From Gilles Chatelain & Mathias Dörig / PersonalSchweiz

Over the years, the image of an elephant nudging her calf with her trunk has become the symbol of nudging. Nudges should be strong, tender and with good intentions - just like the caring elephant mother. This is founded on an academic understanding of human decision-making. Plenty of companies and governments have discovered nudging as a supplementary tool. HR departments can also often use a nudging elephant in their ranks.

Intelligent software products designed for businesses have modernised countless HR processes over recent years: the best talent is identified using video interviews, employees submit their expenses automatically and the onboarding process from applicant to staff member is a smooth one thanks to digital support. These three examples illustrate how technical solutions increase efficiency in businesses. Nevertheless, humans are still of central importance despite all digital processes. This should, of course, be seen positively, and complies with the human need for a meaningful occupation and to be recognised within a company. However, there is a hidden risk of decisions not in the interest of oneself or the company: a video interview may pose an unpleasant and insurmountable hurdle for some talent, or expenses could be falsified. And a digital onboarding process can fail to meet a need for having decisions backed up or getting used to a new workplace, causing new hires to jump ship before their first day of work. Behavioural psychology strategies - nudges - promise to solve challenges such as these.

Nudges build on the understanding that we don’t all make entirely rational decisions from early morning to late evening, rather simplify our lives with ‘cognitive shortcuts’: we do without a carrier bag costing 5 pence even if it causes us more emotional than financial pain. We reduce our electricity consumption when we find out that we are above the average consumption for our neighbourhood and we make it easier for employees to save for their pensions by automatically allocating a suitable pension plan.

This knowledge is nothing new: it was established no later than 2002, when Daniel Kahneman was awarded the Nobel Prize for Economic Sciences together with Amos Tversky. What is new, however, is using this understanding to develop systematic, effective nudging strategies in order to encourage people to behave in a certain way without force or financial incentive. With the help of simple nudges, England increased the timely submission of tax returns considerably. Users simply had to sign the top of the tax return instead of the bottom. In the USA, tests saw a reduction in the prescription of antibiotics simply by showing the top 20% of antibiotic prescribers how much the bottom 80% of doctors prescribed. In a political context, teams close to the government in the UK, the USA (up to 2017) and Germany have institutionalised and professionalised nudging.

This potential remains mostly untapped in HR. This is not least due to the fact that nudging sounds simple in theory but is often complex in practice. The fine art of nudging requires a well-founded knowledge of behavioural science and is the result of a conscious process:

• Undesired behaviour must be identified first. Nudges can then theoretically be used anywhere where people make conscious or subconscious decisions.
• Based on academic publications and previous experience, the most promising nudges are formulated, then implementation strategies developed to prod the undesired behaviour in the right direction.
• In a third step, the selected nudges will be rolled out, ideally under guidance, and the effects clearly quantified.

The question remains of how the aforementioned HR processes - video interviews, expenses, onboarding - can be supplemented and optimised using nudging. As we like to mirror the behaviour of other people, showing that nerves are normal and felt by most applicants before a video interview would have a calming effect. You could also communicate before the interview that participants rarely find video interviews to be a negative experience. Just like the signature nudge in England, a signature is requested at the beginning of an expenses sheet confirming that all entries are accurate. The onboarding process could increase appreciation and success by nudging early networking with future team members.

The subtlety of a nudge has often led to accusations of manipulation in the past. In actual fact, nudging can also be used against the interest of the person being influenced. This makes it all the more important that it’s seen as a powerful tool that should be used responsibly and diligently. When nudging is used legitimately, you can expect that the ‘nudge for good’ as formulated by Richard Thaler (2017 Nobel Prize for Economic Sciences) will come to fruition. In this sense, employees that are nudged to submit honest expense reports and contribute to a good working environment will also benefit in the long run.

Sources

¹ https://www.tagesanzeiger.ch/wirtschaft/standardverbrauch-von-raschelsaeckli-ging-um-84-prozent-zurueck/story/16111216

² Schultz et al (2007), The Constructive, Destructive and Reconstructive Power of Social Norms, Psychological Science

³ Benartzi & Thaler (2004), Save More Tomorrow, Journal of Political Economy

⁴ Shu L et al. (2012), Signing at the beginning makes ethics salient and decreases dishonest self-reports in comparison to signing at the end. Proceedings of the National Academy of Sciences

⁵ Hallsworth, M., et al (2016), Provision of social norm feedback to high prescribers of antibiotics in general practice: a pragmatic national randomised controlled trial.