Change Management Storytelling: I gave Incentives and Change implementation failed

Why desired change behaviours should never be incentivised?

Last week I was invited to speak on Storytelling for Change at a Learning Festival of an Organisation. I was surprised to notice that the employees upon attending a speaking session were allowed to get a stamp on their Learning Passports and once they had certain numbers of stamps they could win prizes like i Pad etc. So, it was incentivised learning that puzzled me.

Coincidentally, on the same day Susanna Gallani published a an article in Harvard Business Review, Incentives Don’t Help People Change, but Peer Pressure Does. which gives great insights on why Peer Pressure is a better strategy than Incentives for Change

Key findings of the article 

Gallani shares a study from California Hospital in which there is data collected to show contrasting effects Incentives and peer pressure have on Hand Hygiene Practice.

In California Hospital, Hand Hygiene Campaign was run for 90 days and there was a bonus announced of $1,200 at the end of 90 days for good hand hygiene practice.

On average, bonus-eligible hospital employees improved their performance during the 90 days of the initiative, but then progressively trailed back to levels of performance as low or worse than prior to the initiative.

Physicians who were not eligible for bonus and demonstrated a slower improvement relative to the other employees, during the 90 days, but maintained a significantly improved hand hygiene performance over the remainder of the period.

What was the incentive for the Physicians? 

According to California law, physicians cannot be hospital employees (as opposed to, say, nurses or technicians). Because of this, their hand hygiene performance would contribute to achieving the hospital-wide goal but they would not be eligible to receive any performance bonus.

Thus, the employees devised various creative ways to put pressure on doctors, albeit informally and not in the form of cash.

Physicians that demonstrated good hand hygiene practices would have their names written on hand-shaped paper cards and posted on a wall, for examples. The chief nursing officer would send physicians “love notes”: celebratory emails underlying good performance, or respectful — but firm — reminders of the importance of their cooperation to achieve the collective goal, depending on the physician’s observed behavior.

In essence, while monetary incentives generated a more pronounced improvement, it was short lived. On the other hand, peer pressure techniques generated a change in organizational behavior that persisted beyond the removal of the incentive.

How can we apply these insights for effective Change Implementation? 

1. Firstly, do not incentivise the change behaviour

2. Give recognition to those who practice change publicly. 

What is the best way to give Recognition Publicly? 

Sharing Success Stories are a great way for leaders to not only give recognition Publicly but also create models on what good looks like.

Narrative’s Change Management Storytelling is designed to help you learn how to tell Success Stories that create Positive Peer Pressure to Change

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