Update on Too Much Choice in Incentive Programs « I2I

It's been about two years since I first posted on the issue of too much choice in an incentive program. Back in November of 2006 I referenced the book "Paradox of Choice" by Barry Schwartz and the study by Sheena Iyengar from Columbia business school. Not much has changed since then. Most incentive companies still sell the benefits of unlimited choices. Unfortunately, that's as far as they take it. They lay the buffet of awards out in front of the participants and say – go at it!

Based on the research – this is a bad strategy. Participants will be less likely to choose something and what they choose won't make them happy. At the time I read the book I put together a white paper on how you can avoid some of the problems too much choice creates. Here's an updated link you to the white paper. Download and read how to remove the problem of too much
choice in your programs.

Still need more on choice – Barry Schwartz was a speaker at TED this year. Here's the link to his talk (approx. 20 minutes)

http://profile.typepad.com/6p01156feda260970b Pete Mitchell

Amen, Brother Hebert! But the Big Kids in our business aren’t listening. A Major Incentive Catalog player has ordered its merchandise buyers to add 5 THOUSAND items to their program so it’s “more like Amazon”.
In most programs, “more is better” seems to be the operating phrase and online programs are the worst offenders (at least printed pieces have some limits based on cost and size). Stop the madness!
http://profile.typepad.com/2of6 Paul Hebert

You’re right Pete… with print there is a limit – but online not so much. I think the online incentive catalogs miss an important point when they say “be like amazon” and that is – even amazon understands that too much is a bad thing. They help you make choices by “directing” you to choices through their use of predictive algorithms and other tools that help you limit your initial choices so you can get to a final choice. In the “old” days, incentive companies would ask a participant to create a “wish list” from the catalog and use that to help promote goal setting and performance. Still a great idea and one that would help alleviate the “too much choice” issue. Thanks for the comment!
Michael Camiolo

I think you’ve taken the results too far. You state “However, as these experiments indicate, this is a sure way to have unhappy participants in the end.”
These experiments ONLY indicate that when faced with a multitude of choice, participants are more likely to choose the null/default option.
What we as HR professionals would like to know is:
1 year after receiving award points for a catalog; are the individuals who had a large catalog happier than the individuals who had a small catalog?
Aka, in the Jelly example, we need to know the customers store satisfaction level 1 day after they shopped there.
http://profile.typepad.com/2of6 Paul Hebert

Appreciate the comments.
Actually, in the study and in the book The Paradox of Choice, the results showed that people who “satisficed” – and chose from a large selection were less happy with their ultimate choice than those that chose from a smaller selection.
I’m not saying we shouldn’t have choice – as I mention in the white paper – the issue is about managing the choice to make sure we keep our participants as happy as they can be. More options are preferable if we manage the process well. What I’m railing against is the hands off approach – just put the catalog out there and let them choose. Let’s take a more proactive approach and help them set a goal, work toward the goal and then be happy they earned what they wanted. Part of the problem of too much choice is the fact that we end up (in many instances) making no choice. This is one of the reasons you see many programs with huge balances in point accounts – people decide not to choose.
Again, the issue is in the managing of choice – not limiting it.

Update on Too Much Choice in Incentive Programs

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