Getting the Incentive Right

A family is on food stamps.  One of the family's main sources of income is Joe, who works at a restaurant as a line cook.  His boss is happy with his work and wants to promote him to shift manager.  With the increase in responsibility comes an increase in pay and more dependable hours.  However, the increase in pay will knock his family completely off of food stamps.  While the raise is nice, it's not enough to make up for the loss of food stamps.  Because food stamps is 'all or nothing', Joe thanks his boss for the opportunity, but decides to stay as a line cook.  That's getting the incentive wrong.

An under-resourced person completes a non-profit's financial management program.  The incentive for completing the program is a gift card to a local grocery store.  As more time passes, the person is eligible for two more gift cards for implementing the program into her financial life.  At the meeting where the client receives the gift card, the client reveals a recent social security settlement and the new vehicle she financed with the windfall.  While the nonprofit didn't know of this ahead of time, the gift card incentive seems pretty paltry compared to a new car.  That's getting the incentive wrong.

A dentist offers to donate some of her services to patients who can't afford dental care.  She sees a patient who's long overdue for dental work and estimates the patient needs thousands of dollars of dental work.  The dentist is aware of a grant program which subsidizes dentists for their donation of time and covers the costs for qualified patients.  After setting up the appointment for her qualified patient, the dentist notices the patient leaving the office with a large soda and lighting up a cigarette.  That's getting the incentive wrong.

If you want to change behavior, it's important to consider the incentive for changing the behavior.  Get the incentive right, chances are you'll change behavior.  Select a fuzzy incentive, however, and you will have a more difficult time with changing the behavior.