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Wednesday, 27 September 2017

Rewards or Punishments? What Motivates YOU

The 18th-century polymath Jeremy Bentham once wrote, “Pain and pleasure govern us in all we do, in all we say, in all we think.” Modern neuroscience strongly supports Bentham’s intuition. The brain’s limbic system, which is important for emotion and motivation, projects to the rest of the brain, influencing every aspect of our being, from our ability to learn, to the people we befriend, to the decisions we make.
Image result for managementIt is not surprising, then, that when we attempt to motivate people, we try to elicit an anticipation of pleasure by promising rewards (for example, a bonus, a promotion, positive feedback, public recognition), or we try to warn of the pain of punishment (a demotion, negative feedback, public humiliation). But what’s not always clear is: Which should we be using — the promise of carrots or the threat of sticks? And when?
A study conducted at a New York state hospital provides some answers. The goal of the study was to increase the frequency by which medical staff washed their hands, as sanitization in medical settings is extremely important for preventing the spread of disease. The medical staff is repeatedly made aware of this, and warning signs about the consequences of unsanitized hands are often placed alongside sanitization gel dispensers. Yet cameras installed to monitor every sink and hand sanitizer dispenser in the hospital’s intensive care unit revealed that only 10% of medical staff sanitized their hands before and after entering a patient’s room. This was despite the fact that the employees knew they were being recorded.

Then an intervention was introduced: An electronic board was placed in the hallway of the unit that gave employees instant feedback. Every time they washed their hands the board displayed a positive message (such as “Good job!”) and the current shift’s hand-hygiene score would go up. Compliance rates rose sharply and reached almost 90% within four weeks, a result that was replicatedin another division in the hospital.
Why did this intervention work so well? The answer provides a general lesson that goes beyond hand washing.
The brilliance of the electronic board was that, instead of using the threat of spreading disease, the common approach in this situation, the researchers chose a positive strategy. Every time a staff member washed their hands, they received immediate positive feedback. Positive feedback triggers a reward signal in the brain, reinforcing the action that caused it, and making it more likely to be repeated in the future.

But why would inconsequential positive feedback be a stronger motivator than the possibility of spreading disease? This may seem odd, but it fits well with what we know about the human brain.
Neuroscience suggests that when it comes to motivating action (for example, getting people to work longer hours or producing star reports), rewards may be more effective than punishments. And the inverse is true when trying to deter people from acting (for example, discouraging people from sharing privileged information or using the organization’s resources for private purposes) — in this case, punishments are more effective. The reason relates to the characteristics of the world we live in.
To reap rewards in life, whether it is a piece of cherry pie, a loved one, or a promotion, we usually need to act, to approach. So our brain has evolved to accommodate an environment in which often the best way to gain rewards is to take action. When we expect something good, our brain initiates a “go” signal. This signal is triggered by dopaminergic neurons deep in the mid-brain that move up through the brain to the motor cortex, which controls action.
In contrast, to avoid bad things — poison, deep waters, untrustworthy people — we usually simply need to stay put, to not reach out. So our brain has evolved to accommodate an environment in which often (though not always) the best way to not get hurt is to avoid action altogether. When we anticipate something bad, our brain triggers a “no go” signal. These signals also originate in the mid-brain and move up to the cortex, but unlike “go” signals, they inhibit action, sometimes causing us to freeze altogether. (Even in situations where real danger is imminent, the freeze response often precedes the fight-or-flight response that may follow it, like a deer in the headlights.)
Image result for managementThis asymmetry partially explains why electronic positive feedback was more successful at motivating the medical staff to wash their hands than the threat of illness to themselves and others. There are a number of other reasons too, such as social incentives, that I uncovered when researching and writing my book.
Other work demonstrates how we are biologically wired such that anticipating rewards elicits action. In an experiment led by neuroscientist Marc Guitart-Masip, which I and others collaborated on, we found that volunteers were quicker to press a button (that is, to act) when we offered them a dollar (anticipating a reward) than they were to press a button to avoid losing a dollar (anticipating punishment). However, they did a better job when they were asked not to press buttons (to not act) to avoid losing a dollar than they did when we offered them a dollar in return. In the latter case they sometimes instinctively pressed the button.
While we should be cautious translating such basic research to real-world situations, it would seem that creating positive anticipation in others (perhaps with a weekly acknowledgment of the most productive employee on the company website) may be more effective at motivating action than threatening poor performance with a demotion or pay cut. Fear and anxiety can cause us to withdraw and give up rather than take action and improve. In line with this notion, studies have shown that giving people small monetary rewards for exercising or eating healthily was more effective at changing behavior than warning of obesity and disease.

