Crowding-In Motivation for Lasting Impact

Crowding-in Motivation for Lasting Impact

Crowding-in motivation for lasting impact

At Whistle Rewards, we take a unique approach to incenting behavior change. Rather than simply “paying people extra to do their jobs”, our programs are carefully designed to foster intrinsic motivation and long-term habit formation. Central to our philosophy is the concept of the “crowd-in effect” – the idea that, when used strategically, incentives can enhance an individual’s inherent drive and interest.

Numerous studies have demonstrated the power of well-designed incentives to boost motivation. For example, a meta-analysis by Cerasoli et al. (2014) found that intrinsic motivation and incentives jointly predict performance, with incentives having an especially strong impact on quantitative metrics.[1] Another study by Lacetera et al. (2012) showed that economic rewards can spur prosocial behavior like blood donation without undermining altruistic motives.[2]

This crowd-in effect has been successfully harnessed by innovative companies across industries. Virgin Group, for instance, famously used a “Gamification” program with leaderboards and prizes to encourage employee engagement in its sustainability initiatives, leading to a 44% increase in low-carbon behaviors.[3] Similarly, Disney implemented a token economy system to reinforce safety habits among its park employees, reducing accidents by 17%.[4] In healthcare, a study by Volpp et al. (2009) found that a lottery-based incentive program tripled smoking cessation rates compared to a control group.[5]

Well-designed incentive programs can facilitate the internalization of new behaviors. By consistently rewarding a target activity, incentives can help individuals form positive associations and build a sense of identity around the behavior.[8] The crowd-in effect leverages positive reinforcement to create a feedback loop that strengthens intrinsic motivation over time. When users receive rewards that affirm their competence and autonomy, they are more likely to view the activity as inherently enjoyable and worthwhile. This positive feedback loop is critical for habituation, as it gradually shifts the user’s focus from the extrinsic rewards to the intrinsic satisfaction derived from the activity itself. As the habit strengthens and starts to feel more natural, intrinsic motivation rises. Research by Gagné and Deci (2005) supports this, indicating that when individuals feel competent and autonomous, their intrinsic motivation is significantly enhanced, leading to long-term behavioral change.

Duolingo, the language learning app, employs the crowd-in effect through its gamified reward system. Users earn points and receive encouragement for completing lessons. While earning rewards, users tend to develop descriptions of themselves as a “person who learns a new language”, which enhances their intrinsic motivation. The app’s design supports users’ sense of progress and achievement, leading to sustained engagement and language acquisition.

The key to success is calibrating incentives to complement rather than compete with intrinsic motivation.

Overly controlling rewards can lead to the opposite of the crowd-in effect – the well-documented phenomenon of motivation “crowding out” once incentives are removed.[10] That’s why Whistle Rewards takes a nuanced, evidence-based approach.

Our programs use a mix of financial and non-financial incentives, always clearly linked to the target behaviors. The incentive schedules are designed to drive repetition and habit formation. Participants feel positively reinforced, but never coerced. We also heavily emphasize participant autonomy, competence, and purpose – the three key drivers of intrinsic motivation identified by self-determination theory.[11]

At a recent Whistle construction client, initially workers completed safety logs for small rewards. They witnessed an increase in safety log compliance of 260% within 30 days with rewards as small as a cup of coffee ($5). Over time, seeing the natural benefits of the behavior – fewer friends and colleagues hurt in preventable accidents, smoother running projects, and a personal association with those results leads to continued effort based on intrinsic motivation. People even do a higher quality job when they see the real impact of their behavior.[12] But without the initial small extrinsic boosters, they would never have done the behavior long enough to see the natural benefits play out.

By harnessing the crowd-in effect, Whistle Rewards produces motivation that lasts. Participants don’t just chase incentives – they develop new capabilities and identities. Habits forged through repetition and reinforcement persist even after the formal program ends.

If your organization is seeking a more effective way to drive lasting behavior change, consider how you might redesign your incentives. By skillfully combining extrinsic rewards and intrinsic motivation, you can unlock the full potential of your people. At Whistle Rewards, we’ve seen firsthand how this innovative approach produces real, enduring results.

Group of trophies reducing in size

References

  1. Cerasoli, C. P., Nicklin, J. M., & Ford, M. T. (2014). Intrinsic motivation and extrinsic incentives jointly predict performance: A 40-year meta-analysis. Psychological Bulletin, 140(4), 980–1008.
  2. Lacetera, N., Macis, M., & Slonim, R. (2012). Will there be blood? Incentives and displacement effects in pro-social behavior. American Economic Journal: Economic Policy, 4(1), 186-223.
  3. Robb, A. (2015, April 15). How Virgin Uses Gamification To Motivate Employees. Fast Company. https://www.fastcompany.com/3045018/how-virgin-uses-gamification-to-motivate-employees 
  4. Smith, B. (2012). Disney Uses Token Economy to Reduce Injuries. EHS Today. https://www.ehstoday.com/safety/article/21915753/disney-uses-token-economy-to-reduce-injuries
  5. Volpp, K. G., Troxel, A. B., Pauly, M. V., Glick, H. A., Puig, A., Asch, D. A., … & Audrain-McGovern, J. (2009). A randomized, controlled trial of financial incentives for smoking cessation. New England Journal of Medicine, 360(7), 699-709.
  6. Deci, E. L., Koestner, R., & Ryan, R. M. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychological Bulletin, 125(6), 627–668. 
  7. Gneezy, U., Meier, S., & Rey-Biel, P. (2011). When and why incentives (don’t) work to modify behavior. Journal of Economic Perspectives, 25(4), 191-210.
  8. Woolley, K., & Fishbach, A. (2018). It’s about time: Earlier rewards increase intrinsic motivation. Journal of Personality and Social Psychology, 114(6), 877–890. 
  9. Michaels, J. W. (1977). Classroom reward structures and academic performance. Review of Educational Research, 47(1), 87–98.
  10. Deci, E. L., Koestner, R., & Ryan, R. M. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychological Bulletin, 125(6), 627–668.
  11. Ryan, R. M., & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist, 55(1), 68–78.
  12. Frey, B.S. and Jegen, R. (2001) Motivation Crowding Theory. Journal of Economic Surveys, 15, 589-611.
  13. Ryan, R. M. (1982). Control and information in the intrapersonal sphere: An extension of cognitive evaluation theory. Journal of Personality and Social Psychology, 43(3), 450-461.
Drew Carter

Drew Carter is CEO and Co-founder of Whistle. Drew brings a combination of executive leadership, business strategy, technical software experience and data analytics to his work. He has worked in large and small corporations, worked in industry building software products enjoyed by millions and served as a consultant helping companies better compete in the digital age. Throughout his career he has thread a keen understanding of commercial strategy with contemporary technology to deliver hundreds of millions of dollars of incremental value.

Laurel Newman, behavioral science advisor and co-founder

Laurel Newman, is a behavioral scientist who specializes in creating interventions that help companies to improve the experiences and change the behaviors of their customers and employees. Her experience as a Psychology Professor turned Organizational Applied Behavioral Scientist provides her unique insight into the variety of forces that impact people’s thoughts, feelings, and behavior.

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