Effective Wellness Incentives

Many wellness programs offer incentives (and penalties) to encourage people to engage, participate and succeed in their efforts to achieve better health.  Yet companies may not see the overall results they seek for the investment they provide.  Following are four key reasons why incentives fail:

  1. “For most people the size of the incentive required to get a new behavior is greater than the savings that comes from the new behavior.”  It may take years to see substantial savings, and that assumes that the employees who have received substantial incentives are not working elsewhere when the savings are manifest.  Consider the “golden rule of incentives: ‘Only offer incentives when the total value over time of all the incentives required to drive the new behavior is less than the total savings over time that the new behavior generates.’”
  2. Sometimes rewards are paid to the wrong people or for wrong behaviors.  Incentives are often paid to those who already practice good health habits and fail to stimulate a change in behavior of others who really need to change.  “Studies of habit change have shown us that in fact what is usually missing is learning the new skills, even basic ones, that make the new habit stick.”
  3. The goal of offering incentives is to create new habits, behaviors repeated over the long term without incentives or external force.  Unfortunately the use of incentives may actually backfire.  “Incentives can change behaviors in the short term, but they often fail to make these new behaviors stick.”  Unless there is a new habit in place, when the incentive is reduced or removed, then behaviors revert back to levels lower than they were at the start. 
  4. “Incentives that are offered on an ‘if, then’ basis are less powerful than those given on a ‘now that’ basis.”  For example, compare “If you get your cholesterol under 100, then we’ll give you $100” to “Now that you’ve reduced your risk, we wanted to recognize your hard work with a token of our appreciation in the form of $100.”  The first is little more than a bribe, while the second compliments the person and expresses appreciation.  While “now that” incentives take a little more effort and imagination, the return to employers can be much greater.

From Employee Benefit News, July 2011 issue, pp. 34-36.