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There is another reason why warnings often have limited impact. Our researchhas shown that the brain encodes positive information (such as learning that the likelihood of obesity is lower than previously thought) better than negative information (such as learning it is higher). In fact, people often assume negative information is unrelated to them, but view positive information as very much relevant, which generates an optimistic outlook.
When we notice others making suboptimal decisions, we automatically fast forward in our heads and visualize their failure, leading us to warn them about the devastation we envision. But what the research here suggests is that we need to consciously overcome our habit of trying to scare people into action, and instead highlight the rewards that come with reaching our goals.

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Monday, 21 August 2017

Steadfast reveals record results

credit extract from ins mag

 Steadfast has announced a fourth consecutive year of growth with net profit after tax for the business up 10% for FY17.

Profit hit $66m, up 9.8% on last year, as GWP hit record levels of $5bn placed by Steadfast Network brokers, also up 9.8% on last year.

Robert Kelly, managing director and CEO of Steadfast, said that the record GWP result was thanks to “premium price increases in the last few months across our primarily Australian SME (small-to-medium enterprise) portfolio and the addition of 18 new brokers to the Network”.

Steadfast Underwriting Agencies also saw GWP rise 4% over the year as Steadfast Direct delivered a 115% boost on its GWP numbers compared with last year.


“We saw premium price improvements across our portfolio with a 3.8% increase in FY17,” Kelly continued. “The June renewal period was particularly strong, resulting in a circa 6% GWP uplift compared to the prior corresponding period.”

Kelly noted that the firm continues to invest in technology to benefit both its brokers and clients with the Steadfast Client Trading Platform now featuring five insurance classes contracted with insurer partners which is expected to see revenue increases next year.

Looking ahead, the firm provided its FY18 guidance of profit between $70m and 475m, based on premium price increases across brokers’ portfolios of 5-7%.

Steadfast is a member group of Brokers throughout  Australia and Asia

Recommended Steadfast member Broker in Perth WA Western Australia

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Tuesday, 8 August 2017

email scam more than ever warns ASIC

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 The Australian Securities and Investments Commission (ASIC) has issued a warning against scam emails purporting to be from ASIC.

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The corporate watchdog said some of its Registry customers continue to receive fake emails that appear similar to ASIC's and generally instruct recipients to click on a link or download a fake invoice. These fake emails are used by scammers to elicit payments, spread software viruses, and install spyware or malware programs for stealing personal information from ASIC customers.

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“It is always important to be wary of unsolicited emails that demand payment or contain suspicious attachments or links, especially if you have never dealt with the organisation they are from,” ASIC commissioner John Price said.

Search and compare insurance product listings against Phishing from specialty market providers here

The regulator said an email will not be from ASIC and is probably a scam if it asks the receiver:
  • to make a payment over the phone;
  • to make a payment to receive a refund;
  • to provide credit card or bank details directly by email or phone; or
  • to download software for an electronic device.
ASIC also cited the following measures for helping customers protect themselves online:
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  • keep all anti-virus, malware, and spyware protection updated;
  • avoid clicking on any suspicious links;
  • ensure that there's a firewall in place and that it's up-to-date; and
  • scan email attachments with security software before opening them – especially if they are executable (.exe) files or zip (.zip) files, as these are more likely to contain malware or ransomware viruses.

To make sure about the authenticity of an email, customers can visit the ASIC website for more information.

Anyone affected by a scam can report to the ACCC via the Scamwatch 'Report a scam' page.

