From sludge to nudge: rethinking HRM as a choice architect in the face of social change

In a time of significant social change, the role of Human Resource Management (HRM) in organisations is now viewed under renewed interest (Agarwal et al., 2022; Kim et al., 2022). Once seen primarily as an administrative function, HRM has grown to be a part of strategic leadership that shapes the progress of companies (Boon et al., 2018; Storey et al., 2019). HRM is now expected to deliver its conventional role of aligning people management with organisational goals, and also respond to growing demands for inclusion and wellbeing at the workplace (Guest, 2017; Offermann and Basford, 2013). This evolution has pushed HRM into balancing the competing needs of managing employee performance while advancing sustainable people-centric practices (Cooke et al., 2022; Takeuchi et al., 2022).

This heightened interest occurs because HRM policies can directly shape organisational outcomes and also how employees experience fairness, autonomy, and trust in everyday work. When HRM systems are designed without sufficient attention to behavioural effects, well intended initiatives can become burdensome or experienced as performative rather than meaningful. This is particularly salient as organisations face the emerging expectations for more flexibility at the workplace. In these instances, employee perceptions can shift quickly in response to small design changes in policies and processes.

Against this backdrop, a growing body of work within HRM literature has focused on its role as “choice architect” which exists within the domain of behavioural economics, as an agent that shapes the way people make decisions (Thaler, 2021; Thaler and Sunstein, 2009). Central to this discussion are also the concepts of “nudge” which guides people towards better choices without limiting their freedom, and “sludge” which refers to obstacles that make it harder for people to take positive action (Thaler and Sunstein, 2009). While these ideas have influenced public policy and consumer behaviour since emerging into the mainstream domain almost two decades ago (Pykett et al., 2017; Reisch and Zhao, 2017), there is potential for further exploration of how they are applied in the workplace (Houdek, 2024). This is especially pertinent as HRM teams routinely design the environments in which employees make decisions for their career growth (e.g. performance management, learning and development). In this regard, HRM is already a form of choice architect, whether consciously or not (Thaler et al., 2013).

This study is proposing choice architecture to be a mindset for HRM in adapting to evolving social landscape of work. This builds upon the opportunity to examine the underlying behavioural design of existing policies and practices to recognise how they can either empower or hinder employees (Anderson, 2024). To develop this argument, an integrative literature review (ILR) was conducted on peer-reviewed publications at the intersection of behavioural economics, organisational behaviour, and HRM. The aim is to synthesise what is known about HRM as a form of choice architecture, and the use of nudges and the presence of sludges within core practices. While existing work has begun to discuss this topic, there could be more clarity on what it means to reposition HRM functionally.

This study is anchored on the following research questions (RQ): In what ways can HRM be understood as a form of choice architecture within organisations? (RQ1), How have the concepts of nudge and sludge been applied across HRM practices? (RQ2), How can HRM be repositioned in response to evolving social expectations at work? (RQ3).

This study makes two contributions. In terms of theory, it advances emerging work by integrating how practices structure employee decisions and workplace experience. Building on this synthesis, a conceptual model that repositions HRM as an intentional behavioural designer is developed. The model adopts three interdependent dimensions namely design intentionality, ethical nudging, and active sludge reduction. In terms of practice, it offers a lens to redesign policies and improve trust level as organisations respond to social change.

The theoretical framework guiding the ILR draws on three interrelated concepts: choice architecture, nudge, and sludge (Thaler and Sunstein, 2009). This grounding is used as a lens to address the three RQs by conceptualising HRM as choice architecture (RQ1), examining how nudge and sludge are applied across HRM practices (RQ2), and informing how HRM can be repositioned in response to social change (RQ3). Originally rooted in behavioural economics, the concept of choice architecture refers to the way options are structured and presented to influence people’s decisions (Meder et al., 2018; Münscher et al., 2016). In any setting where choices are offered, the individual or group shaping that environment serves as a “choice architect” (Reijula and Hertwig, 2022; Shafir, 2013).

