IRF Study Highlights Behavioral Economics’ Role In Employee Engagement

The Incentive Research Foundation (IRF) has released a report, “Using Behavioral Economics Insights in Incentives, Rewards, and Recognition: The Neuroscience,” that describes the unifying behavioral economic principles connecting the role of emotions with employee performance.

The most powerful finding is that all forms of reward—monetary or otherwise—are processed in the brain’s master reward center, the striatum, and are experienced as rewarding feelings. For example, when research subjects are offered various forms of reward—ranging from their favorite food to a compliment to a monetary gift—neurons in this structure fire. This means rewarding employees intrinsically by treating them better or rewarding them extrinsically with a gift or money are treated equally in the brain. This important finding is at the base of helping organizations craft more effective, rewarding environments.

“From studies on oxytocin to dopamine to the prefrontal cortex, there is no shortage of emerging neuroeconomics research on what makes humans tick,” says Melissa Van Dyke, IRF president. “[The report] 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 IRF has identified behavioral economics as an important tool to help employers better understand what motivates employees, because it recognizes the majority of human decision-making is emotional as opposed to rational. Behavioral economics integrates social cognitive, and emotional factors to more fully explain human decision-making biases.

To download the full study and the accompanying white paper, “Translating the Neuroscience of Behavioral Economics into Employee Engagement,” click here. The IRF has also released a companion study, “Using Behavioral Economics Insights in Incentives, Rewards, and Recognition: A Nudge Guide,” and white paper, “How to Effectively Harness Behavioral Economics to Drive Employee Performance and Engagement.” Click here to download the companion publications.

filed under industry-news | may-2017
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