Tuesday, September 17, 2013

How to use Gamification in compliance training

In this paper we explore ‘Gamification’ to address business problems, and hypothesize an example of how gamification can make code of conduct (compliance) training more engaging. Feedback from our class survey supports the notion that most employees find traditional code of conduct training to be: (1) boring, (2) unrelated to their job role, (3) unclear about the right choice, and (4) not very useful. Adoption of an effective compliance training program is paramount to establishing a culture of ethical behavior and to minimize damages in the event of failure of employees to act in compliance.
The proposed online gamified solution attempts to increase employee motivation and retention of compliance training by creation of ‘activity loops’.  Research shows that adult learners retain more of what is experienced rather than what is read or heard. Hence, we are anxious for the consumer of this material to become more engaged than they otherwise would be in their approach to the content.
We seek to incorporate ‘intrinsic’ motivation over ‘extrinsic’ motivation so that employees are motivated beyond the short term goal of completing compliance training to just satisfy corporate requirements, to a drive for more fundamental understanding of concepts that can be applied to real-life situations.  We explore ‘Maslow’s Hierarchy of Needs’ and ‘Keller’s ARCS Model’ to develop the activity loops, motivators, look and feel of platform, and question types.
For employers, gamified training creates interactive, data-rich surveys that provide several other advantages over traditional training: (1) data trending, (2) data analytics, (3) ability to customize, (4) improved accessibility, and (5) consistency.
Further, this platform design lends itself to an easy modification to meet the industry specific needs or to expand into other specific trainings like IT security, Anti-trust laws, Environmental regulations, Equal Employment Opportunity and OSHA compliance.
The term ‘Gamification’ can be defined as the use of game mechanics for non-game processes.  Games of all forms engage players in a way that keep them coming back to play over and over. Gamification tries to replicate the same engagement to solve business problems in motivation and information retention. Retention improves when the learner is interested in the content and/or the method the content is presented.  The application of gamification in the design of a compliance training program for employees will be demonstrated to increase retention and motivation better than traditional training methods. 
The Business Problem
For organizations, compliance refers to the Code of Conduct or Code of Ethics that establish an entity’s behavior and culture for business conduct.  The essence of compliance training is two-fold:  (1) it offers dialogue with employees that will translate to good business decisions in difficult situations; and (2) it provides the organization a shield should an employee/employees break the law.1
Adoption of an effective compliance training program is paramount to establishing a strong corporate culture of ethical behavior and the protection of an organization from wrongdoing.2 The implementation of a training program involving such broad subject matter is a demanding exercise.  For the business, the issue is how to efficiently and effectively engage all levels of employees among various departments in a corporate-wide training program structured to instill ethical business conduct.  The difficulty in designing an effective corporate compliance training program is that employees learn differently and retain information dissimilarly depending on the type of instruction.  This is compounded by the fact that employee participation in compliance training is often a mandatory, organizational directive.  The challenge for compliance professionals tasked with administering their organization’s training program is to motivate employee participation intrinsically, such that the knowledge derived results in actionable and implementable conduct complimentary to their job function.  The incorporation of game-based methods can lend itself well to the most popular method of compliance training for most large US companies today, online training.  The advantages of online compliance training versus classroom or instructor-led training are several:
·         Accessibility:  A vast majority of employees have either direct ownership or access to a computer in the workplace.  Putting training online makes that training accessible without the costs of sending instructors to classrooms around the world.
·         Consistency:  The message of the training curriculum can be easily replicated and the content controlled.
·         Documentation:  Tying completion of ethics training modules electronically into Human Capital Management (HCM) systems like PeopleSoft will demonstrate compliance to Federal Agencies or in defense against lawsuits.
·         Data Mining:  Most companies choose not to keep detailed metrics related to how employees demonstrate competency other than program completion.  However, online systems do allow the possibility to explore the performance of large populations on specific topics, allowing for a concentrated effort to tailor and improve organizational effectiveness on specific topics.
·         Ability to Customize:  Game-based online training in particular lends itself to customization based on job function.  Decision-tree modeling allows the training experience to be customized based on job roles or common problems.
Objectives of a Gamified Solution