Within the workplace, HRM functions shape how employees interact with organisational policies and systems (Sinha and Jain, 2022). The role of HRM as the conduit between employer and employees cannot be understated, thus its agency in bridging this relationship requires meticulous implementation (Boxall, 2014; Malik, 2022). Further, these architectures are not neutral as adjustments in how options are presented can significantly affect employee experience and behaviour (Clark et al., 2014; Müller et al., 2023). Although choice architecture is already established as a theory, its application within the HRM context remains largely underexplored (McDonnell et al., 2023; Sinha and Jain, 2022). As HRM structure complex processes, there is growing interest in whether these can be developed with a greater awareness of the behavioural effects they may produce (Hecklau et al., 2016; Somarathna, 2020).

Nudge is one of the most well-known applications of behavioural science. Defined as interventions that steer people towards better decisions, nudges operate through subtle design changes (e.g. framing, defaults, simplification), rather than direct mandates or financial incentives (Thaler and Sunstein, 2009). At present, nudging in HRM includes processes such as default enrolment into pensions or pre-scheduling performance management check-ins (Afshar Jalili, 2019; Bukoye et al., 2022; Robertson-Rose, 2021). When applied thoughtfully, nudges can align employee behaviour with both individual and organisational goals (Decrinis, 2024; Peryman, 2023). In situations where uncertainty or information overload is common, nudges can make decisions easier without taking away people’s ability to choose for themselves (Decrinis, 2024; Renz et al., 2023).

Sludge does the opposite of nudge. While nudges facilitate good choices, sludges are forms of friction that obstruct them (Mills, 2023; Sunstein, 2022). Within the workplace context, this may include unnecessarily complex paperwork, unclear processes, or long delays. These are experiences that can impair employee engagement and overall trust in the long term (Searle et al., 2018; Weibel et al., 2016). In HRM, sludge can often be unintentional but create real consequences, leading to adverse effects such as reduced efficiency and demoralised employees (Houdek, 2024; Pfeffer et al., 2020). In this regard, understanding and reducing sludge are vital in the post-pandemic workplace as access to HRM support becomes more important than before (Holland et al., 2022). For HRM to be a strategic partner in the midst of such social change, they must actively identify and address sources of sludge within organisational policies and processes (Delery and Gupta, 2016; Schuler and E. Jackson, 2014).

In summary, this theoretical framework builds upon existing assertions of positioning HRM as a choice architect that navigates between nudges and sludges, and informs the conceptual framework developed in response to RQ3. These efforts allude to how HRM processes play a significant role in shaping organisational culture and performance.

This study adopts an integrative literature review (ILR) approach to synthesise diverse streams of knowledge across the literature of behavioural economics, organisational behaviour, and HRM. The ILR is suitable for developing new conceptual insights as it critically examines empirical and theoretical literature across disciplines (Torraco, 2016; Whittemore and Knafl, 2005). Given the interdisciplinary nature of this study and its applications to HRM, the ILR method allows for breadth and depth in capturing existing discourse and emerging patterns (Toronto and Remington, 2020). An ILR was selected over systematic literature review as the intent is to not pursue an exhaustive evidence aggregation within a single domain.

The objective of the ILR is to examine how the concepts within the theoretical framework are discussed and applied within theory and practice. Aligned with RQ1 – RQ3, the review aims to identify how HRM functions directly or indirectly serve as choice architecture, classify examples of nudge or sludge interventions, and propose a conceptual framework to advance the application of behavioural science. Firstly, a systematic search was conducted across three major academic databases namely Scopus, Web of Science, and Google Scholar. Scopus and Web of Science were used to provide structured coverage of literature across adjacent disciplines. Meanwhile, Google Scholar was used as a supplementary source to improve coverage of works that may not be consistently indexed across databases.

The search procedure was restricted to English language, peer-reviewed outputs, and the period of 2008–2024. The start-year (2008) was chosen to capture early scholarly work leading into Thaler and Sunstein (2009). The end-year (2024) reflects the most recent publication window captured at the time the search was conducted. To avoid excluding relevant interdisciplinary studies, subject category restrictors were not applied as a strict filter. Instead, relevance to organisational and HRM contexts was enforced through screening and full-text review. The search terms used included combinations of the following terms: “nudge”, “sludge”, “human resource management”, “choice architecture”, “organisational behaviour”, and “behavioural economics” (non-exhaustive).

