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Marissa Sharif: A lot of people
struggle to keep doing the same action and reach their end goal.
They kind of give up before they
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get there. And that applies to
personal goals, right, like learning a new language or
trying to get fit, as well as
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goals that are beneficial for an
organization and a goal an employee might have. And it's
important in particular in our
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context, and I'll— I can
elaborate on it a little bit later— is that streak rewards
boost commitment towards a goal.
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People feel more committed, and
commitment is especially important with things like goal
persistence.
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Welcome to <i>The Ripple Effect</i>,
the podcast that takes you on a
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journey through the minds of
Wharton faculty. I'm your host, Dan Loney, and in each episode,
we'll be diving deep into the
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inspiration behind the
groundbreaking research that Wharton professors have
conducted and exploring how
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their findings resonate with the
world today. One of the ways that
companies look to
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say thank you to employees is
through the use of financial incentives. But
do employees increase their
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efforts when the incentives are
increased in the process, thereby creating somewhat of a
streak? Marissa Sharif is an
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Associate Professor of Marketing
here at the Wharton School, and has been part of research taking
a look at this. I guess, let's
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start by taking us— what was kind
of behind the want to look at this in the first place?
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Yeah, so it was motivated by
noticing a lot of apps are using gamified rewards to try to
motivate people to do a variety
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of different actions. And one
popular one is actually rewards that encourage streaks or
encouraging people to do actions
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in a row or to do an action
every day. So for example, Duolingo is one of the companies
that does this. They try to
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encourage people to learn a
language, and so they give people rewards when they try to
study or do a lesson daily. So
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we saw that this was a common
thing that a lot of companies were doing. But we wanted to
see, is it actually effective,
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right? Is there actually
research to show this does motivate people? So that's kind
of where it started, just by
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noticing it's a common
phenomenon. Let's test if it actually is effective or not.
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And so part of this was
also whether or not people complete the work better when
there was more on the line, correct?
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Yeah. So the idea here
was kind of, we already know, there's a lot of research that
shows incentives and rewards
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motivate people, right? We know
that. And we also know that rewards can be more effective
when they're designed with
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psychology and human behavior in
mind, right? So we kind of know that from from past research.
And what we were really
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interested in here is examining
whether people persist more or complete more work tasks with a
specific type of reward
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structure, which is a reward
structure that encourages consecutive behaviors, or streak-
like behaviors. And we wanted to
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compare to see if these rewards
that encourage streaks are more effective than other rewards,
such as just a flat reward.
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Every time you do something
beneficial, you just get the same amount. So it's kind of
specifically looking at the
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streak reward structure. But that element of persistence,
I know, is an important
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component to this research as
well. Yeah, so it's important
because it's a common problem. A
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lot of people struggle to keep
doing the same action and reach their end goal. They kind of
give up before they get there.
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And that applies to personal
goals, right, like learning a new language or trying to get
fit, as well as goals that are
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beneficial for an organization
and a goal an employee might have. And it's important in
particular in our context— and
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I'll— I can elaborate on it a
little bit later— is that streak rewards boost commitment towards
a goal. People feel more
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committed. And commitment is
especially important with things like goal persistence.
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And so I guess, to a degree, if
you're having people more committed to doing projects and
doing work, that probably helps
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the company in general, to a
degree, in terms of retaining
employees. Yes, exactly. And what we find
is, like, it's specific to the
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task or the goal they're working
towards, right? So they feel more committed to reach their
goal. And so that will
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definitely be more beneficial to
the company in that they're going to probably reach that
goal sooner and/or be more
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likely to reach the goal to
begin with. So there were a variety of
different studies that you did
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to kind of collect this
research. Give us a little bit of a synopsis as to what you— how
you went about this.
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Sure. So lots of studies in the paper.
That— there's kind of one paradigm that we used in
different ways throughout, which
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is basically, we have people make
a series of choices. So they make a choice between doing a
work-like task versus doing
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something more fun. So for
example, in some studies, we have them define a series of
words. In others, we have them
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type a series of CAPTCHAs.
Things that people don't like that much versus something they
might like a little bit more.
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So, for example, watching a
short clip of a comedy show. And so we did this because we're
trying to mirror what happens in
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the real world, that we often
have choices about whether we want to engage in work right now
or do something we like better
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instead, right? So if I'm an
employee, maybe I'm doing some type of gig work. I'm delivering
a bunch of orders. I could
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choose to deliver another food
order, right? Or choose to do something else that I might like
instead. If I'm in sales, maybe
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I choose whether I want to do
another call versus do something else I like instead. So that's
the basic idea. We're looking at
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the number of times people
choose to do work rather than fun. While the financial
component, that's obviously
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important then, it sounds like
there's an element of actually completing the goal that's very
important for
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the employees as well.
