Incentive compensation professionals work hard at developing incentive plans that drive employee motivation while also meeting their company’s strategic objectives. In the past, this has been achieved by using rules of thumb and stringent financial analysis.
Yet, hard work is not enough in today’s turbulent times.
Today, compensation professionals need to add a few more tools to their tool belt.
Specifically, they need to add a deeper understanding of behavioral science and communication strategy. A great incentive program can be a defining factor in an organization’s success but as the world evolves additional measures are needed to ensure that it is resonating with and being understood by the field. Adding behavioral science into the mix can significantly improve your program’s impact and the performance of your teams. Tie these principles together with award-winning communication and you have a home run.
In a continued effort to make behavioral science and behavioral economics more accessible, The Lantern Group and The Behavioral Grooves Podcast are building resources to help you make more informed decisions, understand your influences (and how you influence), understand biases, improve happiness, build better habits and more. This includes a self assessment to help decide which behavioral science or behavioral economics book to read and The 100 Behaviors Project – a weekly exploration of human biases and behaviors. Check them both out below.
Behavioral Learning Self-Assessment
The self-assessment below combines 30+ years of collective experience in behavioral science to help you determine which of our top 40 books will be the most beneficial to you. Take it now and start (or continue) learning! If you have already read the recommendation, reach out in the form below or email email@example.com with your result and we will recommend 2 or 3 alternates!
No, this isn’t one of those government studies where you wonder how it ever got approved (i.e., how long can shrimp run on a treadmill or does playing FarmVille on Facebook help people to make friends and keep them?*).
Socks and behavioral science. The two do not seem to fit together, yet I consistently use my socks as a personal behavioral modification tool.
Back in September, I partnered with Tim Houlihan to start “a monthly gathering of curious minds” which we called Behavioral Grooves. We thought it would be interesting to get like-minded people together to talk about applying behavioral science to life and work.
We had no idea if others would be interested in this…
We announced the meetup and were hoping to get at least a few of the friends that we had contacted to show up. We ended up with 24 people for that first session where we talked about habits – how they are formed and what people can do to improve them.
We were thrilled!
From there, it took off. We have over 180 members signed up to our meetup group and it is growing fast. We have had three monthly sessions as of early January 2018 and our fourth is lined up for two weeks from today. We have over 20 people who have made it to two or more of the sessions.
I guess we struck a nerve.
For our second session, we invited Professor James Heyman to speak and thought, hey, since he’s here, why don’t we interview him and make a podcast out of it. Thus, our Behavioral Grooves podcast was born. Tim and I both loved that so much that we decided that we didn’t want to wait for the next Behavioral Grooves session to record our next one – so we started to invite people and interview them – both live and over the internet.
To date, we have seven interviews recorded and three more in the works. These podcasts mirror the Behavioral Grooves sessions in that they are conversational in nature where we geek out over behavioral science and how we can apply behavioral science insights into our daily work and lives.
They have been a blast!
In reflecting on this, it appears to me that these two outlets provide us with a way of both learning and sharing. We want to be advocates for good, ethical use of behavioral science. We believe that there is much to learn and we can improve our work and lives by understanding and by applying these principles in a thoughtful and deliberate manner.
We also realized that we love the community that this is creating. A community of curious minds who are interested in science and the application of that science. A community of people that we can bounce ideas off of. A community of people that can push us to think about things from new perspectives.
This is ultimately what we have been building and hope that it grows and provides a place and outlet for others, as well as ourselves.
If you are ever in Minneapolis on the third Thursday of the month – please come and join us at our meetup (find out more info here) and if you can’t make that, please listen in to our podcasts (click here to find the latest).
This is not a warm fuzzy blog telling you how easy it is to change, its a honest look at the challenges we face and how we can work to overcome them. It is important to look at the world empirically and without rose colored glasses. We need to understand the reality that we face when we are trying to change or achieve a goal if we want to be succesful. Don’t worry though, it ends on a postivie note.
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.
In 1925, four climbers, led by Phil Smith, ventured north from Colorado to Jackson Hole, Wyoming to attempt to climb “The Grand Teton” mountain in the Teton Range.* The Grand had been summited before, but these four climbers were coming at it from a different route, one that had not yet been explored. From the valley floor of Jackson Hole it looked like they would have a relatively straight ascent to the peak.
The four climbers set out with high expectations of being the first to chart this new route. As they progressed up the mountain, it looked like they were getting closer and closer to the summit. One can imagine their feeling that this goal was within easy reach. That is until they came up to the top of what they thought was a ridge. To their dismay, instead of it being another ridge, it was the peak of an entirely different mountain. The Grand was almost a mile away with a sheer 450-foot drop to the saddle between the peaks. The four, not wanting to give up, attempted to rappel down the face of the cliff. They realized that it was too hard and too dangerous, so they gave up and headed back to Jackson Hole.
Before they left, they named this new summit point, Disappointment Peak.
It is not only climbers who run into disappointment peaks. We often fall victim to this same dismay when we realize that the goal that we had set out to achieve is harder, will take longer, requires more resources or effort than we first envisioned.
Often, we too give up.