To capture relevant data across the selected sources, inclusion and exclusion criteria were applied. Peer-reviewed empirical and theoretical publications (e.g. academic journal articles, books) were included when they demonstrated clear relevance to HRM or workplace interventions and behavioural economics principles. Studies were excluded when they focused solely on public policy or consumer behaviour with no workplace relevance, non-peer-reviewed or solely opinion-based (e.g. reports, blogs), or were unrelated to organisational settings. Upon applying inclusion and exclusion criteria through title and abstract screening, 65 articles were selected for full-text review. From these, 37 articles were identified as meeting the final criteria for the integrative review. The reduction from 65 to 37 occurred during full-text screening. This approach prioritised conceptual fit with the research questions over disciplinary boundaries.

To address the interdisciplinary nature of this review, each selected article was classified by discipline. Each included article was reviewed and coded across three dimensions to support consistent comparison across sources. First, the HRM function addressed in the article was recorded (e.g. recruitment, performance management, learning and development, employee relations). Second, the behavioural lens was identified (e.g. choice architecture, nudge, sludge). Third, the design mechanism emphasised in the article (e.g. defaults, framing, simplification, incentives). These codes were iteratively compared to identify recurring patterns which were consolidated into the themes reported in the Findings. The conceptual model was then derived as a synthesis that integrates the themes, with Theme 3 specifically informing the repositioning argument in RQ3.

The final corpus for the ILR, comprising articles from selected journals is provided in the  Appendix for transparency. References outside the final selection are included to support theoretical grounding rather than as part of the analysed evidence base.

The ILR conducted highlights a growing connection between behavioural science and HRM. Some HRM practices were explicitly designed with an awareness of behavioural principles while others shape behaviour implicitly without deliberate intent. The literature also shows that many HRM activities (e.g. recruitment, performance review, employee relations) are increasingly being analysed using the concepts of nudge and sludge. These behavioural features have significant implications for individual employee outcomes (e.g. engagement, motivation, commitment) as well as broader organisational performance. This convergence also informs RQ3 by indicating that HRM needs to be repositioned as intentional behavioural designer.

Several studies emphasise the underlying behavioural influence embedded within HRM systems. As architect, HRM holds a larger potential beyond its immediate application on compensation and benefits to extend to other adjacencies including recruitment, talent management, and organisational design (Aguinis et al., 2022; Dash, 2021). This assertion is further supported by the literature through parallels on how behavioural science has helped other disciplines such as marketing and governance.

Conceptually, functioning as a choice architect means shaping the environment through the design of rules and interfaces where employees make decisions (Thaler and Sunstein, 2009). In HRM, this occurs through systemic mechanisms such as defaults (e.g. automatic enrolment, standardised options), framing (e.g. policy wording), incentives (e.g. reward structures), and administrative simplification (e.g. documentation steps). These features influence behaviour even when no explicit intervention is intended. This distinguishes HRM from other actors as it scales choice environments across employee groups instead of only shaping behaviour through managerial discretion. These design mechanisms can be embedded across HRM practices in shaping employee decisions through how options are structured, communicated, and accessed (Bednall and Sanders, 2017; Cantarelli et al., 2020).

Existing case studies of how behavioural science helps organisations via HRM enhancements can inspire other organisations to emulate, although contextualisation is key to ensure appropriate application and not an ineffective one-size-fits-all approach. The successful adoption of behavioural science across other functions, as demonstrated across the literature, needs to also be done mindfully as internal and external stakeholders may vary. Across the reviewed studies, there is convergence on how HRM can influence system design. One key tension concerns whether such influence is treated as intentional capability or emerge through legacy processes.

Building on Theme 1, the literature also highlights how nudge and sludge operate across specific HRM practices. While the opportunities for nudges are vast, there are calls for the identification of concurrent sludges that are impairing performance and causing value leakage that is unseen (Pfeffer et al., 2020; Soman, 2021). This can come in the form of poorly structured practices that impair worker motivation and performance (Fitzsimmons and Stamper, 2014; Gill, 2018). For instance, unclear promotion systems or outdated documentation practices can exhaust employees, and ultimately discourage engagement (Guenter et al., 2014; Romaine, 2014). Therefore, HRM must be ethical when shaping employee choices to make sure decisions are fair to employees of different backgrounds and perspectives (Selinger and Whyte, 2010), echoing concerns on inclusion in policy design.

