Embracing Change Part 4: Incentive Nudges
As we continue our series on 'Embracing Change' and explore different types of nudges to transition from a 1:1 fleet model to a shared fleet model, today we delve into incentive nudges. These nudges harness the power of rewards and penalties to motivate behaviour, aligning individual interests with broader organisational objectives.
This piece is part of a series on ‘Embracing Change’ - navigating the transition from a 1:1 fleet model to a shared fleet model using nudges.
Understanding incentive nudges
Incentive nudges work by creating direct incentives for desired behaviours or disincentives for undesired ones. They can take various forms, from financial rewards to public recognition, and are particularly effective in encouraging participation and compliance in corporate settings.
Strategies for employing incentive nudges
- Preferred parking spots: Reserve the best parking spots at your workplace for pool vehicles. This can be a significant incentive in placeswhere parking is at a premium.
- Ride credits for personal use: Provide ride credits or vouchers for personal use of the shared vehicles during weekends or off-hours. This not only incentivises the use of the shared fleet but also integrates personal benefits with professional ones.
- Reward schemes: Develop a reward scheme that encourages the use of shared vehicles.
- Recognition programmes: Publicly recognise departments or individuals who effectively use the shared fleet, perhaps through awards or acknowledgments in company-wide meetings. This not only fosters a sense of achievement but also sets a benchmark for others in the organisation.
Example in action
Research supports the efficacy of incentive nudges in changing behaviour.
- Patagonia has a drive less program, which gives money to employees who commute by bike, carpool, or public transit and reserves the best spots in its parking lots for fuel-efficient cars.
- Salesforce promotes sustainable commuting practices among its employees through its Earthforce initiative. Employees participating in carpooling, public transit, or non-motorised commuting can earn points redeemable for various rewards.
- Walmart launched a sustainability index to nudge suppliers into improving their environmental practices. By ranking suppliers based on sustainability criteria and making the rankings public, Walmart created an incentive for suppliers to reform their practices, leading to improvements in sustainability across its supply chain.
Incentive nudging doesn’t always take the form of rewards, however. Sometimes it is about finding hidden benefits to undesirable behaviours.
For example, Bloomberg’s piece The Power of Getting Paid Not to Park at Work, highlights how free parking is a hidden expense for businesses and benefits employees who drive to work, thereby rewarding Scope 3 contributors. The article suggests that reducing or eliminating free parking could encourage more sustainable commuting habits among employees such as using public transit, biking or carpooling. When the state of California did this in 1992, vehicle travel to work fell by 12 percent.
Implementing incentive nudges
- Consider what behaviours you need to change or encourage within your organisation.
- Determine which incentives are most likely to motivate your employees, considering both their personal and professional priorities. You know your people best.
- Ensure that the incentives are aligned with your organisation’s long-term goals to maintain sustainability and effectiveness.
Incentive nudges are a powerful tool for driving change within organisations. By carefully planning and implementing these nudges, you can ensure that your transition to a shared fleet model is successful and well-received.
Join us for Part 5, where we will explore convenience nudges, making it easier for employees to adopt new behaviours through increasing ease and accessibility.