spur new behavior and actions.

When companies communicate about programs that require employee action, they often only see a small change in employee behaviors (or no change at all) – even when these actions have clear benefits for the employee (i.e., increasing their contribution to their 401K plan, using a flexible health care spending account, or changing their selling behavior to align with the new incentive plan to maximize their own earnings).

This is where behavioral science comes in.

Behavioral sciences such as psychology, sociology, and behavioral economics help improve organizational communication and drive both action and behavior change.  These cutting edge scientific concepts are currently being used heavily in consumer marketing with positive results – and now they are being implemented by many companies as part of their internal employee communications to achieve similar results inside the company.

Read further to make sure that you’re not being left behind. 

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A bike, some lights and motivation: what a stationary bike hooked up to an LED panel of lights can teach us about motivation!

Kurt Nelson, PhD and Ben Granlund

IMG_4449

As part of our exhibit booth at the World at Work 2016 Total Rewards Conference, we designed a method for giving away our promotional t-shirts that simultaneously acted as an experiment to help us understand what motivates people.

What we found out was intriguing and reinforces some key behavioral insights about intrinsic and extrinsic motivation, recognizing accomplishments and having specific goals.

Our process involved a stationary bike that was hooked up to a bank of LED lights1 – the faster and longer you peddled, the more lights lit up, sounds basic enough right?

The six LED light panels set up on a vertical pole that lit up from the bottom to the top – once all six lights were lit up, all the lights flashed and the process was over.

We set our process up a little differently

To earn a very cool “Behavior Matters” t-shirt, all people needed to do was get on the bike and light up one of the lights.

We did not require that people light all six lights, and we did not assign a time length for peddling to earn a t-shirt.  All they had to do was light up one light – a relatively easy process.IMG_4473

Additionally, people could get their name written on our leader board if they were one of the five fastest people to light up all the lights.  This white board with hand written names on it was updated whenever someone earned one of the top five spots.

Our original concept was to have people read one of two sets of written rules – one positive and encouraging; the other bland and discouraging.  The intent was to see if the different messages impacted how people performed or felt about the activity.  We quickly realized that our original plans were not working – too many people wanted to ride the bike and the process ended up being us telling participants the rules instead of them reading them thus invalidating the initial study.

Luckily for us, this is where things got interesting!

Results

While the original communication experiment didn’t pan out, we were still able to gather very interesting findings.  Specifically we were intrigued by some of the insights we gained into extrinsic and intrinsic motivation, the power of leader boards, and the impact that specific goals have on performance.  First, let’s look at the overall results:

A total of 103 people rode the bike over the two days the exhibit hall was open (some participants rode multiple times).  Their performance is shown in table below.

Highest number of lights lit up 1 2 3 4 5 6
# of people achieving level 1 0 6 14 34 48
% of people achieving level 0.9% 0.0% 5.8% 13.6% 33.0% 46.6%
Average time to reach level
(in seconds)
15 0 68.7 46.1 32.5 20.6

The average ride time was 31.7 seconds – with the fastest time being 4.8 seconds and the longest time being 80 seconds.   There is some obvious differences based on physical fitness here as shown by the inverse time required to reach the different levels of lights (i.e., more time on average to reach 3 lights than 4 lights, etc.) which played out in how well people did.

Insights

Do you just want a shirt or are you looking for something more? 

We needed to have an incentive to get most people on the bike.  True, there were some who just wanted to get on the bike and see how many lights they could get, but the vast majority of the people got on the bike to earn the t-shirt.  In other words, they needed an extrinsic reward to participate.

But that’s not the interesting part…

The interesting part was that only one person stopped at the first light (1 out of 103, that’s less than 1%)!  Once they were on, the majority of participants moved past the threshold for earning a t-shirt and continued peddling to see what they could do.  This was not easy – we had the settings on the bike be rather hard. This meant that peddling for more than 15 seconds was difficult for most non-athletes.

We believe once they started the activity, they intrinsic motivation of the bike  kicked in.  The lights tracked their progress immediately and they could directly see how they were doing against the goal.  They wanted to see what they could accomplish.  They no longer worried about the t-shirt – but instead, focused on the event.