These aspects are critical given the trust that is built between employees and the organisations with HRM as the intermediary. This bridging role highlights the importance of deep organisational knowledge in HRM design and raises questions about relying too heavily on external consultants. Without a strong understanding of the company’s culture and context, interventions may miss the mark subsequently making investments ineffective and long-term impact unlikely.

The ILR also reveals a degree of openness among organisations to consider redesigning choice architectures to nudge employees, but implementation must be evidenced with data to ensure consistency and success (Arora and Suri, 2020; Gaurav, 2021). Within the dimension of performance management, where bias can be prevalent, debiasing interventions (e.g. blind performance review or recruitment) can help to address any potential for unfairness to take place (Cantarelli et al., 2020; Nagtegaal et al., 2020). This observation highlights how inherent personality or emotional traits (e.g. bias, envy, jealousy) could shape how decisions are made at the workplace, hence the role of HRM to mitigate adverse outcomes arising from it.

In the context of employee learning and development, the way formal and informal learning opportunities are structured shows how HRM plays a key role in shaping decisions (Battaglio, 2020; Bednall and Sanders, 2017). The literature highlights that learning and development must be continuous and integrated into the overall employee journey instead of treated in isolation. This is to ensure they align seamlessly with the wider goals of the organisation. Often, training is seen as a separate activity that employees undertake with limited opportunity for immediate application back in the workplace. A best practice is the use of learning pathways that are tied to role progression and career planning. An organisation might embed short skills-based modules within the workflow of employees, accompanied by manager-led coaching sessions and real-time application. Similarly, when designing diversity and inclusion interventions, an ecosystem view is required (i.e. situational analysis, manager training, organisational transparency) to increase the chance for success. These activities surface real opportunities for strategic nudges to be introduced and monitored closely (O’Meara et al., 2020; Roberson et al., 2020).

Conversely, the literature also indicates how sludge is evident in bureaucratic processes such as slow reimbursement and unclear grievance mechanisms which can diminish employee trust (Afrahi et al., 2022; Rastogi et al., 2018; Sunstein, 2022). These delays are being addressed increasingly at the workplace, especially with the introduction of automation or artificial intelligence (AI). However, it can be argued that new technology adoption in HRM can also end up only as a high-level discourse with practical implementation proving more complex and difficult in practice. The literature also raises ethical concerns about the use of “intentional sludge” whereby deliberate barriers are introduced to influence behaviours in ways that benefit the company but disadvantage employees (Uzunca and Kas, 2023). One example from the gig economy is the design of platforms that make it easy for workers to accept jobs but harder to decline. This may push workers toward overworking, which will increase productivity but harm wellbeing.

The concurrent existence of nudge opportunities and sludge factors calls for HRM to run comprehensive and periodic situational analysis to assess how the organisation is reacting to service efficiency. One tool indicated in the literature is the sludge audit (Sunstein, 2022) whereby organisations systematically review processes and policies to identify unnecessary frictions that hinder employee decision-making or reduce productivity. This may involve evaluating administrative procedures to determine whether obstacles are justifiable or should be redesigned for greater efficiency.

The final theme centres on the strategic repositioning of HRM as a behavioural designer of the workplace experience (Dhar, 2015; Ma Prieto and Pilar Pérez-Santana, 2014; Pellegrini et al., 2018).

In this role, HRM goes beyond managing policies and actively shape how employees think, feel, and act. This is achieved by designing environments and systems that influence behaviour intentionally. This shift can be a significant ask of HRM practitioners who might be attached to legacy practices, or those who are comfortable with how stable existing processes already are. In conducting employee engagement, for example, the literature highlights how engagement strategies have often been unclear due to lack of coherent planning and implementation (Purcell, 2014; Saks, 2022). Embedding behavioural science into HRM can help overcome these limitations by offering an evidence-based link between policy design and employee motivation (Andreeva and Sergeeva, 2016; Ozkeser, 2019; Rusu and Avasilcai, 2014). These suggestions demand HRM to be more collaborative and consolidate better with other functions to ensure groupwide effectiveness.