- Yes. So we were looking here to see
kind of if they're willing to
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keep going towards the work or
keep going towards the goal, compared to kind of giving
in and doing something of a "want"
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behavior instead, right,
something that is immediately gratifying instead. But what we
wanted to look at in particular,
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in this paradigm, right, is, how
do the different reward structures shift people's
choices such that they choose to
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do work more often than they
choose to do kind of these should or immediately gratifying
behaviors? So we had one group
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of people, every time they chose
to do the work task, they would be paid the same amount, which
is on top of their participation
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payment. They were paid, for
example, in one study, just a three cent bonus for choosing
the work. So every time they
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chose the work, they would get
that three cent bonus. The streak condition, on the other hand,
they started actually with a
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lower payment, right? So the
first time they chose to do work, they would get one cent.
And then if the next choice, the
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next consecutive choice, they
again decided to do work, they would get two cents. If they
chose again after that to do
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work, they would get three
cents, right? So it increases their reward if they do a consecutive
choice of choosing the work, and
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if they don't do a consecutive
choice, they break their streak, they go down to a lower payment
or just don't have the ability
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to go up. We kind of varied that
throughout our paradigms. And what we found is that even
though with the stable, flat
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reward, it's a little bit more
than the streak reward in terms of payment, people end up doing
work more with the streak reward
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structure than the work reward
structure. And basically what happens in the paper is we
generalize it, we do a bunch of
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robustness checks where we
change what the tasks are, we change the payment levels to be
a little bit higher, a little
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bit lower, and we try to
disentangle it, to really show it's about encouraging people to
do consecutive actions that
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really motivates them. So that element of the streak,
does that tie into, for many
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people, our competitiveness, you
know, in the workplace or in life in general, that once we
that first taste of
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success, we want to have that
next taste along the line? Yeah, it's related to why we think it
works, which is basically— what
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we think is happening is the
streak rewards encourage commitment, or increase
commitment, because once you do
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that first task, like you said,
you don't want to miss out on the potential earnings, you get,
that increase in earnings, if you
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don't do the next task, right?
So you want to see your effort kind of reap maximum rewards. I
don't want to miss out on that
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potential increase in bonus by
not doing the next task. And there's a lot of research kind
of related to this idea that
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people don't like to see their
effort wasted. When people are reminded of their effort in
general, they feel more
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committed to that process. So
what you're speaking of is related to why we think it is
effective
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and why it boosts
commitment. So seeing what you did in this
research, how then does that
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relate back to companies in
terms of their thought process of having these types of
incentive programs?
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Yeah. So I think the
easiest conclusion here, right, is incorporating the idea of
streaks and rewards can be
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motivating to people and help
them keep persisting and do better work compared to just
these flat, basic rewards. And
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broader, right, just thinking
more about how you can incorporate ideas of psychology
and human behavior into your
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reward structures to motivate
people more in general. I guess it's also a component of,
while the finances are nice,
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it's not always the be-all end-
all to have the level of success that you want to have, you know,
from a project in the office.
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Yeah. So we find, right,
compared to rewards that are a little bit smaller, right— like,
I think there's a small
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magnitude difference here—
- Right. Right. — that streak rewards end up
being more
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effective than slightly larger
rewards. And that's because, right, we end up being more
motivated by elements related to
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human psychology and human
behavior than just the pure finances of it, right? But we
have to take caution that it's
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not going to be a huge
difference in financial payment, right? But, yeah, a little bit,
I think.
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I know you wrote in the paper,
though, that this is an important area of research right
now because of, probably, a
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variety of different factors. So
take us through—we'll finish up there—why this is so important
from a research perspective.
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Yeah. So in general, it's a
really broad problem, right? It's a broad problem. It extends
to organizations and employees,
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but it's— it's for all of us,
right, that we all struggle to persist towards our goals.
Anyone you've talked to, I'm
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sure they have an experience of,
hey, I wanted to reach this goal, but I just couldn't quite
get there. I started, but I
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didn't complete it, right? So
that, in general, is an important area. And then second,
it's thinking, hey, we have this
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great tool. We have a way to
motivate people, which is rewards. How do we make those
rewards even more
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effective for such a big, common
problem? So I think it's speaking to this important area
in that way.
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Marissa, great to talk to you
today. Thanks very much for your time. Yeah, thanks for having me.
- Thank you. Marissa Sharif,
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who is Associate Professor of
Marketing here at the Wharton
School. Thank you for listening
to <i>The Ripple Effect</i>. We hope
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