In part 1 of this blog series, we explained the importance of employee recognition programs, discussed how the virtual work environment has impacted many of these programs, and highlighted the benefits of applying behavioral science to the redesign of these virtual programs. Now, in part 2 of the series, we will walk through some examples of how behavioral science can be applied to employee recognition program design to help improve employee performance.
Intrinsic and Extrinsic Rewards
Intrinsic rewards are intangible and reflect an individual’s values. An example of an intrinsic reward is the feeling of accomplishment you feel when completing a challenging work task or goal. Extrinsic rewards are external to the work itself and often have a social or financial value. An example of an extrinsic reward is a gift card prize for winning a work competition2. When designing your virtual employee recognition program, it’s important to use a variety of recognition efforts aimed at increasing both types of rewards.
For extrinsic rewards, start by identifying the sort of rewards that are effective when employees are not collocated and apply the following to optimize reward effectiveness1:
- Make recognition immediate and specific: Use frequent check-ins and digital project management tools to regularly keep track of employee performance. The sooner you can provide specific recognition on a particular task, the better the recognition effect.
- Make recognition personal: It should be clear to the receiver that the reward was developed for them. If sending an e-card, take the time to personalize the message. If mailing a physical note, take the time to handwrite and sign the note.
- Make recognition valuable: Rewards should be valued by the employees receiving them. Sending a gift card is a great way to reward a remote employee. To increase the effect, ask the employee what service or product they’d like to receive and provide that.
- Make recognition unique: Giving a “gold star” or compliment via email doesn’t have the same effect when employees aren’t in the same room together. Think of ways to create unique forms of recognition that apply to your workplace. Examples could be bestowing employees with a custom “gold star” Zoom/Teams background to display during meetings, or sending company branded/themed apparel or accessories.
Since intrinsic rewards are generated within the employee, they can’t be given to employees. However, workplace design and culture can significantly contribute toward employee intrinsic motivation. Consider these factors that affect employee intrinsic motivation3:
- Meaningfulness: The feeling that your work is meaningful is tremendously rewarding. One major way to increase employee perceptions of work meaningfulness is to identify the organization’s purpose or mission in terms other than profit and crosswalk that purpose to the work employees do.
- Choice: Increase remote employee choice by providing employees with schedule and task flexibility, where possible. Trust employees by allowing them to choose their working hours and approach to work tasks.
- Competence: Performing high-quality work leads to a sense of pride/satisfaction in one’s ability. To increase employee perceptions of competence, provide employee development resources and be sure to provide positive feedback when employees perform well.
- Progress: Increasing remote employee feelings of progress can be accomplished by leveraging digital project/performance management software that tracks task or goal completion. Providing “stretch” assignments (e.g., opportunities to lead work or independently solve work problems) to develop remote employees is another way to enable feelings of progress.
Choice Architecture and Nudges
Behavioral science research shows how apparently small barriers to actions (e.g., disorganized websites, wordy documents) prevent people from taking the intended4 next steps. One powerful insight that can be used to avoid these unintended consequences is choice architecture. Choice architecture refers to practice of designing choice environments by organizing the context in which people make decisions in order to minimizing unconscious biases and inadvertent errors5.
An important choice architecture principle is called a “nudge”. A nudge alters an individual’s behavior in a predictable way without reducing potential options or influencing incentives5. As it relates to program design, you can nudge employees toward specific behaviors by influencing the number of choices presented, how the choices are described, and the default choice, among others.
One powerful example of how the benefit nudges can realize relates to organ donation. In their seminal book, Sunstein and Thaler explain how the requirement for would-be organ donors to perform a series of actions to opt into the program effectively deters most people who indicate support for organ donation from actually signing up5. The takeaway is that the default rule has a large influence on the final outcomes, and changes to the default option lead to more individuals signing up to become organ donors (which they want to do) and many saved lives—a true win-win.
To apply choice architecture to the design of your virtual employee recognition program:
- Design virtual recognition program default choices (the path of least resistance) to align with the options most valued by/in the best interest of employees
- Limit the number of virtual recognition communications to reduce information overload
- Limit the number of virtual recognition program reward choices to reduce choice paralysis and program disengagement
- Reduce the number of steps/webpages employees have to go through to access virtual recognition program materials
The success of any program largely depends on its ability to demonstrate improvement or impact. Behavioral sciences use research design to objectively determine whether a program had a non-random effect on planned outcomes. Consider the following research practices when designing your virtual employee recognition program:
- Develop a remote recognition program strategic plan that defines program success and important program data, as well as how you plan to measure, track, and evaluate those data. This is a critical design step that many organizations skip. If your program is rolled out without a thorough strategic plan, you won’t be able to evaluate program impact or make critical data-driven decisions down the line.
- Define and measure important business-focused program outcomes measures (e.g., organizational performance, employee absenteeism rate) in addition to recognition-focused criteria. This will help you understand the effect recognitions efforts have on the organization’s bottom-line, helping to gain and retain executive support.
- Pilot test new remote recognition efforts before full implementation. Running small-scale studies will allow you to determine the effectiveness of the planned effort, without requiring an expensive organization-wide rollout.6
Interested in learning more about employee recognition, behavioral science, or remote work arrangements? Let us know at email@example.com!
Scott Waymouth, FMP Managing Consultant
James Wilcox, FMP Senior Consultant
- Luthans, K. (2000). Recognition: A powerful, but often overlooked, leadership tool to improve employee performance. Journal of Leadership Studies, 7(1), 31-39.
- Murayama, K. (2018). The science of motivation. Multidisciplinary approaches advance research on the nature and effects of motivation. Psychological Science Agenda, June 2018.
- Thomas, K. (2009). The four intrinsic rewards that drive employee engagement. Ivey Business Journal, 73(6), 1-12.
- About SBST. Social and Behavioral Sciences Team. (January 20, 2017). https://sbst.gov/.
- Thaler, R. H., & Sunstein, C. R. (2009). Nudge: Improving decisions about health, wealth, and happiness. Penguin.
- Lindemann, J. (2019). Behavioral Science in Business: How to Successfully Apply Behavioral Science in A Corporate Setting.