‘Social Norming’ Boosts Employee Adherence to Company Policies

People want to do what others are doing. So convince workers that most are toeing the line on policies.
Jeremy Van EkAugust 4, 2014

As the CFO, you are the chief policy enforcer for your company, the protector of the process, the crusader for compliance. It drives you nuts when people flaunt company policies.

Jeremy Van Ek

Jeremy Van Ek

Let’s say your policy is that business expenses must be submitted for reimbursement within 30 days. Your staff brings to your attention several expense reports that have recently gone through that are older than that.

Your knee-jerk reaction: fire off a nastygram to those employees, copy the department head, the management team, or maybe the whole department or even the entire company. That’ll teach ’em not to do that again. Right?

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Wrong. We’ve all sent those messages. They don’t work. Next month you have more late expenses. And so on. Ad nauseam. What is a well-meaning CFO to do?

Enter the counterintuitive concept of “social norming.” Here’s the basic idea. People are social animals. There is a conscious (or more likely, unconscious) drive to do what you perceive other people are doing. By calling attention to the bad behavior, you are making people think that bad behavior is more prevalent than they thought it was, which will make the undesirable behavior more likely in the future.

That is best illuminated by an example. There are several pioneering studies on heavy drinking at college campuses. Rather than taking the usual approach of expounding on the ill effects and consequences of heavy drinking, these campaigns took a different tack: calling attention to how many people do not engage in heavy drinking. The message to students was that heavy drinking was a lot less common than they thought.

For instance, a campaign at Northern Illinois University ran ads in the school newspaper and placed signage around campus with the headline, “Most students drink moderately,” backed up with data from a study of students showing that to be true. But perceptions differed markedly from reality: the study showed that on average, students believed that 70% of their classmates were heavy drinkers, defined as having more than five drinks when they “partied.” By the end of the campaign, only 51% thought that.

It wasn’t just perceptions that changed: the actual prevalence of heavy drinkers (self-reported) fell from 43% to 34%. That was a welcome result, as previous, traditionally oriented campaigns to reduce student drinking had been unsuccessful.

By minimizing the attention on bad behavior and focusing on positive behavior, the campaign created a reverse-peer-pressure effect. Because students saw that heavy drinking was less common than they thought, the drive to be in the majority (part of the “social norm”) actually led to fewer occurrences of heavy drinking.

The concept is not without controversy, but rather than re-hash what has been dissected in psychological literature, I want to call attention to how the concept might be useful in the field of finance. Incorporating the insights from social-norming studies, here is the approach I would take to handling the expense-policy situation mentioned above.

My message out to the company at large would be positive, focusing on reinforcing the policy. It wouldn’t be a stand-alone message, but something I would incorporate in a general update, such as at a company meeting:

The vast majority of you are doing an excellent job following our policy of submitting expenses within 30 days. For this I thank you. You are an integral part of ensuring our company financial reporting is timely and accurate. A timely financial update like this one would not be possible without everyone doing their part.

I would address the policy-challenged employees individually, preferably in an in-person conversation. Assuming that there aren’t extenuating circumstances (force majeure, if you will), the message, in essence, would be this:

Nearly everyone else who works here is aware that expenses need to be submitted within 30 days, and does not have any difficulty complying with that policy. Timely submission of expenses is essential to the accuracy of our financial reporting. Let’s discuss how we can ensure you are able to follow this policy on a go-forward basis.

I leave it for you to judge: will this approach be more or less effective than the nastygram?

Jeremy Van Ek is the CFO at TRIS3CT, a growing integrated marketing agency based in Chicago.