{"id":1392,"date":"2019-07-04T11:08:59","date_gmt":"2019-07-04T05:38:59","guid":{"rendered":"https:\/\/www.biworldwide.com\/en-in\/?p=1392"},"modified":"2025-03-26T20:22:00","modified_gmt":"2025-03-26T14:52:00","slug":"optimising-the-art-of-employee-engagement","status":"publish","type":"post","link":"https:\/\/www.biworldwide.com\/en-in\/our-work\/blog\/optimising-the-art-of-employee-engagement\/","title":{"rendered":"Optimising The Art Of Employee Engagement"},"content":{"rendered":"\n
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\n\t\t\t\tOptimising The Art Of Employee Engagement\t\t\t<\/h1>\n\t\t\t\t\t\t\t\t\t\t
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Behavioral economics reveals that motivation goes beyond cash\u2014experiences, recognition, and well-designed incentives drive real behavior change. Learn how leveraging these insights can boost productivity, performance, and retention.<\/p>\n\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

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Engaging and motivating employees to sustain optimum job satisfaction, promote good ethical judgment, and drive a result-oriented work culture, has become the focus of business and HR heads. This calls for more than just a strong leadership team, appropriate work environment, and a standard rewards & recognition program. What organisations need is a keen understanding of human behaviour and decision-making.<\/p>\n\n\n\n

Decision-Making and Behavioural Change, Simplified<\/strong><\/h3>\n\n\n\n

Behavioural economics explores complex human nature and provides valuable insights in developing effective rewards, recognition, engagement and retention programs that evoke the desired change in people. Companies that apply Behavioural Economics principles are in fact said to outperform their peers by 85 percent in sales growth and 25 percent in gross margin, according to a study. Irrational \u2013 or what some consider emotionally driven- behaviour is the key to influencing behaviour change. In several corporate studies, including participants from tyre salespeople to retail clerks to call centre employees, BI WORLDWIDE has observed that irrational desires cause more positive changes in behaviour (and hence performance) than the rational desire to earn more money.<\/p>\n\n\n\n

While conventional economic theory suggests that people will make rational decisions to suit their own interest, the reality is that humans are highly susceptible to Heuristics and Biases, as explained by Behavioural Economics. In reality, people often base their decisions on rule of thumb, experience, shortcuts, and tricks of the trade, than undertaking a careful cost & benefit or data analysis to arrive at the best decision. This trait is universal and prevalent in even highly trained professionals like doctors, judges and accountants, while making complex decisions.<\/p>\n\n\n\n

Motivating Employees – the Cash or Non-Cash Route?<\/strong><\/h3>\n\n\n\n

In any organisation, an employee\u2019s decision to stay loyal and perform to their optimum potential is essentially an economic decision. In such a scenario, tangible rewards and cash may seem like they play a big role in motivating and engaging employees. However, these are merely extrinsic motivators and do not fully represent the bigger picture of human motivation. In their academic study, Shaffer and Arkes explain this as an example of \u201cpreference reversal\u201d, where our brain is telling us we prefer one thing (cash) but we are actually motivated by something else (non-cash).The lure of money alone is not enough to sufficiently motivate employees to put in their best at work. In fact, non-monetary rewards such as experiences – be it a vacation, movie tickets or spa treatments – have emerged to be more effective in ensuring higher levels of productivity, compliance and retention. This means, a personalised experiential reward is far more effective than a monetary reward as an engagement, motivation and rewards strategy. In an increasingly competitive job market where talent is highly sought-after, this can tip the balance in the favour of an organisation that motivates and engages employees with the right impactful propositions.<\/p>\n\n\n\n

Another Behavioural Economics principle, \u2018Loss Aversion\u2019, shows that people are often motivated better by the threat of loss than by the promise of a reward. So, attaching a small penalty for opting out of a workplace fitness session might result in a significant increase in participation rather than offering an equivalent or even higher reward for participation.<\/p>\n\n\n\n

The Secret Sauce behind Powerful Performance and Sustained Success<\/strong><\/h3>\n\n\n\n

According to Behavioural Economics professors Dr. Ran Kivetz and Dr. Itamar Simonson, a major element individuals factor in while choosing an incentive or loyalty program is whether or not they identify an idiosyncratic fit. Idiosyncratic fit is the feeling that you enjoy a unique advantage in achieving a goal, making a sale, beating an opponent, or completing a task. Every time a salesperson on your team is offered a new incentive or opportunity, they ask themselves if the opportunity \u2018fits\u2019 them.<\/p>\n\n\n\n

Extending the same kind of individuality to other contexts helps, as seen with choice architecture. Choice architecture, as Behavioural Economist Richard Thaler explains, is \u201corganising the context in which people make decisions.\u201d An example of framing choices with your team is in performance reviews or incentive opportunities. For discipline, \u201cone way or the other\u201d works very well. But how about when you are trying to motivate someone to get out of his or her comfort zone, set new goals and achieve breakthrough results? How do you overcome their cognitive biases and initiate action? A simple Good-Better-Best scenario can provide the nudge they need. You provide the framework, and let them make the choice.<\/p>\n\n\n\n

Other researchers have shown that a fast start leads to greater success, and knowing how well you\u2019re doing along the way generates higher achievement; otherwise known as \u2018Goal Gradient Theory\u2019 in Behavioural Economics. Statistics show that those who get off to a fast start in an incentive program, typically finish 57 percent higher than those who don\u2019t. Ensuring that tracking progress is relevant to the size and scope of the goal is equally crucial.<\/p>\n\n\n\n

In our experience, designing incentive programs and setting goals using Behavioural Economics principles has given a positive boost to organisational results. By recognising and leveraging the fact that human decision-making is largely driven by emotional factors rather than rational, these principles can be instrumental in improving employee productivity, performance, morale, and retention.<\/p>\n\n\n\n

This article was also published on BusinessWorld<\/a><\/p>\n<\/div>\n\n\n\n

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Looking to build engagement and loyalty for your brand?<\/h2>\n\n\n\n
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Let’s talk<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Behavioral economics reveals that motivation goes beyond cash\u2014experiences, recognition, and well-designed incentives drive real behavior change. Learn how leveraging these insights can boost productivity, performance, and retention.<\/p>\n","protected":false},"author":47,"featured_media":1930,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"associated_experts":[],"featured_image_focal_point":{"x":0.5,"y":0.5},"footnotes":""},"content-topic":[64],"problem-space":[44],"class_list":["post-1392","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","content-topic-behavioural-economics","problem-space-employee-engagement"],"featured_media_global":[],"yoast_head":"\nOptimising The Art Of Employee Engagement - India (English)<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.biworldwide.com\/en-in\/our-work\/blog\/optimising-the-art-of-employee-engagement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Optimising The Art Of Employee Engagement - India (English)\" \/>\n<meta property=\"og:description\" content=\"Behavioral economics reveals that motivation goes beyond cash\u2014experiences, recognition, and well-designed incentives drive real behavior change. 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