 In other words, they challenged themselves to see how many lights could they light up?

They had already committed to participate in order to acquire a t-shirt (the reward) – now they were pushing beyond what was required for the shirt because of the challenge that they were presented with.  If we think about the 4-Drive Model of Employee Motivation (for more info see here, here, here) we see that the Acquire component was instrumental in the motivation to initiate the event, but the ongoing motivation was propelled by the intrinsic drive to Challenge oneself and see how they could do.

Application:

The idea of using an extrinsic motivator to entice people to participate in programs or activities that they are not excited about and then allowing their natural Challenge drive take-over should not be undervalued.  Additionally, the more that a program uses a measure of goal progression, highlighting an individual’s progress, the more a participants Challenge drive is activated.  In other words, the design of your extrinsic incentive program can impact the intrinsic motivation that is activated. Finding cohesion between these extrinsic and intrinsic motivators can certainly help drive the right behaviors.

What’s up with the leader board?

We had a leader board where riders got their name featured if they were one of the five fastest people to light up all six lights.  They did not earn any additional extrinsic reward for being on the leader board – no fancy give-away, no grand prize, not even an extra t-shirt.

So did it make a difference?

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Our new commercial

[wpvideo H7jjFngD]

Whose job is it to motivate?

I had a client send me an e-mail the other day – with this question – “Whose job is it to motivate?”  Here is the response that I sent her…

“Whose job is it to motivate?

This was an interesting question – one that, at first glance, seemed like it could be quickly answered if I did not spend too much time thinking about it.   So I spent some time thinking on it…and like the proverbial onion, it has many layers.

A quick response would be that it is the manager’s job to motivate.   They are in charge of their team of people and one of the responsibilities that they have is to make sure that their team is doing their job.  You get people to do their job by motivating them.  As a manager, you are likely to be in control of many of the motivational levers that organizations typically use, such as performance ratings, incentive components, special role assignments, recognition and a host of other tools that are designed to help motivate employees.  As a manager, you are often the closest link to the organization that employees have – as such, you are key to ensuring that they know the strategy and vision for the company.

So the job of motivating is the managers….

Except that when you peel away another layer, and ask the question, “can a manager really motivate his or her employees?”  This comes down to a theoretical question about our ability or lack of ability to really motivate another person?  Sure, you can motivate through fear and intimidation, but those are not typically the types of motivational forces that we think of when we think of a manager (outside of the threat of firing).   The question is revolves around the idea of having someone else motivate me or do I need to motivate myself.  You can put all of the rewards and accolades in front of me, but if I choose not to be motivated by that, then is there anything that you can do to motivate me?

Think about this in another way as a hypothetical question – what would motivate you to bring great physical harm to another person?  Would any amount of money sway you to do that?  Would any type of promotion or praise get you to do this?  Probably not.  You would have to have an intrinsic motivation to be able to do this (if even that would suffice for many people).

If we go down this path, then motivation is self-derived and is ultimately the job of the employee…

However, you peel away another layer and look at the role that our environment plays in our behavior and attitudes.  For instance, we know that people eat more when their plate is larger – even if they are not motivated to do so, or more ominously, motivated to not eat more (i.e., on a diet).   It has been shown that the work environment that we are in can have a significant impact on our attitudes and ultimately our performance.  We know that people’s behavior is changed when they are presented with an incentive or reward for doing something.   Studies, as well as our own experience, show that we will work longer, harder and more tenaciously if we know that there will be a luxurious reward as the result of our effort.  This points to the fact that a company’s leadership and the culture, environment, systems and processes that they develop are key to motivation.

Taking that line of thought, it is leadership’s job to motivate…

Except they do not often have an immediate presence or interaction with the employees.  That is relegated to the manager and how those systems, environments and culture are interpreted often relies on their actual practice of them…so we are back to the manager…and to the individual…

Ultimately, it comes down to a combination of all three.  That the job of motivating is everyone’s job.  

This is not a simple matter to say that “motivation” falls within someone’s job description…it is indeed a larger issue that has its roots in so much of what everyone in the company does every day.  We know that employees are complex individuals.  That each of us is driven by different needs and different goals.  The Four Drive Model helps us put those drives into categories, but those drives are still hugely complex in their nature, and that it takes a large amount of effort by the company, managers and individuals to really motivate us to our fullest potential.