In order to obtain the objectives of fostering a culture of ethical business decision-making and minimizing damages from non-compliance, the implication is that there is a cost not only in the development and deployment of an online training system, but also an opportunity cost of not deploying compliance training.   For example, Caterpillar Inc. spends annually an estimated $9M on Compliance and Risk Management.  This division maintains a global intranet-based compliance training and documentation system that is built for enterprise wide and job-specific learning in 9 different languages.  Based on a recent Iraqi government bribery case against General Electric, one can estimate that the costs of litigation and fines for a single bribery case from the Department of Justice might cost the company upwards of $35 million and cost significantly more in lost government and private contracts.
The Gamification Platform
Gamification has been demonstrated to increase motivation and learning.  In “The Multiplayer Classroom,” by Lee Sheldon, a case is presented in which a high school biology teacher, Denishia Buchanan, uses gamification to increase her class’s engagement with the intent to improve grades.  In December of 2009, before gamification, 63% of her students were passing with a ‘D’ or higher. Only 10% of the class had grades of a ‘A’ or a ‘B’. In December of 2010, after adding gamification, 98% of her students were passing with a ‘D’ or higher and 36% had a ‘A’ or a ‘B’.  Ms. Buchanan reports students in her classroom are doing three times the work as students in previous years and they are enjoying the experience without complaint.3
Gamification attempts to create activity loops to maintain interest in playing the game and coming back to play over and over again.  These activity loops contain a motivation to take an action, a method to take that action, and a trigger so when the motivation is high and a method to take the action is available, the user engages with a gamified solution. In Ms. Buchanan’s Biology class a student is able to work at their own pace and competency level by choosing which activity to do next.  When a student finishes an assignment, they are awarded experience points and virtual currency.  The experience points motivate students to start a new assignment through a feeling of achievement, while the virtual currency gives them the resources they need to be able to start a new assignment.  In the compliance training environment, an activity loop would be triggered by completion of a question, section, and module. 
Motivation and Gamification
Establishing motivation is arguably the most important objective sought when incorporating ‘gamification’ into business processes.  Support for incentivizing engagement in the workplace is compelling.  A 2012 Gallup survey indicates that engaged, motivated employees are 12% more likely to recommend their company’s product, 60% more likely to provide higher quality products, 41% less likely to be involved in a safety incident, and 27% less likely to steal than unengaged workers.4  Companies with highly engaged workforces appear to correlate with increasing operating margins.5  Engaged employees are 25-49% less likely to leave their firm6, and research shows that adult learners retain 10% of what is read, 20% of what is heard, and 80% of what is experienced.7
Largely, gamification seeks to incorporate ‘intrinsic’ motivation (the pursuit of interest or enjoyment in the task) over ‘extrinsic’ motivation (rewards or punishment).  This is especially true in the example which is illustrated herewith - delivery of code of ethics material to employees by incorporating motivating tools within a technology platform.  In this example, employees become more engaged than they otherwise would be in their approach to the content.  In doing so, employees are intrinsically motivated to move beyond short term answers to satisfy their corporate requirements, to a fundamental understanding of concepts that can be applied based upon real-life situations.
While few would argue that motivation is not a desirable goal, the question that must be addressed when attempting to ‘gamify’ a business process is how to best accomplish this objective.  Fortunately, motivation is well-researched, and some tangible frameworks exist that can be exploited in creating a new ‘gamified’ platform.
Maslow’s Hierarchy of Needs (see Figure 1) provides a foundation for much of the work studying motivation.  In Hierarchy of Needs, an individual moves upward on Maslow’s pyramid by satisfying physical deficiencies on the lower tiers, eventually striving to fulfill more complex psychological needs.  The audience for the changes to business process platforms addressed by gamification, having already satisfied lower level needs, strives for belonging, esteem, and self-actualization found at the top of the pyramid.
Figure 1.  Adapted from Wu, Michael, “Gamification 101: The Psychology of Motivation” Lithosphere blog
Keller’s ARCS theory provides a more recent methodology which addresses motivation of the upper tiers within Maslow’s pyramid, with tangible concepts which can be incorporated into the business process.  Attention, Relevance, Confidence, and Satisfaction form the key dimensions of Keller’s ARCS theory.  By (1) capturing the attention of an individual, (2) making the content specifically relevant to them, (3) providing them confidence that they have the ability to master the material, and (4) providing some reward to satisfy the individual for their time spent, an individual is motivated to engage, to become immersed, to internalize, and to re-engage in an activity at a later time.
Figure 2 below, elaborates on some concepts found within each of these key dimensions, as well as providing a few examples of how these dimensions could be manifested within a new IT platform to deliver information to business users.
Figure 2. A Gamified Interface to Compliance Training
