leveraging behavioral nudges in your hr function
Post on 13-Feb-2017
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Leveraging Behavioral Nudges in Your HR Function
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Speaker: Sarah Newcomb Behavioral Economist Morningstar Inc.
Moderator: Kellye Whitney
Associate Editorial Director Workforce magazine
Leveraging Behavioral Nudges in Your HR Function
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Kellye Whitney Associate Editorial Director Workforce magazine
Leveraging Behavioral Nudges in Your HR Function
#WFwebinar
Sarah Newcomb Behavioral Economist Morningstar Inc.
Leveraging Behavioral Nudges in Your HR Function
Leveraging Behavioral Nudges In Your HR Function August 20, 2015 Sarah Newcomb, Ph.D. Behavioral Researcher HelloWallet, Morningstar
“The most practical strategy for
accumulating several hundred thousand dollars” for retirement.
- Opinion Research Corporation for the Consumer
Federation of America and the Financial Planning Association
More than one in five Americans think that playing the lo?ery is
Encouraging Behavior Change
WHERE WE’RE HEADED 1. Choice Architecture
2. Nudging for Op6mal Outcomes 3. When in Doubt…Test!
Choice Architecture & Nudges
“A choice architecture represents the interface – menu, ordering and structure –
of opEons that are available for individuals.”
-‐ Tepo Felin, Nudge: Manager as Choice Architect, 2014
How do you get people to eat fewer calories1?
1. Wansink, B., and van I?ersum, K. 2013. “PorEon Size Me: Plate-‐Size Induced ConsumpEon Norms and Win-‐Win SoluEons for Reducing Food Intake and Waste.” Journal of Experimental Psychology: Applied 19 (4): 320–32.
Boost Organ Donation Rates2?
2. Eric J. Johnson and Daniel Goldstein “Do Defaults Save Lives?”, Science 21 November 2003: 302 (5649), 1338-‐1339.
Get a Flu Shot3?
3. Milkman, K., Beshears, J., Choi, J., Laibson, D., and Madrian, B., “Using implementaHon intenHons prompts to enhance influenza vaccinaHon rates.” PNAS, vol. 108 no. 26, pp.10415-‐10420
Choice Architecture & Nudges When are they needed and/or
appropriate?
When natural biases threaten desired outcomes
• Hiring • Benefits SelecEon • Engaging with Online Tools
Nudges in Hiring Know the natural biases that interfere with
opEmal talent acquisiEon
• Men, or masculine leadership styles • A?racEve people Marlowe, C.M., Schneider, S.L., & Nelson, C.E.
(1996). Gender and a?racEveness biases in hiring decisions: Are more experience managers less biased? Journal of Applied Psychology, 81.
• Those who are like ourselves • Preference for potenEal over actual
experience. Tormala, Z.L., Jia, J.S., & Norton, M.I. (2012). The preference for potenEal. Journal of Personality and Social Psychology, 103, 567-‐583.
Diversity in Hiring is Threatened by…
Implicit Biases • Managers of BOTH sexes are twice as likely to hire a man than a woman4. • And then there’s this graph showing implicit racial bias among whites in the U.S.
4. Reuben, E., Sapienza, P., & Zingales, L. (2014). How stereotypes impair women’s careers in science. Proceedings of the NaHonal Academy of Sciences , 111 (12 ), 4403–4408.
Homophily Noun:
The tendency of individuals to associate and bond with similar others. The presence of homophily has been
discovered in a vast array of network studies.
5. Miller McPherson, Lynn Smith-‐Lovin, and James M Cook, “Birds of a Feather: Homophily in Social Networks” Annual Review of Sociology, Vol. 27: 415 -‐444, 2001
Because informal networks are prone to homophily, exis6ng paVerns of gender and race bias can be reinforced
by company referral programs. (Cohen et al., 1998; Fernandez et al., 2000)
Diversity in Hiring What to Do?
• 48% of employees are not aware of iniEaEves to increase diversity within the company they work for.
(Glassdoor survey, July 2014)
Let employees know that diverse applicants are encouraged, and be open about the traps of groupthink that arise from homogenous work
environments.
Make it a known issue in your workplace
Nudging Greater Diversity
• “Feel the Need” messages. Help people to get past an intellectual understanding of the need for diversity. Make it emoEonal. Show them how the difference in added producEvity that diverse workplaces have will affect the company’s survival, or their annual bonus.
What are your company’s HR Icebergs?
Diversity in Hiring Knowledge is Power
Inform hiring managers of specific gender and racial biases and how they can affect the hiring process. Have them assess their own implicit biases using Harvard’s Implicit
Antudes Test
h?ps://implicit.harvard.edu/implicit/takeatest.html
Nudges in Hiring
• When relying on informal networks like employee friends & family members for referrals, homophily is a threat to diversity. Make sure your company’s referral incen%ves are weighted by the company’s objecEve to increase diversity.
