Nudge theory can help change your employees' behaviour (without them even realising)

If you want to persuade your people to do things differently, don't just throw your toys out of the pram – get a helping hand from behavioural science

Nudge theory can help change your employees' behaviour (without them even realising)

Are we in control of our own decisions? It might seem at first an almost ridiculous question in an era when, superficially at least, we have never had more personal freedom. And yet in everyday life we are assailed from the moment we wake up by a wealth of gentle pressures steering the choices we make: from supermarkets that waft the smell of baking bread first thing in the morning, to the ‘recommended’ contract that comes with the new iPhone, and speed bumps that become gradually closer together on busy roads. The choices may be our own, but the context is everything. 

Nudge theory – the science behind subtly leading people into the ‘right’ decision – is everywhere, once you wake up to it. It’s often propagated by a business or a government department, though individuals can adapt it to their own needs. And Britain both invented and perfected it.   

Decried in its infancy as a ‘wacky and voguish’ initiative from the UK government, nudging works on the principle that small actions can have a substantial impact on the way people behave – and it creates ‘choice architectures’ for these actions that encourage (but don’t force) people to make better decisions. 

Creating such architectures became a key strategy in 2010, when the coalition government founded the Behavioural Insights Team (known as the Nudge Unit) to improve social outcomes using low-cost interventions. Now jointly owned by the government and social innovation charity Nesta, the unit’s track record includes successful nudges on tax payments, charity giving, electoral participation and organ donation – from spring 2020, everyone will be considered to have no objection to becoming an organ donor, unless they specifically register to opt out. This change, which is counting on most people’s tendency not to act, is expected to save 700 lives a year.

Today, everyone is doing it. An HR professional preparing two different benefit schemes is participating in choice architecture, as is a GP who offers a patient two options for treating an illness. 

At face value, the idea of nudging (or “liberal paternalism”) may seem intrusive – but by persuading people towards better choices rather than mandating behaviours at work, it’s possible to create lasting change in everything from wellbeing and safety to pension take-up, as well as empowering employees. All of which means the people profession could benefit more than most from buying into the power of the nudge; as the CIPD’s report – Our Minds at Work: The Behavioural Science of HR – argued, while the profession spends much of its time creating policies that ultimately benefit the organisation, designing effective interventions demands consideration of how people think and what influences their behaviour. 

As Jonny Gifford, senior advisor for organisational behaviour at the CIPD, says: “This is not possible without a decent understanding of two related things: first, how people perceive and respond to different environments, incentives and threats; and second, how interventions can work against each other and inadvertently be undermined.” 

According to Richard Thaler, godfather of nudge theory and co-author of Nudge: Improving Decisions About Health, Wealth and Happiness, nudges are valuable because people behave in fundamentally irrational ways. Social psychologist Daniel Kahneman is celebrated for establishing that our brains operate on two different systems of thought – System 1 provides the automatic reflex responses that remind us to duck if something is heading for us; while the more rational but slower System 2 controls conscious thought processes. Nudging recognises that System 1 thinking often overrides the more rational process when making decisions, a concept that won Thaler the Nobel Prize for economics in 2017. 

“The great insight, which may sound straightforward but was not being built into how people thought about decision-making, particularly in economics, was that people sometimes do things that are seemingly not rational – at least as defined by economists,” says Robbie Tilleard, who leads the Behavioural Insights Team’s work improving wellbeing and productivity in organisations. “Nudging is an acknowledgement that our environment informs our decision-making, and explores how we can set up that context to make informed decisions, rather than an automatic, potentially uninformed decision.” 

Workplace nudging can be seen most prominently in the area of pension saving – a relatively simple decision that can have huge ramifications for individuals. When Siemens, for example, wanted to boost the level of contribution among its 15,000 employees, it faced the natural negativity many people brought to discussions about finance. 

“We found that when you tell people what they need to do in retirement, at best people ignore it, and at worst [they] actually rebel against the idea,” says Jeremy Beament, founder of consultancy Nudge Global, which worked with the engineering giant on its ensuing campaign. “What you don’t want to do is brainwash. [Nudging] is not brainwashing, it’s about enabling.”

The result was a personalised email campaign covering 26 different variations depending on the age, salary and current contribution level of each employee. Messages included unusual images, attention-grabbing titles and relevant financial tips to help employees save more. “We implemented a ‘confidence bias’,” Beament says. “If you provide a benchmark such as ‘people like you save £100 a month’, 85 per cent of people will want to be above that benchmark because they think they are better than the average person. Equally, if you put a message about debt in there – ‘People like you are £100 in debt each month’ – 85 per cent will want to be below that, so they are beating the average.” 

Messages were channelled towards the communication platform employees were most likely to use – email, WhatsApp or SMS – and of the 11,000 people targeted, 2,500 changed their contribution by an average of 2.1 per cent. It echoes the broader government auto-enrolment strategy, a classic example of a ‘low hassle’ nudge which capitalised on individual inertia by changing pensions to a standard opt-out rather than opt-in scheme. According to figures published in February, 10 million workers have auto-enrolled into pensions, and fewer than 10 per cent have opted back out. 

