“Sometimes people are motivated to act because of internal desires and wishes, but at other times, behaviours are driven by a desire for external reward”- The incentive theory of motivation.
Over the years much has been written about behaviour driven reward and recognition. This is also often referred to as behavioural driven incentives. Hence it is now widely accepted that in the workplace and beyond, many people are driven by the desire for external validation and reward.
But to be clear from the outset, incentives, rewards, and recognition go beyond financial sums and bonuses. They can be gifts, perks, public or private thanks and social recognition. One of the most refereed to papers written on this subject was published by the university of Zurich called the Psychological Foundations of Incentives. This paper looks at the positive and negative impact of both financial and non-financial rewards in the workplace.
Based on this and other reports, many businesses around the world now have a strategic reward and recognition scheme in place to help further incentivise their staff. In addition, many of these companies tie in their reward and recognition schemes into the wider company values as they look to encourage a certain type of behaviour.
Reasons for behavioural driven incentives.
The world of business is made up of many different types of organisations, of different sizes, products, and services, B2B and B2C working across a wide range of markets. Each of these businesses is made up of different roles and expertise which are driven by different KPIs by which they are measured. For example, sales teams are measured purely on the number of sales they make, HR teams may be measured on the amount of money they save through recruitment and retention, and marketing teams by the number of leads they generate.
Understanding these different goals is a starting point for implementing the right incentives, and traditionally these teams can be rewarded for reaching and exceeding their targets. So, if you work hard and do your job well you will be rewarded – traditionally with a financial incentive.
However, what if the incentives were more varied than just financial reward. The Incentive Theory of Motivation mentioned above, talks about how people may act in different ways in the same situation based entirely on the types of incentives that are available to them at that time and what value they place on those incentives.
For example, some people are purely driven by money, and others by social recognition. Some my want more holiday time and others the ability to celebrate their hard work with their family and or colleagues. What we are seeing is more and more companies investing in understanding the behavioural drivers of their workforce and acting accordingly.
Influenced by customer loyalty schemes
Loyalty schemes are an old idea that in their simplest form enables retailers to reward customers for spending money with them and look to encourage them to spend more with exclusive offers and discounts.
However, with the ever-increasing influence of the Internet and the intense battle for customers, customers have come to expect more. But before we talk about that, we should understand the science and research that goes in to each loyalty programme.
Companies have spent significant amounts of time and money trying to better understand the behaviour of each of their customers. A new study led by Gregory Burns, researchers found that the human brain responds differently to rewards depending on if they are predictable or random. Companies then use this information and test each theory to get the best results.
An industry that has become expert at understanding customer behaviour is the gaming sector. Casino’s in the US are famous for incentivising their high roller clients by giving them free rooms, food and drink. Online casinos in the UK are often giving signup bonuses and free bets when you spend a certain amount on certain events.
Driving internal behaviours
Now businesses are starting to look at the behavioural incentives used to attract, retain, and encourage their customers to spend more and applying the same science to their staff. For each department in the business these desired behaviours may be different, and this also applies across the business landscape.
Traditionally sales teams are driven by their rewards. These usually come in the shape of commission. The more you sell the more you earn. But now companies are starting to reward their sales teams for their behaviour they demonstrate. A recent report from Mckinsey has matched the growth in sales to the behaviours that are encouraged through a range of incentives offered to sales teams.
But its not just sales teams. We are now starting to see the introduction of incentives, reward, and recognition platforms in other businesses such as fleet and haulage companies. Drivers are being incentivised to deliver and arrive on time, drive safely, and look after their vehicles with both financial, social, and retail perks. Drivers can earn points that can be exchanged for retail discounts, cinema tickets, gym memberships etc…
Other companies are using behavioural incentives to change and align company culture. Colt for example, has thousands of employees spread out over 22 different locations around the world. It wanted to increase its emphasis on teamwork and recognising good and positive behaviour in and around the workplace. It implemented a new global scheme to help drive this behaviour through incentives.
Behaviour driven reward and recognition using a range of financial and non-financial incentives is becoming increasingly common place across the business landscape. However, it is critical to ensure these schemes are tied into the strategic objectives of the business so that everyone is pulling in the right direction.
To learn more about how to engage employees through recognition download our free guide below.