Benefits Selection
60% Of households are accumulating debt faster than retirement savings
…most employees simply want someone to tell them what to do…based on a deep understanding of an individual's needs, preferences, and behaviors, which results in more personal guidance. – Amy Cribbs, Head of Vanguard Participant Experience
“ We’re facing a crisis of under-‐contribuEon
and reErement plan leakage
Benefits Selection
Freedom of Choice Expansion of Informa6on
PotenEally lead to increased saEsfacEon…BUT… Come at the cost of cogniEve load.
Mo’ Choices, Mo’ Problems • SelecEon difficulty is one of the key drivers of DECISION AVOIDANCE 6
6. Anderson, C. J. (2003). The psychology of doing nothing: Forms of decision avoidance result from reason and emoHon. Psychological BulleHn, 129, 139–167. 7. Schwartz, B., Ward, A., Monterosso, J., Lyubomirsky, S., White, K., & Lehman, D. R. (2002). Maximizing versus saHsficing: Happiness is a maTer of choice. Journal of Personality and Social Psychology, 83, 1178–1197.
• MaximizaEon moEves 7 • Greater regret • More social comparison • Greater incidence of depression
Encouraging Action: Make it Simple
A simple heart icon was be?er at improving diet choices than calorie/fat content info8.
8. Boonme, K., Hanus, B., R. Prybutok, V., A. Peak, D., & Ryan, C. (2014). Visual informaEon influences consumer fast-‐food choices. NutriEon & Food Science, 44(4), 279–293. 9. Maureen Morrin, Susan M. Broniarczyk, J. Jeffrey Inman (2012) Plan Format and ParEcipaEon in 401(k) Plans: The ModeraEng Role of Investor Knowledge. Journal of Public Policy & MarkeEng: Fall 2012, Vol. 31, No. 2, pp. 254-‐268.
Star raEngs reduce perceived choice difficulty. Offering star raEngs for funds increased
adopEon and saHsfacHon rates among employees with low
financial knowledge9.
Encouraging Action: But not Too Simple!
Perceived task complexity drops when the focus is placed on key a?ributes10.
BUT...Too few opEons can promote the search for more opEons, triggering the Maximizing MoEve and the user will ulEmately be less saEsfied11.
Incomplete informaEon about key a?ributes increases decision difficulty. 4. Broniarczyk, S. M., & Griffin, J. G. (2014). Decision Difficulty in the Age of Consumer Empowerment. Journal of Consumer Psychology, 24(4), 608–625
Encouraging Action: Decision Aids Pros & Cons
Adapted from: Broniarczyk, S. M., & Griffin, J. G. (2014). Decision Difficulty in the Age of Consumer Empowerment. Journal of Consumer Psychology, 24(4), 608–625.
We’re testing everyday: big theories SOCIAL PROOF GAIN LOSS AVERSION CONTROL
Clear Winner!!
We’re TesEng All the Time: Big Theories
We’re testing everyday: small details
Time of day, day of week • Tuesday at 10:30AM • Wednesday at 10:30AM, 12:00PM, and 5:30PM • Thursday at 10:30AM • Sunday at 5:30PM
Clear Winner!!
We’re TesEng All the Time: Small Details
We learned a lot, and increased conversion by 80%!
Key Findings: What’s Worked
Call to Action Original: “Start Today”
New: “Get My Account” Result: 42% Conversion Increase
Time of Day & Subject Line Original: “[Employer] Associates, Introducing a new
tool from your 401(k) plan!” at 11:00AM EST New: “[Employer] Associates, Your HelloWallet
Account is Ready!” at 10:30AM EST Result: 13.7%* Conversion Increase
Ease of Sign Up
Original: Email to Landing Page New: Email to Sign Up Page
Result: 36% Conversion Increase
Key Findings: We’re Wrong!
Aspirational Template Base: Original Template Design
Tested: Aspirational template design Result: 37% Conversion drop for test group
Unique Subject Line & Sender Base: [Employer] Benefits sender and “Reminder, Your
HelloWallet Account is Ready!” subject Tested: “Your Financial Future” sender and “Come Find
me On HelloWallet” subject Result: 66%* Conversion drop for test group
Omit “Free” and Shift to Social Proof Base: Reminder with “Free” in Header and no social
proof Tested: Remove “free” and include social proof statement
Result: 36% Conversion drop for test group
TesEng Helped Us increase Conversions By 80%
Resources
45 posts on A/B, Mul6variate, and Usability Tes6ng:
h?p://Enyurl.com/pa259rx
h?p://www.amazon.com/Designing-‐Behavior-‐Change-‐Psychology-‐Behavioral/dp/1449367623
h?ps://whichtestwon.com/
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