Nudging and Transparency

With nudging techniques all around us, the question for many businesses has moved from whether to nudge, to how to nudge employees. And how we nudge can make all the difference.

Nudging is most hotly debated in public policy. Interestingly, though, some classic examples of nudges target employee wellbeing. Think of the smart design of cafeterias. Cafeterias can change the order in which food items are presented, put healthy food at eye level or remove trays. As a result, employees often eat (a little) healthier and less. Or think of using default contributions to increase retirement savings. Employees often do not save enough for old age, but companies can switch the default such that employees automatically save some income for retirement (and receive the employer’s contribution). Moving from an ‘opt-in’ to an ‘opt-out’ increases how much employees save 1.

What makes such interventions ‘nudges’? According to Thaler and Sunstein, a nudge is “any aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives” 1. Nudges are not heavy-handed interventions. They leave freedom of choice intact and are often cheap and easy to implement. Nudges also connect well with a push towards evidence-based policy-making, since it is often easy to assess how effective nudges are 2.

Of course, those reasons make workplace nudging attractive, too. Employee wellbeing is becoming increasingly important, yet many ‘wellness interventions’ can be costly and often ineffective. Instead of targeting wellness directly, some argue we should focus more on boosting employee autonomy and ‘ownership.’ Nudging here offers attractive opportunities to improve employee wellbeing without pushy, freedom-reducing and costly interventions.

Nudge proponents further argue that we often have no choice but to nudge one way or another anyway. You will have to arrange the food in your cafeteria somehow (even if randomly). And any choice architecture can impact what selections employees are going to make. So, if influence is often inevitable, why not nudge people in the right direction 3?

Of course, nudging is not a perfect solution. Even though choice architecture is often inevitable, we sometimes recoil at the intentional influence of others: when HR specialists and managers deliberately steer our choices, we might have relational worries that do not apply when choice architecture is random 4. And maybe autonomy does not simply mean ‘freedom of choice’ but also an area for ourselves where we are undisturbed, without an HR specialist trying to improve our behavior. And even more serious objections loom: Is nudging not condescending, akin to treating employees as children? If you really want to change employees’ behavior, isn’t it more respectful to just engage them in conversation?

Proponents often respond that such worries disappear if you nudge transparently. How you nudge makes all the difference. HR departments need not turn into clandestine manipulators in order to effect change. Instead of steering employees in the dark and behind their back, they can nudge openly and with candor. After all, if nudges promote wellbeing and align with the goals that employees themselves have, why hide them?

Now, transparency does not mean you need to spam employees with information about every single nudge. It suffices to clarify what the general goals are and what techniques are used to achieve them. Not every ‘token’ of nudging needs to be labelled (‘careful, this is a nudge!’). But individual nudge tokens should be such that if an employee were to look for instances of nudges, they could in principle detect them 5 6.

However, some respond that transparency makes nudges ineffective. Once you know that you are being nudged, the worry goes, you might second-guess your impulse and make an informed choice. Did you really want salad for lunch, or did you just grab the first thing on the counter? Voila, the nudge stops working. However, the evidence so far does not support this worry. Making nudges transparent generally does not reduce their efficacy 7 8 9. One minor exception is called reactance: sometimes people might do the exact opposite, and even act contrary to their preference, just because they are annoyed by the nudge 10. But reactance doesn’t happen often, and when it does, its effect size is small. So, if you have a good relationship with your employees, they are not going to scoff at unhealthy food to protest your health nudge.

So, transparency is a good idea. But note that transparency alone is not always sufficient. It matters not only that goals are transparently communicated but that they are also widely shared. Even better is when employees have a say when goals are developed, for example through feedback, discussions, or surveys. Doing so will shorten the distance between the ‘nudger’ and the ‘nudged.’ Employees might also be more likely to welcome nudges if they are transparent and subject to their direct or indirect control. Of course, more ‘democracy’ does not always mean a simple majority: sometimes a majority might favor policies that ignore minority interests. Take nudges that change norms around healthy living for example. Good health nudges should not change norms in ways that exclude or stigmatize people unable to live up to those norms.

Further, there is a risk of overreaching. Sometimes employees might prefer and need some personal space where they are not nudged at all, even if a nudge exists that could help them. Some employees might also worry that the distinction between their private lives and their work life is blurred. Should companies really be in the business of stimulating employees to eat healthier, exercise more, and so on? Such considerations suggest that even well-intentioned corporate nudgers should be mindful that there is a limit to how much nudging is advisable.

Many of the questions around nudging resonate with debates around employee wellbeing and autonomy. A central determinant of employee wellbeing is having autonomy and control at work – control over their work, their physical workspaces and time, and over the means they deem best to achieve their goals. How does nudging fit in? Our discussion so far suggests that, because nudging preserves choice, it’s a good candidate when you care about employee autonomy. Moreover, transparency and democratic involvement over nudging further strengthen autonomy.

Some nudges could heighten employee control over their work. Consider how (nearly) all of us get distracted by websites, instant communication and social media. A heavy-handed approach would be to block them for all employees. A nudge intervention, in contrast, would install software that gives employees the option to temporarily block what they find distracting. Other nudges free up discretionary time. For example, inefficient meetings are a well-known time sink for all of us. Companies could use nudges to deal with this. They can, among other things, change defaults and replace regular project meetings with meetings that can be called only when enough points fill an agenda (see our other article for more on this). Additionally, salient reminders can be placed in meeting rooms to nudge meeting leaders to keep things short and effective.

Constant electronic notifications, reminders and other interruptions are another time and attention sink. Interruptions can increase stress and often prevent employees from engaging in what Cal Newport calls ‘deep work,’ which is the undistracted and cognitively demanding work that typically produces the most value 11. Smartly redesigning notification and communication systems can again free up cognitive resources for important work. Such nudges enable employees to do the work they want to prioritize and thus helps them remain in control and achieve their own goals.

Finally, choice architecture also includes, quite literally, architecture. Smarter office layouts with designated spaces for meetings, uninterrupted deep work spaces and giving employees more control over their physical space can free up time, attention and cognitive bandwidth and improve employee autonomy and wellbeing.

So, when done well, workplace nudging holds promise to increase employee wellbeing, and sometimes nudges also strengthen an employee's sense of autonomy and control. Transparency and democratic input can help make nudges more legitimate and reduce the risk that companies overstep boundaries or that employees feel manipulated.

Picture of Andreas T. Schmidt

Andreas T. Schmidt

Andreas T. Schmidt is an Assistant Professor of Political Philosophy at the University of Groningen in the Netherlands. He works in political theory, ethics and the philosophy of public policy, including topics such as freedom, inequality, public health, future generations, and behavioural policies. For more, see his research page: www.andreastschmidt.com

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