Behavioral Economics for Leaders: Research-Based Insights on the Weird, Irrational, and Wonderful Ways Humans Navigate the Workplace

Every leader should know the surprising research and strange conclusions of behavioral economics--for fairness, teamwork and productivity You and your colleagues don’t always make rational decisions. Sometimes that's a problem that leaders must address, and and sometimes that can be a good thing--when employees put their colleagues interests ahead of their own.  Dr. Matthias Sutter, a leading economist from Germany's world-renowned Max Planck Institute explains the latest surprising insights based on behavioral economics research. The book explains how people tick, how they react to incentives (monetary or non-monetary in nature) and what that means for working together—or against each other—at work. Dr. Sutter summarizes new and classic behavorial science research that applies the everyday business world, so leaders can improve teams and organizations, the research-based way. Find out which factors are important for professional success, from career entry to senior management. Start your career on the right footing, advance quicker, and strategize how to meet your goals Understand what’s holding your colleagues back from productivity and implement evidence-based changes Identify hidden biases in yourself and others to overcome inequalities and inefficiencies Become a better leader and decision-maker by learning to interpret people’s actions Individuals, organizations, and teams will benefit from the often-counterintuitive wisdom in this book. Based on the author’s 20 years of research—plus the findings of the world’s top behavioral economists—Behavioral Economics for Leaders can help you get your team and your organization where you want to lead it.

Table of Contents:
Acknowledgments xi Introduction: Why Do Smart People Behave Strangely? xiii Part I Behavioral Economics for Your Career 1 1 The Taller You Are, The Higher Your Salary? 3 2 The Job Interview— It’s Tougher for Women 7 3 Working from Home Is Great— But It May Hurt Your Career 11 4 Social Skills Are Worth More Now Than 10 Years Ago— Much More 15 5 Fifty Percent of People Find a New Job Through Their Social Networks— Weak Connections Matter More Than Strong Ones 19 6 When Finding a New Job, Rigidly Structuring Your Day Is a Power Move 23 7 Better “Zappa” Than “Adams”— Why Coming Later Alphabetically Gives You an Unfair Advantage 27 8 Job Hunting and Patience 31 Part II Behavioral Economics for Hiring and Retaining Talent 35 9 Startups with a Larger Share of Women Last Longer 37 10 The Unintended Positive Side Effects of Employee Referral Programs 41 11 Managers Make Systematic Hiring Mistakes— Machines Can Help 45 12 Why Employers Prefer Employees Who Don’t Job Hop 49 13 Look for Candidates Who Demonstrate Patience and Long- Term Thinking 53 14 Unintended Negative Consequences of Salary Transparency 57 Part III Behavioral Economics for Managers: Teamwork, Motivation, and Productivity 61 15 Prejudiced Managers Hurt Employee Productivity— More by Neglect and Lack of Engagement Than Active Discrimination 63 16 When It’s Hot Outside, People Are More Risk Averse and Make Worse Decisions 67 17 Managers with Good People Management Skills Increase Employee Satisfaction and Reduce Turnover 71 18 Can You Trust Your Bankers? The Finance Industry Attracts Less- Trustworthy People 75 19 Peer Pressure Productivity: Employees Are Influenced by the Productivity of Others Around Them 79 20 Employees Who Don’t Support the Company Mission Are 50% Less Productive Employees 83 21 The More Collaborative Your Team Members, the More Fish You Will Catch 87 22 Empowering Employees Saves Lives: The Co- Determination Bonus 91 23 Good Leaders Model the Behavior They Want to See in Others— and Employees Imitate It 95 24 Selfish Leaders End Up with Selfish Followers 99 Part IV Behavioral Economic Research on Gender Differences and Unequal Pay: Women Are More Risk Averse (and Men Overestimate Themselves) 103 25 An Argument for Gender Quotas in Employment: They Can Help Attract Highly Qualified Women 105 26 The More Competitive Your Attitude, the Higher Your Lifetime Earnings 109 27 Willingness to Compete Starts by Early Childhood: The Pivotal Role of the Family 113 28 Cultural Conditioning Helps Explain Differing Male and Female Attitudes Toward Competition 117 29 A “Nudge” for Reducing the Male/Female Wage Gap 121 30 Women Leaders Earn More and Revenue per Employee Goes Up When Women Are on the Board 125 Part V the Economic Benefits of Fairness and Trust 129 31 Trust Is an Economic Asset; Lack of Trust Is Expensive 131 32 A Little Accountability Goes a Long Way: Trust Works Best When Monitoring Is Possible but Not Used 135 33 Why It’s Important to Explain Difficult Employee Decisions: Treating One Employee Unfairly Hurts Everyone’s Productivity 139 34 Communicating Good Intentions Gets You a Better Outcome 143 Part VI Salary and Bonuses 147 35 Paying People More Doesn’t Mean They’ll Make Better Decisions 149 36 Team Bonuses Motivate Employees to Work Harder— and to Help Each Other More 153 37 Nobody Wants to Be Below Average; How Performance Bonuses Can Hurt Productivity and Job Satisfaction 157 38 The Limits of Homo Economicus: Employees Underperform If Their Performance- Based Bonus Hurts Their Colleagues’ Bonus 161 39 Wall Street Bonuses Incentivize Unhealthy Risk Taking— and Increase Systemic Risk 165 40 Don’t Incentivize Employees to Sabotage Colleagues: The Problems with Relative Performance Bonuses 169 Part VII Ethics in Companies and on the Markets 173 41 Markets Hurt Morality: Government Intervention Can Help 175 42 Unethical Behavior Rises and Falls with Incentives— Make It Hard for People to Get Rich Doing the Wrong Thing 179 43 Small- Scale Cheating Can Lead to Major Corruption: Leaders Should Not Tolerate Minor Ethical Violations 183 44 People Care More About the Environment When They Know Their Organization Cares Too 187 45 The Stunted Career Path of Whistleblowers: Employees View Them As Disloyal 191 46 A Bad Corporate Culture Can Turn Honest People into Liars 195 Part VIII Leadership and the C- Suite 199 47 Visionary Leaders Outperform Operations- Oriented Leaders Over the Long Term 201 48 The Four Traits That Set CEOs Apart from Other Managers: Strategic Thinking, Charisma, Intellectual/Social Skills, and Focus on Results 205 49 Leaders Who Focus on Short- Term Results Innovate Less and Lower Company ROI 209 50 Charismatic Leaders Inspire Their People to Deliver Better Results 213 Appendix: All Takeaways—for Impatient Readers 217 Source Materials 227 About the Author 233 Index 235

About the Author :
MATTHIAS SUTTER is a behavioral economist. He has been the Director of the Max Planck Institute for Research on Collective Goods in Bonn since 2017. He is also Professor of Experimental Economic Research at the Universities of Cologne and Innsbruck.