No Wellness, No Bonus
Leadership buy in, as we all know, is a crucial part of any wellness program. Support needs to come from the top down. If the C-Suite and management do not utilize and discuss their company's wellness program, why would the lower level employees?
So how do wellness managers guarantee their corporate leadership carry the message throughout the company? An idea beginning to gain traction with some wellness professionals is to link a manager's bonus to their employee's health, but will it work and is it the right thing to do?
Compensation in Theory
Executive compensation is already a touchy subject, especially here in the United States. According to a Glassdoor report , across all Fortune 500 companies, the average CEO salary was $13.8 million, versus the median salary of $77,800 for the average worker. This is an average salary 204 times higher for executives as opposed to their employees. And this study only deals in terms of salary, and does not include benefits nor bonuses.
However, some executives such as Google co-founders Larry Page and Sergey Brin, as well as Facebook founder Mark Zuckerberg, all declared salaries of $1 in 2015. Elon Musk of SpaceX and Tesla Motors, made the legally required California minimum wage of $37,000 in 2015 and declined receiving a bonus, stock awards, option awards, or any other compensation. Of course, these executives were billionaires prior to 2015, and could afford to decline what their peers with similar titles are earning.
So, as it may be quickly becoming more evident, the discussion of executive compensation can be complex without delving into the moral and ethical quandaries of the issue. So adding another layer of complexity, like incorporating the health and wellbeing of their employees, can further cloud the debate. With so many differing opinions in the mix, a look at empirical information provide a clearer look at the underlying issue.
What the Research Says
A recent study conducted by Cornell University's Food and Brand Lab, which appeared in the Journal of Occupational Health Psychology, found that by linking 10 percent of annual managerial bonuses increases wellness initiatives, like adding water coolers, offering healthy snacks, and opening dialogues between employees and their managers regarding their health.
The study surveys the opinions of 270 managers from a wide array of industries and found that 68 percent were in favor of being evaluated by their employee's health actions. They were enthusiastic to work for a company that compensated them for implementation of their health ideas.
The lead researcher hypothesizes that this is so attractive because it allows managers to make wellness a concrete, physical problem as opposed to what was just ethereal in the past.
However, they go on to note that the best method is to not make management directly responsible for their employees' health outcomes, but instead to incentivize presenting employees with the opportunity to add more activity throughout the day by reducing time spent sitting or helping employees understand what it means to preserve their health.
Compensation in Practice
In an effort to get a clearer picture of the debate, Corporate Wellness Magazine spoke to Dr. Mansoor Anwar, Senior Director - Medical & Occupational Health Services, Human Capital & Administration for Emirates Integrated Telecommunications Company, PJSC; known more simply as 'du'. Du is a Dubai-based telecommunications company, where Dr. Mansoor oversees the implementation of a program tying employee health to executive bonuses.
"In the UAE our leaders lead by example," said Dr. Anwar. "In a government summit, our prime minister mentioned that sport and physical activity is part of his daily routine. This inspired us to pull our executives together and link health and fitness with their bonus."
Employee health outcomes only account for 5 percent of management bonus at du. Management qualifies for the bonus or not if the employee population meets certain pre-agreed target events and biological indicators.
This is more than enough to get encourage management to be more active in the wellness programs, they now more actively encourage team members to attend wellness events and are more likely to make an appearance themselves.
The management, however, knows it is not all about themselves, and makes it a priority to announce the most committed employees on their teams. Other highlights from this initiative include other teams voluntarily adopting this approach, and upper management becoming more aware of the health concerns of their employees.
Dr. Anwar went on to note that employees felt more valued after the program went into effect, with "enhanced awareness and increased participation in various health events."
Dr. Anwar did mention that not all of management were on board at first, and needed some time to come around. "Some of them needed more time, because they viewed it as personal and they had no right to interfere."
While it did take some time, the shift works for du, and their management is more engaged in making sure their employees are more active in their daily lives.
What Does this Mean for Wellness?
Employee and managerial engagement are crucial for the success of a wellness program. Although there is a lot of debate surrounding executive compensation like disparity from average employees, it seems that by forcing company leadership to have 'skin in the game' when it comes to wellness is an effective method to get them onboard. Like all wellness programs however, the best solution for your wellness program may not be the solution for another.