Maximize the Value of Wellness Incentive Programs
This is a draft cheat sheet. It is a work in progress and is not finished yet.
The trouble with most existing wellness incentive programs is that they are poorly designed and inefficient, achieving too little reward for each dollar spent and often offending employees with a forceful Big Brother attitude that alienates the employer financing the program.
Many wellness incentive programs include higher health care premiums to directly penalize employees who make decisions that are costly and bad for their health – e.g., smoking or maintaining an unhealthy weight. Far from being positive and rewarding, for a typical worker already struggling to be healthier on her or his own accord, these programs behave like a credit card debt that never seems to go away. Such programs may even create anxiety that can stimulate the unhealthy behavior they're designed to cure.
1. Write your winners a check.
Everyone loves unexpected windfalls. The behavioral economics concept of mental accounting demonstrates that there is a substantial difference between a $200 discount on a large bill (e.g. your $7,000 health insurance bill) and receiving a $200 check in the mail. Calling your employees "winners" and rewarding them with a check will make the incentives more exciting, more fun and more effective.
2. Reward winners regularly.
Making rewards for good behavior tangible and immediate makes them more effective. For example, there's a big difference between receiving a reimbursement check at the end of the year if you visit your health club 150 times and receiving a weekly check for visiting the health club three times that week.
3. Incorporate social incentives.
It's fun to get healthy with friends! A Brown University study recently concluded that social networks (and teamwork) play a significant role in enhancing weight loss outcomes. In particular, researchers found that having more social contacts trying to lose weight is connected with greater weight loss intentions, and changes in physical activity are similar among teammates in a physical activity campaign
4. Make incentives into a "bet."
Incorporate some of the excitement of Vegas into your wellness program by giving your employees the opportunity to raise their bet and win more money for losing weight. Giving employees the opportunity to put some skin in the game and opt-in to your incentive programs will make them more committed and effective at changing their behavior.
5. Have the chance to win a really big prize
Consumers are more motivated by the chance to potentially win a large prize than a guaranteed small prize. In the same way that consumers like the excitement of a lottery, a really large prize can be very motivating to catalyze behavior change.
6. Make incentive goals attainable.
Incentives need to be attainable in order to be fun and change behavior. It is not realistic to expect all employees to get to a healthy weight in 1 year. Instead, employers and insurers should tie incentives to realistic goals like a 5 percent or 10 percent weight reduction.