A tangible gamified interface can be hypothesized to reach the motivation objectives outlined in Figure 2.  In this hypothetical gamified compliance training, structured question formats will be used to help the trainee respond more easily and help the firm to accumulate and summarize responses more efficiently.  Gamified training will use stories and game play to frame structured questions. For employers, gamified training creates data-rich, video guided surveys. Employers can customize the template with their questions and use it to generate real-time testing, assessment and risk analytics. This translates into measurable return on investment in the form of reduced legal and compliance risk.
For employees, gamified training helps to truly understand complex, risk sensitive business issues with the look and feel of a game. Through stories and play, employees are trained by way of the interactive experience. Gamified training will be built using decision tree structure.  A decision tree is a decision support tool that uses a tree-like graph or model of decisions and their possible consequences. The proposed training uses the decision tree which is based on the user’s answers.  A different path is taken and future questions depend on the previous answers.
The gamified training system can be customized using XSLT transformation which enables employers to change templates to reflect their corporate culture. API’s are used so that the backend system integrates with existing corporate systems.  Wizards are used to create a training questionnaire decision tree (see Figure 3).  For users the training will be made more interactive by having a variety of question types such as custom grouping questions, drag and drop questions, checkbox text selection questions, and many more. When a user selects an answer, immediate feedback is provided based on their selection. If the user selects a correct answer, they are given confirmation of a correct answer.  If a wrong answer is selected, the user is given an explanation of what makes their choice incorrect and another question on that topic is presented.
Data integration is the backbone of this approach to ‘gamifying’ compliance training.  As such, gamified training would be best utilized in a firm that targets a ‘Coordination’ or ‘Unification’ operational model, with a focus on Enterprise platforms. In the end, success of this platform over other mediums of training lies in employee engagement. Every employee who interacts with the system would have access to statistics and essentially be competing with their own past performance.
Integration with HCM databases would allow the training platform to customize the scenarios and questions to match user’s job profile. Complexity of the questions would be benchmarked with other employees in similar roles company-wide for a dynamic environment. This platform would be capable of providing statistics and performance reports that could be summarized by functional area or department.  Senior management will have access to analytics to devise an action plan to target weak subject areas.  This data could further be tapped to set targets for managers and employees on their annual goals and could be linked to a portion of a bonus program.
The gamification approach provides key metrics for data collection and trending compared to other traditional forms of compliance training like presentations, questionnaires, or instructor led sessions.
Implications of a Gamified Training Platform
Recommendations for developers include an out-of-the box software package with a customizable gamification environment for large firms with diverse organizational needs and larger implementation budgets. Software design should feature industry standards and be available for current and planned operating systems. API’s should be provided to integrate the platform with other databases in the organization.
This platform design lends itself to an easy modification to meet the industry specific needs or to expand into other specific trainings like but not limited to IT security, Anti-trust laws, Environmental regulations, Equal Employment Opportunity and OSHA compliance.
With concentration on ethics compliance training, an entertaining interface is presented to the user, resulting in increased retention to support positive behavior.  Data captured within the platform provides leadership with previously unavailable information in order to focus future efforts.   This is just one example; the number of ways that gamification can be employed are infinite, but well worth the effort to consider when developing an IT platform.  Gamification provides a powerful methodology rooted in motivation, which can be employed by leadership to address specific business problems for an ultimate return on investment.

1.  Source:  Alexandra Wrage, “How to Conduct Training for 3 Types of Employees,” Corporate Counsel, January 17, 2013.
2.  Source:  Ethics Resources Center (ERC), “A Call to Action for More Effective Promotion and Recognition of Effective Promotion and Recognition of Effective Compliance & Ethics Programs,” The Federal Sentencing Guidelines for Organizations at Twenty Years, 2012.
3.    Source: Lee Sheldon, The Multiplayer Classroom: Designing Coursework as a Game, 2011
4.  Source: Harter, Schmidt, Killham, Agrawal, Q12® Meta-Analysis: The Relationship Between Engagement at Work and Organizational Outcomes, 2009, p. 26.
5.  Source: Perspectives - The Power of Three, Taking Engagement to New Heights, Towers Watson, 2012.

6.  Source: Executive Guidance 2010: Confronting Six Enemies of Post-Recession Performance, Corporate Executive Board, 2010.

7.  Source:  LRN, How to Effectively Leverage New Technologies and Approaches to Engage Your Workforce on Ethics and Compliance, Los Angeles:  LRN, 2008.

1 comment:

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