Ok – hope I didn’t get too long winded or philosophical and that this was insightful to you…

Let me know if you have further questions.

Thanks.

Kurt Nelson, PhD.”

 

How the internet took me to Malaysia

So on Friday night, around 7:00 PM, I will board a plane and fly for over 20 hours to Kuala Lumpur, Malaysia to conduct a workshop on Sales Incentive Management for a group of various executives from around southern Asia whom I’ve never met and the only interaction I’ve had with the organizers is via e-mail.

kuala_lumpur_malaysia-normal

Kaula Lumpur

And no…I did not wire them any money in advance.  In fact, they wired me money.

The saga began back in December 19th when I was busy with a number of other programs.  Going through my e-mail quickly, there was one that almost got put in the trash immediately “Trainer invite for Sale Compensation Management.”  It started out, “Dear Mr. Nelson, Good day to you.  We are pleased to formally invite you, on behalf of UNI Strategic, to be the trainer four our 2 day training on Sales Compensation Management…”   It went on to talk about what they wanted and how they “specialize in the provision of business-to-business intelligence.”  It was signed by Ramesh, Conference Producer.

Yeah – I thought it was spam as well.

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Behavioral Based Incentives: Do’s and Don’ts

Behavioral based incentives (incentives that recognize behaviors and actions instead of results) can be very powerful motivators inside of a company’s overall reward framework.  In many instances, behavioral based incentives are the only way that an organization can recognize employees for work that is vital to their success.  This includes times when outcomes cannot be effectively measured, where outcomes are not immediately contingent on individual contributions, and where there may be ethical or legal components that prohibit outcome based rewards.   Research also suggests that behavior based incentives can be advantageous to the organization in a number of ways including but not limited to: the ability to reward long-term behaviors that will not have a short-term payoff, improve fairness of recognition due to inequities in the market place, provide more focus on soft-skills necessary to long-term success, and help drive non-sales activities that are desirable by the organization (Anderson & Oliver, 1987 & 1994; Baker, Jensen and Murphy, 2012).

While behavior based incentives can be very powerful motivators, they also can have a negative impact on overall moral and motivation if not properly implemented.  There are a number of potential pitfalls with how

Some Potential Roadblocks:

Ambiguous measurement / Perception of fairness: Behavior based rewards often have ambiguous qualitative rating processes which can result in different interpretations of the same behavior or action.   In other words, one person might feel that they are exhibiting exactly the right behaviors while another would view those same behaviors as poor or unsatisfactory.  This dual interpretation can lead to individuals feeling as if they are being unfairly measured.  Research by Meyer has shown that 58 percent of employees rated their own performance as being in the top 10 percent of their peers and that 81 percent rated themselves in the top 20 percent while less than 2% of the people rated themselves below the median.

Lack of Trust: Individuals often state a lack of trust in both the organization and in their manager to effectively be able to assess their performance.  Often this is related to the perception of fairness listed above, but many times this is also the result of lack of understanding on the incentive process.

Short time horizon vs long term impact: Behavior based incentives are powerful motivators, in part, because individuals can be rewarded shortly after they exhibit the desired behavior, thus reinforcing that behavior.  This short-term focus however, does not always correlate to long-term success.  Thus behaviors often revert back to the status quo once the incentive is removed.

Gaming the system: as in any incentive scheme, behavior based incentives can be gamed.  Participants might act differently when they know they are being observed by their manager or otherwise try to create a false impression of their behaviors.

Some Best Practices:

Specificity: There needs to be a very clear definition of what is being measured and how it is being rated.  This specificity needs to be clearly understood by both the participant and the manager.  While this does not imply that there cannot be qualitative judgments made about an individual’s behavior, it does mean that the manner in which those judgments are determined needs to be transparent and agreed to in advance.  This requires significant investment prior to implementation to fully identify, define, communicate, train, and create tools to ensure full understanding.