The literature advocates for a continuous rethinking of HRM where intentional behavioural design (Rossi, 2021) becomes a core competency among its practitioners and teams (Anderson, 2024; Dash, 2021; Sinha and Jain, 2022). This includes the embedding of beneficial nudges to improve workplace efficiency and employee wellbeing (Cantarelli et al., 2020; Maloney and McCarthy, 2017). The key enabler here is, however, the competency and capacity of HRM to adopt behavioural design as a priority and effectively put it into practice. The literature also highlights that HRM’s behavioural design plays a key role in creating long-term value, emphasising that the use of nudges must be aligned with organisational ethics (Decrinis, 2024; Friedland et al., 2023). While these assertions are made with the strong grounding of academic research, it needs to be acknowledged how application within diverse organisations require careful planning. The prevailing culture of different working contexts might react differently to any introduction of new policies. This raises the consideration of piloting interventions first to ensure proper experimentation and scaling up is done without abruptly shocking the workforce.

The findings from the ILR highlight a crucial insight. In organisations, HRM can be positioned beyond a procedural function to shape a behavioural environment (Thaler and Sunstein, 2009). From the literature review and thematic analysis conducted, three interrelated themes emerge.

First, the review surfaces how HRM implicitly acts as a form of choice architecture (Sinha and Jain, 2022; Thaler and Sunstein, 2009). The way key HRM policies such as performance review, staff promotion, and training are conducted can influence how employees interpret options and make decisions. This behavioural impact may not be intentional, but it shapes the experiences of employees including motivation and inclusion. What is seen as a routine procedure can set the behavioural dynamics of organisations. This reinforces recent calls within strategic HRM research to avoid treating HRM as a siloed administrative function and instead recognise its integrative role in shaping behaviours through system design and governance (Cooke et al., 2022; Storey et al., 2019). In performance reviews for example, this can come in the way focus is shifted on development instead of ratings to encourage employees to stay motivated and take ownership of their progress (McDonnell et al., 2023; Soman, 2021).

Second, applying the concepts of nudge and sludge across practices (RQ2) makes the behavioural consequences of HRM design more visible (Houdek, 2024; Sunstein, 2022). Nudges can foster stronger employee engagement while sludges hold the risk of eroding employee motivation. It is therefore imperative for management to be aware of these unseen risks before it is too late. At the same time, sludges often go undetected because they are embedded in legacy practices that are rarely questioned. This observation can only be addressed with the right leader willing to make impactful long-term change. It also calls for sharper diagnostics within HRM systems that are continuously improved over time, and not temporary initiatives that are introduced only for show. A company that requires employees to navigate a lengthy process to utilise training funds may unintentionally discourage upskilling which harms both employee growth and organisational agility.

Third, the review conducted has signalled that these behavioural effects are not entirely incidental but can be strategically designed (Soman, 2021; Sunstein, 2022). HRM systems can either be left to evolve by habit or deliberately structured with ethical intent for the overall benefit of the wider workforce. This means that HRM leaders must be aware of moments when their decisions favour speed and control at the expense of fairness. This is where intentionality matters. It is learned from the ILR how not all nudges are ethical, and not all sludges are accidental. The future of HRM lies in being more conscious of how it designs policies not only for outcomes, but also employee experience. For example, a remote work policy should not only consider productivity targets, but also how it affects employees’ sense of autonomy. This dual focus ensures that employee experiences are both productive and human centred (Sunstein, 2022; Thaler, 2021).

Building upon these themes, and as illustrated in Figure 1, this study is proposing a conceptual model that reframes HRM as a form of choice architecture. It situates HRM at the intersection of three interdependent design elements: intentionality, nudge use, and sludge reduction. Rather than treating these aspects as separate endeavours, the model emphasises continuous and mutual reinforcement. Thoughtfully designed HRM practices can create the foundation for timely nudges to be embedded into the employee experience. At the same time, sludge can be removed by removing unnecessary friction, delay, or ambiguity to ensure that concurrent nudges can be effective. The central argument is that HRM becomes a meaningful choice architecture only when these three elements are aligned. Nudges without intentional design pose the risk of being ineffective when implemented. At the same time, sludge reduction without insight into behavioural reactions may improve efficiency but miss opportunities for motivation. Therefore, the intersection of all three represents the most promising potential for HRM to respond to shifting workplace expectations (Houdek, 2024; Sunstein, 2022; Thaler and Sunstein, 2009).