The four mountaineers had fallen victim to an optical illusion of the Grand. When standing in the Jackson Hole valley if you look directly at the mountain, it seems as if Disappointment Peak is just part of the Grand. The two peaks appear to be one and the same (see image).
One of the elements of successful change is being able to anticipate how you are going to achieve that change. We like to plot out the steps that we need to make in order to reach our goal.
The problem comes in when we encounter our own mental illusions – when we think that the goal is much closer or easier than it really is.
One thing that both psychology and behavioral economics have shown us is that as humans, we are really good at self-deception. We have a number of innate biases that affect our belief formation and influence our thinking – from confirmation biases, base rate fallacies, availability heuristics, gambler’s fallacies, control illusion, and my favorite, the Dunning-Kruger effect (The tendency for unskilled individuals to overestimate their own ability).
Generally, we are overconfident in our abilities and underappreciate the difficulty that is required to achieve change.
These mental illusions set us up.
When our expectations of what this goal is going to cost us in terms of time, effort, energy, and resources does not match with reality and when we realize the summit is much further away than we thought – we become disappointed as well.
We are doing great on our diet and losing weight weekly until we hit that plateau and can’t seem to lose those last 15 pounds.
The first three chapters of the book flowed smoothly, but we now are encountering writers block and can’t even complete the first paragraph of the fourth chapter.
We stopped smoking for five weeks until that project at work stressed us out and we needed something to calm our nerves.
We had achieved our goal of making ten cold calls a day for the two weeks but felt dejected that we had not had one sale from those encounters.
Moreover, just like Phil Smith and his companions, we can see the peak in the distance, but can’t seem to rappel down that cliff that is between us and the summit.
Three things to do when you reach your disappointment peak
We cannot always find a way to keep trekking on and reach our goals, but here are a few things to try:
Step back and look for new routes.
Over the years we have conducted a team building event called the electronic maze (see 5 lessons from the maze). Envision a giant chess board comprised of 54 squares, where some squares beep and others do not, and teams are trying to get from one side to the other stepping only on non-beeping squares.
At one point in their journey through the maze, people tend to get stuck and keep running into beeping squares as they move forward to the other side. The path goes backward here – but EVERY TEAM we have ever worked with has repeatedly stepped on one or more of the “beeping” squares that are in front of them. Even after repeated failed attempts stepping on the same beeping squares over and over, they cannot fathom that if they just take a step backward, they will ultimately move forward.
Sometimes we just need to look around and see if there is a different path to our goal.
Find new tools/knowledge.
Do you have the right equipment to overcome your obstacles? Phil and his team attempted to rappel down the cliff and felt it too dangerous. Today, many climbers specifically go to climb and rappel down that very cliff. The equipment and knowledge that people have today are much better than what they had 90 years ago. Are there new or different tools that you could use to overcome your road block? Would additional knowledge help you in continuing your journey?
Push on through.
Sometimes we just have to grit our teeth and power on through. As Dory says, “Just keep swimming. Just keep swimming.” There are many times when we reach a point of dismay and our mental energy and enthusiasm collapse because it is going to be longer or harder than we thought.
If the goal is important, then sometimes the best solution is to continue to trudge on. We can think of this as applying Newton’s first law of motion, “An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.” (NASA.com) Our movement towards the goal has stopped, so we need to apply an unbalanced force upon it to get it moving again.
Plan ahead for obstacles.
Just because our mental illusions often trick us, does not mean that we will always be fooled by them. Before beginning our journey, we can carefully map out the process and try to visualize what potential roadblocks we could encounter. That process helps prepare us for when we do run into an issue. In other words, we have primed ourselves and our expectations so that dismay will not fully knock us off our course. Specifically, we should be asking ourselves:
What might happen that could derail the journey
What are external forces that could impact this process
What are internal forces that could affect this process
If we run into one of these obstacles, how will we approach it (“If ________ happens, then we will do __________.”)
We should also tap into our social networks and see if other people we know gone through this process or attempted this change. These people can be our mentors and help work through with us some of the unforeseen obstacles that we had not thought about. Their experience and knowledge can not only help identify potential barriers and how to overcome them but also might point us on a route that avoids those obstacles altogether.
Reexamine your goal.
Lastly, reexamine your goal. Is it worth the effort, time and trouble that it will now take you to achieve? If it is, keep going for it. But don’t just blindly go on just because you started. Climbers too often focus on reaching the summit at peril to their own lives. Ed Viesturs, renowned mountaineer and bestselling author who’s summited Everest seven times says, “I’ve always had this motto that climbing has to be a round trip. I’ve always understood that getting off the mountain was more important than getting to the top…It’s OK. It’s not a failure…If you’re rushing, if you’re thinking it has to happen today, then you’re going to make bad decisions.” (Time.com) Sometimes it is ok to stop and say, not today. I’ll try this some other time when conditions are better, or I’m in a better spot.
*A common mistake is for people to call the Teton Range “The Grand Tetons.” The Grand Teton is a single mountain while the mountain range’s proper name is “the Tetons” or “the Teton range.”
**Thanks to Michael Anschel for introducing me to the story of Disappointment Peak.
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.
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!
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
# of people achieving level
% of people achieving level
Average time to reach level
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.
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.
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.
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