Paying your employees to get healthier can get results, and it’s worth the investment. When employers offer incentives, for example, employee participation in health/wellness programs often increases significantly. So it’s no surprise that incentivized wellness programs are becoming more popular each year, with some estimating that as many as 70 percent of large employers are currently offering financial incentives with their wellness program.
The question remains, however, which incentive strategies are right for your organization — and which aren’t. Below are some considerations for employers looking to implement an effective health management and wellness incentive strategy.
The carrot, or the stick? As mentioned above, incentives can be effective in shaping certain health behaviors. Both rewards (“carrots”) and penalties (“sticks”) have been demonstrated to be effective in certain situations. Behavioral economics research suggests that loss aversion may provide greater motivation to change for participants than a positive gain of similar value; however, one must balance that potential gain with the type of incentive that would fit best in an employer’s culture. One must also carefully weigh the risks a “stick” may pose to the program from an employee and public perception perspective.
Make the task clear and offer an incentive that is proportional to the task. Smaller and simple incentives tend to work best for one-time tasks such as taking a health assessment (HA) or getting a health screening. These are single, standalone actions. Incentives successful at helping employees with ongoing, sustained behavior change — such as with completion of a multi-session behavior change program or the achievement of a health outcome — require higher value incentives and more sophisticated, periodic delivery to be effective.
Award incentives early and often for multiple actions or more difficult tasks. When incentives work for promoting longer-term behavior change, it’s usually because individuals are awarded immediately and frequently — for example at the start of the program, halfway through, and again at program completion. Individuals will tend to discount the value of the incentive if they perceive it to be too far in the future.
Get the word out loud and clear. Strongly communicating your incentive strategy to employees is key. Regarding HA completion, for example, one study demonstrated that strong communication could increase participation in an HA by as much as 25 percent, given the same type (non-cash, cash, or benefit integrated incentive) and denomination of incentive.
Leverage the “fun” factor. Tap into your leadership and their employees’ competitive side throughout your incentive campaign with healthy competitions and reward drawings. This has been shown to drive higher rates of participation for equivalent amounts of investment. One way to accomplish this would be to structure quarterly drawings for individuals who achieve a certain level of participation to qualify. Setting these qualifications slightly higher each quarter can push individuals to participate earlier and more often throughout the program year.
Build an environment and culture that is conducive to improving health. As you’re setting your incentive strategy, don’t overlook the opportunity to maximize the investment by instituting supportive environmental and cultural changes that will align with your health objectives. These changes are often very low or no cost, but can pay dividends in the participation and overall success of your program. Simply showing visible leadership support for the initiatives through a CEO letter or video — or through visible senior leadership participation in the activities — can improve employee participation significantly.