The theoretical contribution of this study is presented across four parts: integration of literature, specification of mechanisms, system-level nudge/sludge framing, and a boundary condition centred on ethics.

This paper advances emerging work by integrating behavioural economics concepts with strategic HRM systems. While choice architecture highlights how the design of options shapes decisions (Münscher, 2024; Thaler, 2021), HRM scholarship emphasises that outcomes depend on how architectures are designed and implemented (Gaurav, 2021; Sparrow and Makram, 2015). Bringing these lenses together, the review clarifies how HRM influences behaviour through practices and design that shape what is salient, easy, or burdensome at work (Bukoye et al., 2022; Sinha and Jain, 2022).

A second theoretical contribution is to specify the mechanisms where HRM functions as choice architecture. Across the reviewed literature, behavioural influence is embedded in system-level design mechanisms (Robertson-Rose, 2021; Thaler and Sunstein, 2009). These mechanisms operate through HRM processes and shape perceived fairness when no explicit intervention is intended (Anderson, 2024; Dash, 2021). This explains why employee experience outcomes can persist even when HRM practices appear well intentioned. Behavioural effects accumulate through repeated exposure to the broader HRM system architecture (Afshar Jalili, 2019; Datta et al., 2023; Müller et al., 2023).

Third, the review extends work on nudge and sludge by repositioning them as attributes of HRM systems rather than isolated tools. Nudges are typically situated as subtle changes that steer decisions without coercion (Friedland et al., 2023; Renz et al., 2023), while sludges represent frictions that deter action (Mills, 2023; Sunstein, 2022). Evidence in the reviewed literature indicates that nudges can become symbolic if they are introduced without governance and attention to unintended consequences (Decrinis, 2024; Nwafor et al., 2021). Similarly, sludge can be unintentional yet harmful, particularly where administrative burdens reduce access (Sunstein, 2022). The proposed model advances theory by shifting the emphasis from adopting behavioural tools to designing HRM architectures in which nudging and sludge reduction are integrated.

Finally, the model introduces a boundary condition that is centred on ethics. Behavioural design can be experienced as enabling or manipulative depending on intent and transparency (Paunov et al., 2019; Rozeboom, 2023). Trust is therefore a consequence of how HRM choice environments are experienced (Bissola and Imperatori, 2014; Vanhala and Ritala, 2016). With the model’s three interdependent dimensions, there is a structured basis for future theory building. Specifically, when HRM choice architecture enhances employee experience and organisational effectiveness, and when it undermines credibility.

In terms of practical impact, the model translates into specific actions across HRM practices. In recruitment and onboarding, HRM can review defaults and friction points that shape access and progression (e.g. how options are presented, how many steps are required). This is followed by simplification and standardisation, when necessary, while making criteria clear and transparent. In learning and development, access can be redesigned so that opportunities are easier to discover and take up (e.g. reducing administrative burden around approvals, and claims). In performance management, framing can be examined in the way feedback and ratings are communicated. Sludge can be reduced in appeals or grievances where friction creates perceptions of unfairness. In designing rewards, incentives could be tested for behavioural effects, with careful attention to transparency. Across all functions, a practical starting point is to prioritise high impact employee journeys and run periodic sludge audits to remove avoidable burdens.

To operationalise these suggestions, HRM teams can assess governance processes through policy reviews or employee journey redesign. This can shift behavioural design from reactive initiatives to ongoing capability to ensure ethical nudging and sludge reduction are sustained. Table 1 illustrates how the proposed model can translate into practices across core HRM functions.

The limitation of this study is that it is conceptual in nature. As an integrative review, the synthesis is interpretive and aims to support framework development rather than provide exhaustive coverage. Therefore, future research can extend this framework empirically by testing how combinations of the three elements interact in real world settings. This can come in applications through small pilot studies. Further, comparative studies across organisational types, industries, or regional cultures may further reveal how context mediates behavioural outcomes.²

This integrative review synthesises how HRM functions as a system of choice architecture and how nudge and sludge mechanisms operate across practice. This culminates into a conceptual model that repositions HRM as an intentional behavioural designer. Ultimately, as organisations face increasing social expectations, the challenge for HRM is to keep pace and shape the future of work by design.

Microsoft Copilot was used in editing this manuscript.