Is it ethical to manipulate your employees' behaviour?

Almost everything in the workplace can be influenced by behavioural economics says Nesta chief exec Geoff Mulgan.

by Stephen Jones
Last Updated: 06 Jun 2019

You have two choices. The first is to spend a couple of minutes reading this article and, in the process, be automatically enrolled in a prize draw to win £5m. The second is don’t read it, but in order to opt-out you have to take time out of your busy day, log into a soporific online portal and tick a box confirming that you wish to decline.

Sadly there is no multi-million prize draw, but in all likelihood you’ll choose the former. This is the basic premise of nudge theory. 

Brought to prominence by the economists Richard Thaler and Cass Sunstein in the 2008 book Nudge, it’s the basic idea that small environmental changes or suggestions can encourage us to behave in a certain way.

The theory caught the eye of former Prime Minister David Cameron (among others) who founded the Behavioural Insights Team (BIT) in 2010 to investigate how behavioural economics could be used to influence public behaviour on anything from auto-enrolled pensions to loft insulation. In 2014, the Nudge Unit was spun-off into a joint venture between the government, its employees and the innovation charity Nesta. 

Nudge theory has become a valuable tool for governments and businesses around the world, Management Today spoke to Geoff Mulgan, Nesta's chief executive, about how behavioural economics can be used for wellbeing, the ethics of 'nudging' employees and how the theory might evolve.  

Behavioural economics has gained increasing traction. Why is that?

"Nudge is really just a branding for behavioural economics. It’s essentially relearning social psychology and proved to be a useful way of getting people, government and business, who had over-imbibed a narrow, incentive-based version of economic theory, to remember that human beings are social and suggestable.

"The reason that nudge is so popular is that it is quite light-touch and does not reduce people’s freedom. Because you’re not forcing people to do different things, just encouraging them to choose a different default, it is much more appealing than bans or rule changes." 

Is it really ethical for business or governments to be manipulating people’s behaviour?

"When BIT first launched in 2010 there was a media storm, but a lot of these methods are no more manipulative than mainstream advertising. There’s been a growing debate around how social media platforms have deliberately designed-in psychological tools to encourage particular behaviours: anything from Netflix queuing the next episode of a series to the 101 algorithms built into Facebook.

"That has correctly been criticised because it is trying to exploit human instincts and lead people into addictive, potentially harmful behaviours. It’s important to differentiate this from the nudges that BIT has employed, which are nearly always trying to encourage people to behave in ways they would retrospectively think are good for them." 

But do we have the right to be the judge of what is in people’s best interests? 

"You can’t help using behavioural economics; any supermarket that sets its aisles out in a certain order will encourage the customer to behave differently. You don’t have a choice about having no influence at all. These are very powerful tools. So personally, I prefer these devices to be transparent, accountable and guided by an ethical principle.

"That principle should be the golden rule. For any nudge intervention I would ask the people designing it: "Would you like this to be done to you?" By and large in the public sector I think that has been there. In some parts of the private sector it has been missing. I can think of many financial products that the designers definitely wouldn’t buy themselves."

So, if it’s a tool for good, can and should companies be using nudge on their employees?

"Almost everything in a workplace can be influenced by behavioural economics. I set up an organisation called Action for Happiness to develop tools that focus on employee wellbeing. We’ve developed a downloadable calendar that provides a prompt of what to do each day.

"They’re generic, science-based prompts, telling people to go outside and notice five things that are beautiful, or to take three calm breaths every hour. You are being constantly influenced by unhealthy nudges, so this is trying to encourage better ones that over time have a cumulative effect on improving wellbeing."

How do you think nudge theory will be used in the future?

"I’m pretty sure that over the next five to 10 years behavioural economics will form part of much broader intelligent approaches. We call it ‘collective intelligence’, which combines machine intelligence, sensors and data with human brains, insights and experiences on a large scale. The [online] language tool Duolingo is a good example, because it mobilises millions of volunteers to learn new languages in pairs. 

"We’re beginning to see more businesses think about how they mobilise, not just the data, but the brainpower of their staff, customers and stakeholders. In theory, businesses will be able to utilise collective intelligence for almost anything – better innovation, customer responsiveness and general problem-solving – and tap into many sources that they currently don’t."

Image credit: Photo by Magda Ehlers from Pexels


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