Why Some Behavioral Changes Stick While Others Turn Stale

Business travel programs are focused increasingly on traveler satisfaction and employee engagement. Gone are the days when programs were governed by the tightening of policies without regard for their effect on employees. Favorable travel programs are used as perks and tools to increase talent retention.

In order to continue cutting costs, increasing compliance, and meeting other goals under this new paradigm, many travel managers are turning to rewards programs as a way of motivating positive behavior. Unfortunately, not all rewards programs are created equal, and employees don’t always respond as expected. As a result, travel managers do not see the return on their investment of time and effort.   

At Rocketrip, we define ourselves as a company focused on behavioral change. We know that interventions such as rewards programs are more successful when employees perceive the return on their behavioral investment as valuable. Value in this sense isn’t only monetary. As we’ll explore in this post, the time between behavior and reward also plays a significant role.

How Time Discounting Lowers the Value of A Reward

From behavioral economics, we know that the value placed on a reward is related to the time one waits between earning and actually getting to enjoy that reward. This phenomenon is called time discounting or temporal discounting. Researchers have found that most people will discount (i.e., assign a lower value to) a future experience. Conversely, they raise (i.e., increase the value of) a present experience. Waiting time is so critical that people assign lower values for delayed rewards – even though the delayed reward might be worth a lot more than the immediate one.

Nearly everyone is familiar with time discounting from their everyday lives. This is the feeling of having a large work assignment that will likely lead to a promotion and a raise at the end of the year. Even when this likelihood is quite high, a surprising number of people neglect to go the extra mile and secure their position. They place a higher value on a smaller, immediate reward, such as taking an extra coffee break or completing an easier task.

Researchers have demonstrated the effect of time discounting in many experiments. For instance, subjects in one study found an immediate payment of $68 was just as attractive as a $100 payment that comes twelve months in the future — a 33% devaluation for the delay. 

That same study shows that this phenomenon takes effect quicker than one might expect. A delay of only one to two days led subjects to significantly devalue rewards. In fact, the difference between the value of an immediate reward and a slight delay was significantly greater than the difference between a slight delay and a more extreme delay. In other words, the mere fact of a delay matters more than how long that delay is.

How Travel Programs Can Increase Perceived Value of Employee Rewards

Travel managers might use rewards programs to drive a number of goals: Online booking tool compliance, cost control, and shortened time to expense submission are just a few examples. As the research demonstrates, employees who receive more immediate rewards will value them higher and therefore be more likely to manifest the desired behaviors.

For a successful rewards program, success being defined as driving one or more desired behaviors, travel managers should take a two-pronged approach. Both halves of the strategy revolve around delivering employees a net positive value for their actions.

Step one is lowering the barriers to performing desired behaviors. The fewer steps an employee must take, the less they have to work or go outside their comfort zone, the less value they will have to receive back in order to feel that this action was worth their effort.

Step two, of course, is to return as much value as possible to those employees. Neither of these steps should be surprising to most people reading this post. The idea that people take low effort, high reward actions is intuitive. What fewer people automatically understand is the role that time discounting plays in value.

The Travel Manager’s Challenge: Maximize Results From Rewards

Traditionally, companies relied on one of two options: accepting high costs as part of the price of retaining good employees or implementing restrictive policies that foster resentment, low morale, and even higher turnover.

Implementing a reward program to motivate employees offers a third path. Now the challenge for travel managers is to design a program to maximize employee buy-in and cooperation. When employees receive rewards immediately upon completing a trip, they’re more likely to make the connection between choices and rewards. Moreover, their wise decisions will be reinforced. They’ll be encouraged to make similar choices in the future.

Instant Response Is the New Normal

Time discounting has become more pronounced today than ever before. We live in a world where people choose systems that give them instant responses to their actions.

Therefore, when systems that create a gap between earning a reward and actually owning that reward cause employees to devalue the reward. Travel managers will gain maximum value from a reward system that allows employees to gain immediate access to their rewards, without jumping through hoops or waiting for an arbitrary time frame.

It’s important to recognize that time discounting has been well-established as a source of discontent and devaluation of rewards. Efforts to ignore time discounting will most likely result in lower motivation, as employees no longer find rewards valuable and meaningful. By understanding the factors behind rewards and choices, you can motivate employees to make desired choices that support the organization and continue to reduce travel costs.