Incentive programs are common in many parts of our life. They are proven to be successful in customer loyalty: to motivate us to frequent the same coffee shop, buy the same jeans, or fly on the same airline. Their use has now expanded to other areas, including personal health or job satisfaction and retention. We use them at PIPs Rewards to turn big education and career goals into smaller, do-able steps and to provide encouragement to people as they take action.

Here we will share with you some of the influences on the design and implementation of PIPs Rewards. We invite you to share your own thoughts and experiences with us and to ask questions. This is an evolving field. We will share our findings with you, and we welcome you learning with us. Please contact us at [email protected].

Behavioral economics blends insights from psychology and economics to better understand how people make decisions, including how biases, emotions and other psychological factors impact what we do. Key insights we use in PIPs Rewards from behavioral economics include the fact that people typically prefer:

• Limited choices so they don’t feel overwhelmed and it becomes harder to make a decision; 
• Smaller, immediate rewards over larger, delayed rewards, even when waiting might result in a better outcome; 
• Improving their own situation, and also knowing that their actions will have a positive impact on others.

There are many resources available on behavioral economics. To learn more about how to design choices for people to take, we recommend the book Nudge by Richard Thaler and Cass Sunstein.

Motivation theory focuses on what drives people to act and achieve certain goals. Maslow’s “hierarchy of needs” is an example of a foundational theory in this field. When people are intrinsically motivated – that is, motivated from within – people choose to do activities they find enjoyable or interesting. 

PIPs Rewards provides extrinsic incentives to support a person’s intrinsic motivation. Our app provides short-term encouragement, and identifies and rewards the completion of essential, small tasks that aid someone in accomplishing their goal. Extrinsic incentives are especially helpful when a person has small barriers in achieving their goals, such as doing something they don’t like, such as completing paperwork, or something they are uncomfortable with, such as asking for help. People who have used the PIPs Rewards app tell us they are now more comfortable and willing to do actions they had initially found hard and may have done primarily because they would earn points. To learn more about motivation theory, we recommend the book Drive by Daniel Pink, in which he discusses autonomy, mastery, and purpose as factors in motivation. These are elements we seek to build into the experience of people using our app.

Learnings from Other Sectors inform PIPs Rewards. While there has been limited adoption of incentives programs such as ours in education and career development, incentives are now commonly used in many other areas, including encouraging people to improve their health or to accomplish key activities in their jobs. From these other sectors we incorporate these learnings:

• The rewards should be personally meaningful or connected to people’s goals. Given that many of the people using our app are economically stressed, earning small financial incentives they can use to pay for food or their rent is meaningful, and may even help them to be able to stay in school. People may also find it meaningful to have rewards that will help them with their goal, such as tuition support or supplies to help them with their new job.
• Provide rewards soon after people have taken actions. We design actions that will be self-validating (such as scanning a QR code) or otherwise easily validated (such as sending in a photo or a form), so that people can quickly receive their PIPs and redeem them for rewards.
• Connect rewards to other types of recognition and social connection. We work with our partners to design incentive programs that include activities and connections beyond what people are doing on their app. We also look for ways for people in an app community to connect, including having actions that encourage connection and kindness, and providing leaderboards for shared activities that people in an app community can do together, such as walking or participating in time-based challenges.
• Recognize there are different stages on their journey to achieving a goal and these different stages need to have different incentive programs. Someone just starting to work on a goal or in a program will need more small actions to take, and more options for small rewards so they can gain a sense of progress and feel like they can be successful. Someone in the middle of their journey may need a boost, including new actions or something novel or engaging to keep them going. Someone who is almost at their goal may need support in completion, which can include narrowing the focus on their reward or helping them to be prepared to receive it. At PIPs Rewards, we design our incentive programs with our partners for stages towards a goal, adapting to the needs of the people in that stage.
• Encouragement is important, especially for people who consider themselves to be low-performing. People benefit by being told they are doing really well and are doing well compared to their peers. This can also be assisted by grouping people together who are pursuing their goals at a similar level or pace. The PIPs Rewards app can send out custom notifications to our communities that can be sent to all members or to individual members to provide encouragement. We work with our community admin leads to communicate with people in other ways as well, directly or through text or email, to tell people how well they are doing.

An example of what we have learned from other sectors is Castlight’s report at this link. It reports on best practices in employee health incentives programs. We also appreciate the advice we receive from Professor Szu-chi Huang at Stanford. You can read about her research in motivation theory and practice at this link.