The Well-Being Journal

Do Incentives Really Work?

Jennifer Rudloff

Over the years we’ve learned that there are a number of virtues and pitfalls to using incentives to encourage people to live healthy lifestyles. By definition, an incentive is an extrinsic reward that is provided to a person until such time that the value to the recipient is internalized. When it comes to health, many employers use incentives in the hopes that their employees will internalize the need to be healthy and achieve lasting behavior change, which ultimately creates a healthier, and more productive work force with lower healthcare costs. While our experience tells us that incentives do indeed drive participation in health promotion activities, many organizations are struggling to translate that participation into lasting behavior change – and THAT can get expensive fast.

Take this scenario for example: Let’s say Company X offers an incentive to their people for taking a health risk assessment (HRA), and an additional incentive for those who participate in coaching programs to work on health risks identified through the HRA. Of their 10,000 employees 8,000 participate (up from only 3,000 last year). 7,000 of the 8,0000 HRA takers enroll in coaching, up from 1,000 last year. So far so good…but what if only half of the participants really take advantage of the opportunity and work to change their health behaviors? Company X has then invested in incentives for a lot of people who have no real intention to change their behaviors. In this scenario Company X’s participation could skyrocket but the achievement of outcomes could be totally unproductive, throwing the balance between the cost of incentives and health cost savings out of whack. Bummer. Tricky, huh?

When you step back and look at it, it’s easy to see why incentives have become a source of lively debate amongst wellness professionals. Some professionals believe that the practice of taking healthcare premiums from people who take care of themselves to subsidize those who don’t has gone far enough. They would advocate “stick” type incentives to penalize people who do not take care of themselves to offset this balance. To the other extreme, some professionals believe that laws and regulations should be put in place to ban or restrict the use of incentives all together. Others are not opposed to incentives but are concerned that the wide spread use of them is causing employees to feel a sense of entitlement for doing what is already in their best interest. There is merit in all of these positions, and all of them deserve to be heard. While I doubt the industry needs any additional laws or regulations, I do believe that more education is in order.

Employers need to be more aware of the pro’s and con’s of incentive programs so they can make smart decisions about what will work best for their people and their organization – it’s not a one-size-fit’s-all kind of thing. A consultative partner can help carefully craft an incentive plan to fit the needs of an individual organization. You must take into consideration company culture, needs, stage of well-being program development, the communications strategy, and the style of doing business. For instance, studies have shown that the better the culture and communication effort, the smaller the incentive required to drive participation.

If you want to learn more or join the debate on incentives, the Health Enhancement Research Organization (HERO) has an ad hoc incentives group that has been meeting to explore the best ways to leverage the value of incentives. This group is reaching out across the industry to get opinions from experts nationwide. I expect this group will provide leadership in the industry around incentives, so this might be a great time to join the HERO Think Tank if you have a vested interest in being part of the industry-wide incentive discussion. Please feel free to reach out if you would like more information on this effort, or if you have an opinion and want your voice to be heard.

I could say a lot more about incentives, but for now let’s leave it at that. What do you think about incentives? What incentives have been most successful for your organization? Have you been creative with the incentives you offer? Please share!

Topics: Well-Being HERO Workplace Well-Being Engagement Health Wellness Wellness Program Incentive Programs