5 things HR can learn from the Nudge Theory

I saw a prime example of the ‘nudge’ theory in action this week, while having lunch at an organisation I was visiting. Information about the calories in the various meals on offer was prominently displayed, to help those who were watching their weight or trying to eat more healthily make appropriate choices. It certainly worked for me. I walked past the chips, headed for the salad bar and as a result probably had more energy for the rest of the day.

The nudge theory has been around for a while now. It centres around using behavioural science to encourage people to make better decisions, both for themselves and the overall good of society. Famously adopted by the Cabinet office in the UK, early successes included achieving a 15% rise in tax payments by pointing out in reminder letters that the majority of others paid on time, as well as adding 100,000 organ donors to the national register by prompting people to sign up when they paid for their car tax.

Although there is understandably a concern about where the line falls between ‘nudging for good’ and outright manipulation, the public and health sectors have enthusiastically embraced the idea.

So does ‘nudging’ have anything to offer HR – and how could it be used to support the management and engagement of employees?

1. Cultural Change

The nudge principle can be used to good effect if the business is trying to make a cultural shift. Maybe a move to more collaborative working, for example. Collaboration expert Pierre Battah of Qimple points out that the simple act of moving two departments you want to collaborate physically closer together can encourage people to inter-act. Positioning water coolers or tea and coffee stations in central areas (alongside casual seating) can also prompt people to network and get to know colleagues better. The introduction of a coaching culture can also influence behaviours, with managers nudging their employees during coaching sessions towards the kind of insights and solutions that will be good for the business.

2. Financial planning

There’s a growing debate about the need for employers to support the financial well-being of their staff. Employees who are worried about mounting debts or whether they will have enough money to retire on are highly likely to be stressed and not performing at their best. Auto-enrolment is a good example of where the nudge principle is already being used to help people become more aware about the financial decisions they need to make. And to make pension saving the default option, rather than something they actively need to opt into.

3. Health and Well-being

Employers are increasingly treating the physical and mental health of their staff as a business priority. It’s now largely accepted that if the workforce is happy and healthy, the organisation will benefit from reduced absence, higher productivity and more enthusiastic and engaged employees. According to a report in People Management, Google helped to cut its workers collective calorie count by three million after it positioned the healthy foods in its canteen more prominently. Bike-to-work schemes, fitness competitions, or inter-departmental sporting contests are other initiatives that can help to nudge healthy behaviour.

4. Employee Recognition

People’s behaviour is strongly influenced by what they see others are doing. So it follows that staff recognition schemes are a great way to cause a ripple effect. Initiatives such as ‘employee of the month’ or ‘customer service star’ — where staff are publicly recognised and rewarded for their efforts — prompt people to think about their own work practices and how they might emulate other successful colleagues. Rewarding good health and safety behaviour, as opposed to ‘telling people off’ for not using the right equipment, has also proven to be a more successful approach.

5. Compliance

Gentle ‘nudges’ can also be really useful when you are struggling to get people to comply with corporate systems or change long-held ways of doing things. The performance management process is a prime example. Setting your HR software system up to ‘nudge’ managers when appraisals are due, rather than chasing them down the corridor, is more likely to result in the process being completed on time, particularly if you can introduce an element of competition by showing completion rates in other departments.

One action to take this week: For more ideas on how you can use nudge principles in your role, visit the Behavioural Insights website (www.behaviouralinsights.co.uk) or read ‘Inside the Nudge Unit: How Small Changes can make a Big Difference’, by David Halpern.

 

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