by Lisa A. Grimaldi | May 26, 2017
The Incentive Research Foundation has released "Using Behavioral Economics Insights in Incentives, Rewards, and Recognition: The Neuroscience," a report that explains how behavioral economics -- which integrates social, cognitive and emotional factors to more fully explain human decision-making biases -- can help employers better understand what motivates employees.
 
According to Melissa Van Dyke (left), IRF president, the study "curates and explains the research so that incentives, rewards and recognition professionals can use this knowledge to better understand what motivates employees and ultimately create more engaging and productive work environments."
 
The findings show that all forms of reward are processed in the brain's "master reward center," the striatum, and are experienced as rewarding feelings. Whether rewarding employees intrinsically (by treating them better) or extrinsically (with money, trips or merchandise), these actions are treated equally in the brain. 
 
Among specific factors identified:
 
 The halo effect, which demonstrates that more highly positive, emotional experiences increase positive emotion associated with the company;
Emotional stamps, which are the memories that aid in storage and retrieval; they reinforce the necessity for incentive rewards and recognition programs to tap emotions;
Frequency bias, which suggests that the more often reward and recognition happens within an organization, the more it will continue to happen and become a normal part of the business;
Temporal bias, which explains why meetings and incentive travel programs should always end on a high, emotional note, making the high the last thing participants remember;
Drive to bond, which suggest that each instance of reward and recognition should have a face-to-face element; and
Drive to innovate, which explains why each instance of reward or recognition must help the employee learn the exact behaviors that are valued and important to the organization.
 
The full study and the accompanying white paper, "Translating the Neuroscience of Behavioral Economics into Employee Engagement," can be viewed here.