Leaders should ensure that they have fully invested in the measurement process and communication of the behavior measures.  This includes:

  • Clear definitions around behavior expectations
  • Behavior examples that are used as illustrations for expected behaviors
  • Training campaign for managers on both “how to” measure as well as “how to” communicate their rating (provide feedback)
  • Communication campaign that clearly and succinctly highlights expectations and outcomes

If there are quantifiable elements (that are relevant and valid) that can be included as part of the overall measurement process, these should be included – even if they are used as back-up or reference components and not directly tied to the payout.

Measurement process calibrated across managers:  Key to success is the consistent rating of individuals across managers.  Top organizations ensure that there is training on how to measure, but also do periodic check-ins to ensure that the measurement process is calibrated (i.e., that managers are giving similar ratings for similar behaviors).  Note, this is not a calibration of ratings at the end of a quarter or period, but a review of processes and feedback for the managers for how they can be consistent to the norm.

Milestone check-ins with long-term bonuses:  Behavioral economics shows that individuals place higher value on relatively smaller rewards that are achieved in near term over larger rewards that require longer time horizons.  Motivational research shows that near term rewards can drive quick uptake on behaviors, but does not correlate to long term behavioral change.  However, incentives with longer time horizons have been shown to drive more long term behavior adoption.   Combining these factors, best companies have used a process whereby they have a long-term bonus kicker with short-term milestone check-ins.  Often, short-term check-ins are done as on-the-spot rewards given by managers from specific discretionary budgets for this purpose.

Improving performance in uncertain times using non-cash incentives

Change creates an emotional response

Even in the best of times, companies experience different competitive and environmental factors that can lead to organizational change and thus employee uncertainty. In hard economic times, those changes occur at a much greater pace and employee uncertainty can be even greater.   Employee uncertainty creates a number of challenges for organizations as employees often feel anxious, disillusionment, disappointment, confusion, and even anger over their lack of control in an unknown situation.  This often leads to decreased employee motivation, focus and subsequent decreases in productivity and performance.

Companies can employ a number of different mechanisms to help recharge employee motivation in changing environments.  One key mechanism is the use of targeted incentives to help engage employees and focus them on improving productivity.  Because incentives can be structured in a number of different ways and use a variety of reward options, it is important to understand what aspects of incentives will drive the greatest return given the uncertainty and emotional response that is felt by employees during these organizational shifts.

Understanding the psychological response:

The emotional response of individuals to potential negative changes is theorized to go through a process similar to grief.  The Kubler-Ross Reaction to Change[i] cycle shows how employees typically flow through recognized stages when faced with change.

Kubler Ross Change

Initial denial is followed by resistance, then a period of self-doubt and worry, followed by a time of letting go, with acceptance of the change and exploration of options, and finally moving to new commitment and focus.  This is an emotionally charged process that requires time to respond to change.

Organizations need to be able to manage this process and move people through these stages as quickly as possible.  The engagement of the emotional elements of the brain is vital to being able to achieve this. During the high stress, denial and resistance stages, our brains do not process rational arguments as easily or readily as they usually do.  In order to gain a foothold in this emotional cauldron, incentives need to have an emotional hook.  Non-cash incentives achieve this hook through a variety of behavioral economic principles.  First, they provide hedonic luxury escape which is about being able to remove yourself from the current state and imagine yourself with a luxury item or good[ii].  Second, they activate different sectors of the brain associated with visualization (i.e., right hemisphere brain functions) versus the more rational sectors associated with transactions (i.e., money and left hemisphere brain functions)[iii].  Third, non-cash elements do not push employees into a calculative modality in which they equate effort with monetary amounts.  In stressful situations, this calculation is short-changed and often interpreted as “they are trying to bribe me.”  Non-cash awards are evaluated as a separate, non-financial component that is viewed in isolation and not in factors that are associated with other compensation factors.[iv]

Examples:

Many organizations have utilized non-cash incentives in periods of uncertainty and change.  The following are just a few examples of these incentives and the results that they generated.

