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Find the right balance for wellness incentives
A fun, fair approach is best
Incentives for wellness program participation is becoming more common, but "it can be challenging to settle on the optimal design," according to Daniel Buckalew, a health coaching program manager for Minneapolis-based Ceridian, a global business services company.
"Some corporate leaders feel they shouldn't have to pay people to practice a healthy lifestyle, even though they understand the impact unhealthy employees can have on the bottom line," says Buckalew. "This opinion is understandable, but it would be shortsighted to ignore incentive programs altogether."
Incentives can increase utilization of available programs and services, says Buckalew, adding that they have not typically been proven to directly improve health outcomes.
However, you must get adequate utilization and engagement before you can get the desired return on investment, he adds. "This is where incentives come in," says Buckalew. He recommends these approaches:
Don't offer only low-value incentives.
"Incentive plans that only provide low-value rewards, such as T-shirts and water bottles, don't dramatically increase participation," says Buckalew. "Incentives must be of a certain value to have a significant impact."
The potential for total annual rewards in amounts of $100 or more, "is much more successful in driving higher engagement," he says.
Carefully consider the perceived fairness of the incentive being offered.
"Some employees may view it as unfair if they don't feel there is an equal opportunity to earn the incentive," says Buckalew.
For instance, a program mimicking "The Biggest Loser" with a higher-value reward needs to consider those who are already at an optimal weight, he explains, and therefore don't have an opportunity for that reward.
Hold competitions between departments, business units, or work sites.
"This can add an element of fun, and may promote teamwork," he says.
"Featuring names and pictures of high-level participants or those individuals who achieved significant goals in company newsletters or Intranet sites, can be motivating," he says. "However, be sure to get permission, as not all employees may agree to this."
Some companies are now taking the opposite approach to incentives, says Buckalew, by implementing a surcharge on health insurance coverage for unhealthy behaviors such as smoking. Although this can be successful in motivating some employees to attempt to quit, it may have other negative impacts that aren't easily measured, he warns.
These may include distrust and negative feelings toward the employer, and decreased morale, says Buckalew. "A better approach might be to discreetly raise premiums for all, then offer sizable refunds to those who practice healthful behaviors and achieve specific outcomes," he suggests. "This approach may be considered more fair, but may take more resources to administer."
Buckalew says to consider linking participation in programs to prize drawings. The more an employee participates in an exercise, nutrition, or smoking cessation program, for example, the more chances he or she will get toward a grand prize drawing.
"Those who achieve specific goals might also get more chances than those who just participate, but don't achieve goals," he explains.
Buckalew says that above all, your incentive program design should be an integral part of the organization's health promotion strategy, and should be closely aligned with the marketing and communication plan. "This is a critical component," he says. "Without adequate utilization, even the best designed programs will not produce the outcomes or ROI desired."