Nudge: Promoting Behavioral Change Without Relying on the Candy and the Whip
Encouraging people to change their consciousness and behavior in a short period of time is a complicated challenge. Incentive design that relies on “candy” (monetary reward) and “whip” (penalty) has an immediate effect but getting candy and escaping from the whip itself becomes a goal and prevents people from achieving the original goal voluntarily. In recent years, a "nudge" has been attracting attention as an approach to eliminate such trade-offs.
Nudge is a verb that is commonly translated as a "little poke with your elbow."
In the business context, the implementer of a measure can be defined as "promoting voluntary behavior change with a modest kick, without depriving or distorting freedom of choice." Most recently, I have seen convenience stores and supermarkets that suggest positions to queue by drawing a line every 1m from the front of the cash register, as this will encourage social distancing and prevent the spread of the new coronavirus infection and also create as little congestion as possible. This is an example of a nudge. So, what kind of nudge is effective in personnel measures?
Increasing feedback rate for interviewers
Recording and sharing of feedback from candidates in a timely manner will lead to various benefits in recruiting operations, such as improving recruitment yields and the experience for candidates and ensuring fairness. On the other hand, it is not easy for interviewers to provide timely and accurate feedback while they are busy with their daily workload. Even if you call for cooperation and say that “your timely feedback will enhance the experience of the candidate and strengthen the competitiveness of recruitment" if the interviewer's own merits are not clear, it will be easily regarded as something that is “not my problem”.
Many interviewers want to write most of their feedback during the interview because it is difficult to provide feedback alongside their day-to-day work (In interviews at foreign companies, the interviewer may spend more time looking at the computer screen than the candidate's facial expression). In addition, the interviewer wants to read the candidate’s resume as a preliminary preparation but writing feedback while comparing the resume printed out on paper in advance with the input screen of the personal computer will rather impair the efficiency of input.
Therefore, Uber made it impossible to download the candidates’ resume on paper, and instead made the UI that digitally arranged the resume and feedback entry screen of the candidate side by side as the default (basic specification). This reduced stress when entering interviewer feedback and improved entry rates. This is a good example of the ability of a “nudge” to voluntarily achieve the goal of increasing the feedback rate without depriving interviewers of the freedom to see candidates’ resumes.
Decreasing the unauthorized cancellation rate of training
If you make a reservation but do not participate without a cancellation notice, it is called a "no show". This is a problem that is sometimes seen in voluntary training, regardless of whether the person has bad intentions. In particular, if the training session can only involve a certain number or students, a “no show” may decrease the morale of the training instructor and the benefits of those who wish to participate may be impaired. In this case, the participation rate may be increased by using the "candy and whip" method, such as distributing a novelty to participants and strengthening penalties for cancellations. However, there is a risk of increasing low-quality participants aiming for the novelty and lowering the registration rate. So, what kind of nudge is effective in this case?
One of the approaches that has been shown to be effective so far is the implementation of reminders that tell candidates, "One day left until training. Past satisfaction with this training was 98% (average of all training is 85%). There is a waiting list of 50 people in the training. If you cannot participate, please register for cancellation and give your position to the people waiting in line.” The goal is to appeal to the candidates’ conscience. Google was able to further reduce the No Show rate by including the faces and names of current registrants and prospective participants in the reminders.
Reducing Low Sugar and Low Calorie Foods and Beverages
As part of employee benefits, more and more companies are offering free (or low-priced) food, sweets and beverages in their offices, and more employees are benefiting from it. There was an anecdote that Google once stated, "The Google 15", which referred to the average of 15 pounds (≈7 kg) of "happy fatness" employees gained within one year of joining the company as a consequence of having abundant food and beverage choices. The truth is unclear, but it seems certain that the human resources side was wondering if it would be possible to reduce sugar and calorie intake a little to improve employee health.
It's easy to say that companies should stop stocking chocolate and Coca-Cola immediately, but complaints from employees who have been deprived of their freedom of choice are inevitable. The nudge measure implemented there was to transfer the chocolate that was previously in a transparent to a non-transparent container, relocate Coca-Cola to the bottom or in the case of a glass-door refrigerator which is relatively harder to remove. Then they decided to put a mosaic sticker to cover the glass. Both have succeeded in reducing overall sugar and calorie intake without completely depriving employees of their choices.
Theoretical backing for the nudge
At first glance, these cases seem to be effective techniques, and may not seem reproducible. In fact, the nudge itself has a short history, and there are not many established theories and frameworks (* 1). However, in practice, it can define problematic events and desirable states and eliminate bottlenecks (inhibitory factors) and can be regarded as almost the same as a normal problem-solving approach.
On the other hand, the unique points of the nudge policy are that it (1) has a simple and immediate effect, (2) can utilize the unconscious bias and nature of human beings, and (3) not being overly dependent on candy and whip. And so on.
For example, in the case where the unauthorized cancellation rate of training was reduced, the attendance status was improved by combining reminders, benchmarks, and conscientious communication. By doing so, they succeeded in suppressing social omissions. Each element is a theory or approach that has been proven in behavioral economics and cognitive psychology, and it can be said that the combination of these is strangely interesting as a "nudge measure".
(* 1): The OECD (Organization for Economic Co-operation and Development) advocates a framework called BASIC, and BIT (commonly known as the Nudge Unit), which is a subordinate organization of the Cabinet Office in the United Kingdom, advocates a framework called EAST (the following English text, both PDF).
Although these examples are not limited to the human resources area, the nudge does not have many established theories, so there have also been some cases where it has been misused.
(1) The Boomerang Effect
The “social norm and conscience” approach also risks having the opposite effect of the original intention if the norms itself are ambiguous. At one nursery school, the increase in overtime work of nursery teachers became a problem, and they decided to collect a new "extension fee" to eradicate the cause of the problem. However, this created an unintended norm among parents that "if you pay the extension fee, you can extend nursery time without hesitation", and the extension rate increased more than before the extension fee was implemented.
Furthermore, in order to promote energy saving, one local government implemented a measure to provide benchmark information to each household, such as "Your electricity consumption is 10% more/less than the average of the neighbourhood". Households that consumed more than the average tended to reduce their
consumption, but households that did not consumed less than the average, perhaps because of a new norm, felt that "it is okay to consume a little more" leading to a tendency to increase their energy use, and the overall power consumption was almost the same before and after the implementation of the measures.
(2) Bad nudge = sludge
Regarding nudges, there are various cases of its use in the marketing field prior to the human resources field, but there are also cases in which the benefits to consumers are impaired, probably because of excessive competition for acquisition. For example, turning on e-mail newsletter reception settings without permission every time an user changes their account information and continuing to "refute" the reason why an user should not unsubscribe on the “unsubscribe” screen. These cases show how a person’s freedom of choice is distorted, and is called sludge, or when a nudge goes wrong.
In either case, whether the implementation of the measures does not distort the freedom of choice of the target person (or at least whether the
employees feel that way), or whether the desired behavior change is caused, depends on the execution target determined.
While repeating the A/B test by narrowing down or setting a comparison target group, if a problem is detected, it is necessary to correct the trajectory or stop it.
However, if a nudge can be used well, it will be possible to improve the efficiency and bottlenecks of personnel-related work, as well as the well-being of employees, and realize immediate and sustainable change management that does not depend only on candy and whips.