Financial Wellness

A Look at Incentives and How They Impact Motivation

The use of financial incentives to encourage employee participation in health and wellness programs has grown steadily in recent years, and is now the norm. Included in this year's Towers Watson/National Business Group on Health employer survey was the finding that two-thirds of companies now offer cash rewards to increase wellness program enrollment.

Nearly 40 percent of the companies surveyed extend those incentives to spouses as well, up from 34 percent in 2013.These incentives are popular because they increase program participation, but it's important to separate participation from desired outcomes. Participation alone doesn't equate to such long-term health goals as quitting smoking or sustaining weight loss.

In my experience, we've seen that once an incentive is given, motivation begins to subside and old behaviors return, which usually means a return to smoking or to previous weight. Results tend to be better when incentive programs are paired with evidence-based services and behavior-change clinical approaches that address the underlying challenges to lasting health improvement.

The Role of Incentives

Incentive strategies in use today fall primarily within four categories:

  • Rewarding individuals for enrollment or participation in wellness programs or activities like employee challenges
  • Rewarding individuals for a specific health improvement, such as reducing body mass index (BMI) to a normal range or quitting smoking for an extended period
  • Rewarding participants who make progress toward more general health goals through the successful completion of plan components
  • Penalizing employees by charging higher premiums and/or deductibles for biometric values that are out-of-range, for continuing to smoke or for refusing to participate in programs.

Some employers pursue one option, while others combine two or three, and I've seen many variations within each category: benefit-related incentives, cash incentives, gift cards and more. But what happens after employees complete the program for which they received a reward? Of course, participation in a wellness program doesn't guarantee results.

Some behaviors and health indicators (like biometrics) are very difficult to change because of personal (psychological and genetic), environmental, and behavioral factors. Quitting smoking, losing weight or becoming generally more healthy requires that the behaviors causing health issues be replaced with sustained, healthier behaviors.

Extrinsic v. Intrinsic Motivators

Intrinsic motivation is derived from a person's internal core values and beliefs. An intrinsic motivator would align with how the person wants to live his/her live. For example, a busy working mom loses weight to have more energy, or a husband quits smoking so he can enjoy evening walks with his wife.

Extrinsic motivation comes from rewards given by others or that people give himself or herself if they achieve a goal. Because the positive impact of the external reward is short-lived, the person may not stay engaged with the behavior. Examples of extrinsic motivators include losing weight to look good at a wedding, or participating in a wellness program to earn a financial incentive.

A large public employer with 42,000 employees raised their participation from 22% to 75% over a two-year period by implementing a financial incentives program. This organization knew that incentives only provide short-term motivation. As a result, they developed a "layered" incentives program designed to help people stay engaged long enough to experience the personal rewards from better health.

The layered approach consisted of three tiers of incentives starting with financial rewards in the first tier of up to $480 for participation in health and wellness programs based on credits earned. The second tier was a peer recognition program sharing participants' success in the program and the third tier offered rewards for biometric values in the clinically healthy range.

Motivation for Sustained Behavior Change

Incentives do a good job of motivating employees to complete activities like the health risk assessment or make simple behavior changes, but they are inherently not designed to keep people engaged long-term. Long-term engagement typically only happens when people have a personal desire to improve their health and wellbeing and don't require an external, or extrinsic, motivator to stay engaged.

For example, an employee participates in a health behavior-coaching program initially to receive a financial reward but then continues to participate on his/her own after experiencing a series of fulfilling personal interactions with a health behavior coach. A person who decides to lose weight simply to receive a financial reward may see the weight return after the reward has been paid.

When an employee with the same incentive is motivated by a personal desire to participate in a greater range of activities with a spouse, children or grandchildren, the ability to enjoy that participation after losing weight may reinforce the desire to sustain behaviors that will keep the weight off.

Personalized health coaching can help individuals become more connected to their intrinsic motivators, overcoming personal barriers and keeping those motivators front-and-center as the challenges to sustained behavior emerge.

Within a trusting relationship guided by a knowledgeable coach trained in clinical approaches, such as cognitive behavioral counseling techniques and motivational interviewing, the employee may discover his/her own personal value for better health.

What to Avoid

In addition to best practices for increasing employee participation and promoting sustained behavior change, many common incentive practices can be counter-productive. Most have to do with using negative rather than positive reinforcement. Consider that the spirit of any wellness undertaking should be to help employees look forward to enjoying the personal benefits that come from being free of tobacco addiction or shedding unwanted pounds, and the simple good feeling that comes with being in better health than in the past.

While it may seem logical that penalizing employees for unwanted behaviors can eliminate them, financial penalties may breed resentment rather than encourage commitment. Shifting health costs to high-risk individuals through higher premiums and/or deductibles may not always make unhealthy behaviors go away-and may make otherwise valued employees leave the company instead or lead some individuals to hold on tighter to their unhealthy behaviors out of spite.

Success Story: a Lifestyle Behavior Change Program that Delivers Sustained Weight Loss

A study published in the January 2014 Journal of Obesity that I co-authored showed that a low-intensity weight loss program that offers three behavioral counseling calls combined with a comprehensive website can lead to clinically significant weight loss for obese participants.

The study of 2,917 participants with a BMI of 25 or greater across 15 employers demonstrated that at six months, 34 percent of participants lost at least 5 percent of their starting weight, and 11 percent of participants lost at least 10 percent of starting weight. At 12 months, those numbers increased to 39 and 16 percent of participants, respectively.

Those numbers are highly significant from a health perspective; for obese people, losing just 5 percent of body weight can prevent or slow the progression of a chronic condition along with significantly improving health, productivity and quality of life.

Even among participants with less weight loss, most of the participants studied exhibited sustained, positive changes in health behavior. A majority reported consuming at least four servings of fruit and vegetables daily, starting most days with breakfast and physically exercising at least four days a week.

Going Beyond Simply Offering Incentives

Every corporate culture is unique, and there is no single approach to a corporate wellness program ideal for every single workplace. That's why wellness programs typically cite ranges of results-what works well in one situation may work even better in another.

Regardless, it's important to keep the following in mind: While well-designed incentives can help to secure higher participation, combining incentives with a strategy to promote behavior change, which can sustain quality-of-life improvements that last well beyond the receipt of an incentive check, may be the best course for realizing an optimal return on incentive investments.

About the Author

Susan Zbikowski, PhD, is a senior VP of research, training and evaluation services at Alere Wellbeing, a company that provides behavioral coaching programs. With 20 years of experience in the field of health improvement, Dr. Zbikowski has helped develop a variety of employer-sponsored wellness and wellbeing programs.

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