Y2K Angst

A technology firm out of Des Moines, Iowa was experiencing high levels of turnover and angst with its software programmers because of the uncertainty surrounding Y2K and how their jobs were going to be negatively impacted.   A non-cash incentive program aimed at achieving specific Y2K milestones was implemented across the organization.  AwardperQs (a non-cash point system) were awarded to individuals and teams that achieved specific milestones.   This program provided clear focus and motivation for the software programmers and achieved in excess of 90% of employees engaged/ participating/hitting one or more milestones.

Sales Force Integration

A leading medical technology company was moving from a product-centered sales philosophy to a customer-centric team approach.  This involved a realignment and adjustment to the sales force that created significant uncertainty in the field about their jobs and roles.  A six-month incentive program was developed that rewarded people for sales that required integration of two or more product groups.  A fixed award pool created a sense of urgency and engagement in the incentive.  The client realized a return of more than 300:1 on this program.

Realignment

A pharmaceutical firm was going through a major realignment of territories and product allocation due to a large product soon to come off of patent.  Many sales representatives had new managers, new doctors and new products that they needed to work with.  A short-term team based award was put in place that offered teams the chance to earn from selected merchandise if they were in the top 20% of districts across the nation.  Quota achievement across the division came in above the stretch goal, even with the distraction of realignment.

Other Factors

Obviously there are other factors that influence how quickly organizations move their employees through angst to engagement in situations that are stressful or uncertain.  While this paper does not expand upon those, two key factors that relate to incentives include:

  • Incentives should be short-term to allow for readily available goal progress particularly when dealing with uncertainty.  By providing short-term incentives and tracking to that, individuals will achieve a sense of progression towards goal which increases the perception of certainty in the program.
  • Communication is key.  Incentives cannot be viewed of as a bribe or they will be summarily dismissed.  The tone and narrative of the communication needs to be set up to have the most positive impact and create a separate interaction with the incentives that sets it as different from the cause of the uncertainty.

 


[i] Kübler-Ross, E. (2005) On Grief and Grieving: Finding the Meaning of Grief Through the Five Stages of Loss, Simon & Schuster Ltd.

[ii] Kivetz, R. (2010) Rewards Hierarchy and Hedonic Luxury, presentation at BIW Forum

[iii] Jeffrey, S., (2006) Cash or Hawaii: The benefits of tangible non-monetary incentives, dissertation

[iv] Jeffrey, S., (2008) The benefits of tangible non-monetary incentives, Incentive Research Foundation

How We Are Developing a Reward and Recognition System using the 4-Drive Model

I’m consulting with a 12 Billion dollar sales division of a Fortune 500 company regarding the future of their reward and recognition system.  Without going into much detail, they are trying to take a strategic approach to how they can improve the effectiveness of their reward programs.  As part of this process, we are using the 4-Drive Theory as a model to help guide how we build this system.

As one can imagine, the organization’s current reward and recognition programs rely heavily on the Drive to Acquire & Achieve.  By far, this was the predominant focus for over 90% of the components.  Additionally, our research showed that the current system has a number of legacy programs and other recognition items that are no longer strategically aligned with the organizational mission.

There are a number of ways that a reward system can be developed.  We aligned on developing a system that would tap into all four of the drives and focus on motivating actions on three specific sales behaviors.  With this in mind, we wanted to create a framework that would leverage various reward and recognition components.  That framework is shown below:

Reward and Recognition components

Within each of these four components could be a number of different programs that would be focused on driving one or more of the desired behaviors.  We also identified that while any of the components could activate any of the four motivational drives, that particular drives would be more readily activated by programs within specific components.  We’ve mapped this below:

R&R and the 4-Drives

So while both the incentive compensation and the non-cash components easily activated the drives to acquire and challenge, group trips and other recognition were more likely to tap into the drives to bond and defend.   This provided us with a framework to think about how we could leverage all four drives with various reward and recognition programs.

While this is a high level perspective, it does provide a company with way to think strategically about their reward and recognition system that aligns it with the 4-Drive Model.  We were able to map out specific programs within this framework that provided both a means for effectively driving behavior as well as leveraging all four drives.

To our knowledge, this framework has not been used previously within a large company.  We are very excited about how this is being applied and the impact that it will have.
Please let us know if you have any questions or thoughts by leaving a comment below.   Thanks.

 

 

 

 

 

 

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