HR Professionals need to get up to speed with behavioural sciences

1st July 2015

There’s an ever increasing amount of evidence from the behavioural sciences sector that reward strategies are the most important element of getting the best out of a team, however many businesses lack understanding about getting the recipe right for rewarding their team.

Behavioural science research is starting to draw conclusions not only that we are more motivated by reward than punishment, the discipline is also starting to understand how different types of rewards affect our human behaviour.

There still needs to be more understanding and it’s important that HR professionals and business owners understand how rewards may affect their team in an organisational setting. Although there’s still a long way to go, basing our rewards programs on behavioural research is a much better idea than using assumptions to create recognition policies.

In their March 2015 report entitled “Show me the money 2015 Behavioural Science of Reward” the CIPD review how employees respond to a large variety of different kinds of rewards.

The report demonstrates that money can have a strong impact on how employees behave, however there can be negative effects which in some circumstances can undermine motivation.

The reports also demonstrates there is a conflict between the need for individual and team recognition and diminishing returns on rewarding individuals financially, which can lead to dissatisfaction.

The report suggests we need to be placing more emphasis on the intangible elements of rewarding, and this is where social rewarding comes in.

We now live in a much more social era in which continual feedback is expected by employees and following the recession we can clearly see the impact on reducing financial recognition initiatives for employees, which have often left those who feel “out of pocket” the hardest.

A more consistent and cost effective approach to rewarding the team is a much more pragmatic alternative to financial rewards which can then be embedded as a fundamental part of the company’s culture.

This social rewarding and social recognition can be daunting for many businesses and HR teams will often fall back to the tried and tested methods of financial rewards, despite their questionable usefulness. The report says “We believe the application of behavioural science insights to people management and development has the potential to be game changing.”

The areas of behavourial sciences that HR professionals and business owners should concern themselves with include:

  • Cognitive psychology – studies mental processes, thinking, memory and perception.
  • Occupational psychology – applies psychology to recruitment, people management and learning and development.
  • Organisational cognitive neuroscience (OCN) – explores the relationship between the biology underlying mental processes and behaviour in organisations.
  • Behavioural economics – examines how psychological and social factors impact on economic decisions.

In addition it’s important to understand how we react to rewards. These include:

  • Prospect theory – a theory that shows how individuals determine the perceived value of losses and gains. It states that people make decisions based on the potential value of gains and losses rather than what actually happens. The theory suggests, for example, that individuals tend to overweight subjectively the value of a loss compared with a gain. Quite simply, an individual who loses £5 and the next day finds £5 will not ‘break even’ psychologically.
  • Temporal discounting – suggests that deferral of a reward will lead to a perceived reduction of its value. In addition, our perceived value of the same reward diminishes over time.