As the Vice President of Reward Systems at BIW, Tim is responsible for leading the development of innovative reward systems.He partners with academic colleagues from leading universities around the world and he is actively engaged with leaders in Fortune 1000 companies to develop solutions for the human side of business problems.
Why is an Oscar statue worth so much more than the metal it’s made of? And what does that have to do with getting your employees more motivation to succeed?
Like many people, I will be watching the Oscars this coming Sunday, but I probably won’t be thinking about the star studded celebrities walking the red carpet and the action-packed movies.
Well, maybe a little bit.
BI WORLDWIDE is in the business of translating our understanding of why people behave the way they do, and translating that into helping our clients reach their business performance goals. As I think about the Academy Awards it reminds me of the type of “biases” often mentioned by the behavioral economists with whom we work.
The Oscar statuette itself is a perfect example of what behaviorists call ‘The Endowment Effect.’ When people earn that award, watch how they hold onto it and cherish it all evening long. It’s not the award itself, but a symbol of the hard work and success it represents. It is the complete lack of economic utility and the rarity of it. The minute they get home, no matter how extravagant their Malibu mansion, they’re going to find just the right place to put that award so that every visitor just has to see it. Even if you offered award recipients a huge amount cash for their Oscars, they wouldn’t exchange it – they want the trophy! That’s because the tangible object has been ‘endowed’ with additional meaning, and has more value to the owner than the materials from which it was made.
And there’s more to that statue than meets the eye. The Oscar statue has sociability, too. Sociability is the term our partner Dr. Scott Jeffrey, from Monmouth University, uses to describe how an item can have a incredibly high value that can’t be accounted for by its surface value. People want to display it in social settings to reinforce their value. That’s why you put your Oscar on the mantel, not in a filing cabinet or safety deposit box: you want to be able to talk about it.
While your employees don’t walk down a paparazzi-heavy red carpet to get to work in the morning, they do have more in common with those Hollywood types than you might imagine. They love to be recognized, not just verbally, but also tangibly, and perhaps with something that will represent the sum of their efforts and be worthy of the celebration that comes with reaching the goal. The plaque, the trophy – even the Oscar statuette – have an important role to play in keeping employees, channel partners and sales people engaged and motivated.