But nudging can also happen on a more localised level. The headquarters of East Sussex Fire and Rescue Service in Lewes is peppered with blue painted footprints – a trail marking safe walking routes around the site, which was installed by chief fire and rescue officer Dawn Whittaker in an effort to persuade people out of the office during lunch and afternoon breaks.

“We wanted to encourage walking – healthy body, healthy mind – so it was as much about an on-site walking route as it was getting staff out of the office and away from their emails,” she says. “People ask what they are for, and we tell them to see where they end up. There’s your nudge – they’re out of the office.” 

It might not sound like much: but the beauty of choice architecture often lies in its simplicity. Possibly the most famous example of nudging is a small house fly painted on the urinals in Amsterdam’s Schiphol airport. This tiny but highly effective intervention, conceived by an airport staffer, reduced unpleasant spillage by 80 per cent on the basis that when presented with a target, men instinctively aim for it. 

For the Behavioural Insights Team, good nudges follow the EAST acronym: easy, attractive, social and timely. Rob Baker, founder and ‘chief positive deviant’ at consultancy Tailored Thinking, deployed it in full when he wanted to improve take-up of annual leave at the University of Melbourne during his time as a higher education HR professional. 

His campaign targeted academics with step-by-step guides to taking leave, outlining the health benefits of time off and stating how many days they were entitled to by the end of the year. He included a dash of social pressure by showing that all heads of department had booked their full allocation.

“Getting someone to take a tiny step in the direction that you want makes it more likely they will actually achieve it in the long run,” he says. “In this way, nudges are a powerful tool for improving wellbeing.”

According to communications expert Dominic Ridley Moy, who uses behavioural insights to improve workplace communication, the devil is in the detail. “Nudging well is about catching people when they make the big decision,” he says. “Think: what is stopping people in terms of their situation, attitude and thought process? How can we make it easier for what they want to do?”

While technology is a useful enabler, peer pressure is an even more powerful force when it comes to behavioural change. When charged with turning an organisation’s rigid nine-to-five culture into one of flexible working, one of the first things the Behavioural Insights Team and its partners addressed was what managers were up to. 

“People don’t take up concepts like flexible working because of social norms in the office – often the perception of whether a manager or their peers would approve. It can be difficult to disrupt those habits in the face of that potential disapproval,” he says. 

By enlisting managers to advocate for flexible working, and adding an incentive with an interdepartmental competition to find the most flexible team, opinions began to change. Then came the most interesting nudge: the team changed the organisation’s email calendar from the classic nine-to-five to 10-three, reducing the default window in which staff members could schedule in-office meetings. “If you tried to set up a meeting outside those hours, a pop-up would appear which said ‘did you know this is non-core working hours?’” Tilleard says. 

The interventions saw a 7.1 per cent increase in the amount of flexible working taken up in the organisation. Critics might argue that this result is relatively small in the context of the amount of work involved. However, it is low cost and avoids the risk of making a new practice mandatory. “The issue with mandating something is the potential for removing autonomy, which is potentially a dangerous thing to do in terms of employee engagement,” Tilleard says. “You don’t want to encourage people to avoid taking responsibility for their ideas.”

By nudging people into engaging, the hope is that positive longer-term trends will become second nature. As well as nudging colleagues to tackle their wellbeing, Whittaker has turned to behavioural insight to boost diversity and inclusion in a male-dominated environment. The service has signed up to the global #HeForShe gender equality initiative, where male members of staff actively encourage female colleagues to put themselves forward for promotion. 

But Whittaker also sends female officers messages of congratulations on their professional achievements, along with a drawing of a chief fire officer’s hat. “With more than 15 years in the service, I often find that women are reluctant to put themselves forward, so going for promotion can be difficult,” she says. “We want to work with the real talent among our female firefighters to make them feel they can be equal to their colleagues.” 

Not everyone is convinced nudging is a cure-all solution. Critics fear it can cross over into intrusion. And even behavioural interventions that seem easy wins have the potential to go wrong, as one study of daycare centres in Israel found. When parents were asked to pick their children up at 4pm, most followed through – but once the nurseries decided to actively encourage the practice, with a threat of sanctions for persistent non-compliance, parents seemed to care less about showing up. By affording people the autonomy to make better choices, there is always a risk they will reject them. 

Above all, a nudge should aim to improve the welfare of the people it targets. Unfortunately, and especially where companies stand to benefit from a negative nudge, this is corruptible. “When you’re enabling better decisions under a clean business model, it’s great, but if you’re a bank looking to sell loans using behavioural insights to sell that model I’m uncomfortable with that,” Beament says, citing credit card companies who use situational bias to send targeted offers to their customer base at times of greater spending like Christmas and birthdays. “There’s an ethical conversation to be had around the use of nudging for nefarious means.” 

Thaler himself warned about the dangers of so-called ‘evil nudging’ in a 2015 article, criticising nudges that violate all three of his “guiding principles”: nudges should be transparent, not misleading; it should be easy to opt out; and the behaviour change should be in the user’s best interests.” 

Yet for HR – a profession where the stakes lie predominantly in the people – there seems every reason to familiarise yourself with the power of nudging; not only for serving your organisation, but potentially growing your personal influence as well. And after all, didn’t you know colleagues who do are happier, richer and more successful as a result?