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Friday, 2 June 2017

D&O who really needs it?

Lets start with the reframe
Think of "D&O" as allegation cover! 
It's not that you've done something wrong but that's going to cost a lot of time and money to ratify the accusation and that's gonna hurt ! 
The damages might only be $10,000 but the process is 
1. 200 hours of your time
2. $50,000 in legal fees 
3. The original dispute value $10,000

That's only part of the problem

As the Director your Personal assets are exposed!!!!

If you're a Director / Officer of *any Incorporated body (legal entity; Public or Private) which is subject to the corporations law then your Personal Assets are liable... find an "Asset Protector"

*Any includes, but not limited to registered Pty Ltd or Ltd, social clubs, body corporate properties, etc., 

The decision to or not too is a balance of "RM" Risk management Costs and controls, V's the convenience to outsource the risk by way of and Insurance policy. The controls (rm) vary according to the size of your company; industry exposures.

Motivation and controversy

 Directors and officers insurance is provided so that competent professionals can serve as supervisors of organizations without fear of personal financial loss. Directors are typically not managing the day-to-day operations of the organization and therefore cannot ensure that the organization will be successful; further, business is inherently risky. Thus the business judgment rule has developed to shield directors in most instances.


The personal liability of a Director and/or Officer of a Company is unlimited, whereas a Company’s liability is limited by shares or by guarantee. When a claim or allegation of wrongdoing arises, a Director’s personal assets are at risk, and it is a common misconception that a Director can expect his or her company to provide indemnity.

Directors are increasingly being held personally responsible for the management decisions made during every working day.  Claims brought against individuals can threaten both the personal wealth of individual directors & officers and the financial viability of the company in question.

Only in limited circumstances are Companies obliged to indemnify their directors for wrongful acts. Many companies’ articles of association specifically stipulate that the directors and officers will be indemnified in certain situations. This does not necessarily provide directors and officers with complete protection, as their company may not be able to indemnify them, perhaps because:
  • it has insufficient funds. Many claims made against directors are from investors and creditors and arise when the company is insolvent
  • it may not be permitted by its articles of association to do so in certain situations
  • it may be prevented from doing so in certain situations by the provisions of the Companies Acts
Even where a company can and does indemnify a director for a personal liability, who will make good the loss to the company? A D&O policy will.

The purpose of Directors & Officers Liability insurance is to provide protection to directors and officers of a company for defence costs and legal liability incurred for claims and prosecutions against them in their role in the company.  This includes the representation costs in investigations of them by regulators and other authorities.

Traditionally only larger companies have purchased D&O insurance. However the Directors of SME companies require the same protection, particularly as their responsibilities become more onerous from both increasing regulation and third party awareness of their duties.

Who can bring claims?

Allegations of wrongful acts can come from a wide range of sources. Investigations into the activities of the company could come from the Health and Safety Executive, the Inland Revenue, a regulatory body or a trade association. Employees or former colleagues could bring allegations. Customers, competitors, liquidators or auditors are other examples of parties who could have a grievance. Directors can be held accountable for the actions of others, so whilst a Director may not have committed a particular act, the actions of a subordinate can have ramifications for the Director.

The Directors’ & Officers’ Liability Policy is designed to provide financial support. It provides for defence costs for investigations, costs involved in appearing in court and legal costs to fight various forms of allegations, involving any of the Directors.

Online Brochure

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D&O can be a "stand alone" dedicated product line or incorporated into a packaged such as a "Management Liability" policy which includes related topics that would normally purchased as "stand alone" policies. The obvious benefit (apart from broader cover is a substantial price saving (bundled)

DISCLAIMER The material contained in this publication is general comment, it is not intended as advice. No reader should act or fail to act on the basis of material contained herein. 

Need a reliable Insurance broker to set you straight?

Central Insurance Brokers 
is a WA Biz Achiever Est: 1980 and
Steadfast shareholder member  

Anastasia (Tobin) Stevenson
Central Insurance Brokers, West Australia

Protect your Assets with L.I.F.E. Managers at Central 
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