Want To Change Your Team’s Behaviors? Positive Peer Pressure’s Your Best Bet.

The practice of organizations offering monetary incentives to improve employee performance has been around for quite some time. Although there is a marked improvement in performance, thanks to the incentive, the practice has been pretty ineffective in bringing about lasting changes in behavior.

Peers Change People For Good

In other words, people do work towards attaining a set target in the hopes of reaping a reward, but once they receive the reward they tend to revert to old habits. In a study published in the Harvard Business Review, Susanna Gallani studied the relationship between incentives, peer pressure and long-lasting change and found that peer pressure was a more powerful agent of change than monetary incentives.

So, although people are motivated to varying extents by cash rewards, it’s peer pressure that helps them sustain their new ways of working. Teams that hold each other accountable and develop a single-minded focus towards achieving the monetary reward, are bound to be much more effective than people individually striving towards goals and rewards.

Such an outlook helps people to not just improve their efficiency at work, but to also stick to those new found ways of working. Much like the dynamics in a group fitness class, work groups that have positive peer pressure tend to achieve more with less management; they learn how to optimize their resources to improve efficiency; and they encourage each other to stick with it.

Bigger Teams Aren’t The Only Solution

In most organizations the regular reflex is to hire new people when the business grows. It may seem like the rational thing to do, but in reality, many employees end up being under-utilized; processes become too long-winded and inefficient; and there’s no active optimization of resource utilization. Offering a monetary incentive and using positive peer pressure is a good way to improve performance without increasing the team size.

The Botanique Hotel, run by Fernanda Semler, the wife of Ricardo Semler used a points-based reward system to recognize crew members with the most impact on hotel guests. Although the money was split between the employees on the basis of the impact they had on guest satisfaction, the crew knew it didn’t make sense to increase the number of people who’d be getting a share of the pie.

Simply put, the crew went over and beyond their regular call of duty to make sure all guest needs were met by them and that the management felt no need to hire more help. They came up with innovative ways to squeeze more out of their time and resources; they collaborated on a greater level and cut down on wastages wherever they could. In other words, they were nimble self-managed teams that did everything in their power to hold onto their incentives.

Doing More With Less

As a result, the hotel has been seeing a phenomenal increase in the number of guests they receive and yet they’re managing perfectly fine without increasing their crew members. In fact, there was one time when the management engaged an external consultancy firm that worked with luxury hotels, to determine the number of employees required in each department to maintain a high level of service.

The consultancy came back with a suggestion of about 112 people. Botanique has been pleasing guests with just around 40 employees, which is a phenomenal achievement. Just imagine the impact that has on the business, expenses and results. That alone should convince you too.

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