financial incentives workplace wellness

Connecting Incentives for Employee Engagement in Workplace Wellness

An estimated $2.2 trillion dollars is spent each year on chronic illnesses, employee disengagement, stress and work-related injuries, according to the Healthcare Trends Institute. To subsidize workdays missed, US employers spend $153 billion. Perhaps, it’s quite clear then, why workplace wellness strategies and the incentives used to increase employee engagement in such programs are top of mind for US employers.

If designing and kicking off a workplace wellness program is the one half of the battle, the other half is ensuring employees participate – and key to seeing returns on the company’s investment in workplace wellness.

Human psychology can help. B.F. Skinner’s positive reinforcement theory concluded that when good behavior is followed by positive reinforcement, such as a reward, that good human behavior is reinforced and highly likely to repeat in the future. One way to reinforce engagement in the workplace wellness program is through financial rewards.

NPR featured a 2016 study by University of Pennsylvania’s Dr. Mitesh Patel, which examined just how effective financial incentives were in getting employees to lose weight. The study’s subject group consisted of 197 employees in the UPenn health system, classified as obese. They were given a goal to lose 5 percent of their body weight by year’s end. Four of the five groups were offered an incentive of $550 if they reached their goal, and the control group was offered nothing. By the end of the study, whether they were financial incentive or not, no group in the study met their goal.

As reported in the article, “Bundling the financial reward into the insurance premium on a paycheck rather than making a separate payment to the worker may have affected how it was perceived. Other details — such as the fact that participants weighed themselves at work rather than at home — may have been off-putting to some participants.”

Interestingly, Patel also suggested that participants may have needed more aggressive coaching to encourage them throughout the year, reminding them of that sweet financial reward at the end of the tunnel. Connecting incentives may be constructive.

When Wellness Works Conversations spoke with Dr. Patel regarding his study’s results, he emphasized the natural human tendency to make poor, irrational decisions, in spite of their best interests. Even when the good, healthy, financially rewarding option is staring us in the eye, we can choose poorly. And maybe it’s none of that. Maybe the employees in his study were simply not impressed by the size of the reward.

Of course, financial rewards can matter. The National Business Group on Health released a study in April that boasted increased employee engagement in wellness programs, where the average financial incentive for employees was also much higher than it’s been in previous years.

“This year’s survey indicates that employee incentives continue to be a critical part of corporate well-being programs. Nearly three-quarters of employers (74 percent) include employee incentives, with the average employee incentive amount increasing to $742, up from $651 in 2016 and $521 in 2013. Employers are also increasing incentives for spouses and domestic partners, with the average annual spouse/domestic partner incentive at $694, a 47 percent increase over the 2016 average of $471.”