Incentives, what’s the point?

By Mike Quigg

People behave rather irrationally, especially when it comes to lifestyle behaviors. We make decisions that give us immediate gratification over other options that may greatly benefit us down the road. So while we all value our health, want to be there for our loved ones, and continue enjoying everything that gives us meaning or joy for a long time, we don’t behave in ways that align to that.  We often need an extrinsic boost … enter incentives.

If your organization offers an incentive to employees for engaging in health and wellness initiatives, you are in good company. A RAND survey indicated that 75 percent of employers included incentives as part of workplace wellness programs[1] .  Even better, there is a lot of research that shows that financial incentives are effective in driving participation. One such example published in the New England Journal of Medicine by Kevin Volpp et al. looked at smoking cessation program participation rates as well as short- and long-term cessation rates and showed that groups that were financially incentivized had higher participation and cessation rates compared to those groups without incentives[2].

There are questions that always come to mind when thinking about incentive strategies. The first (and probably the most obvious), is “Why are we providing the incentive?” I haven’t met a group yet that has said, “We want to spend a significant amount of money to provide an incentive to get people to participate and we don’t care what happens,”… so the answer to the question is usually “We want to drive engagement.” It’s for a variety of very good reasons:  improve employee health, reduce healthcare costs, increase productivity, make employees happy, keep employees, etc.

I recently came across an article that I read a few years ago by Dan Ariely. It was published in the Harvard Business Review and was titled “You Are What You Measure”[3]. The idea is that people behave in such a way that aligns to how they are being measured. I thought about this in the context of my career/passion in making people healthier.  If we’re trying to make people healthier, we have to change people’s behavior and to change people’s behavior we need to get them engaged long-term so they can build new or reinforce existing positive lifestyle habits. Every day we work with our clients on comprehensive strategies to drive engagement and make people healthier, happier and more productive. Optimizing incentives plays a huge role in that. But in thinking back on Ariely’s article, it hit on such an important point: Where we anchor the incentive can significantly impact the type of engagement we are going to get. So aligning an incentive to completion of an HRA and a few other activities might not get people into a cadence of participation that will drive change.

Incentives can be powerful, we know from Vitality surveys that incentives are a major driver in program participation. If the goal is to drive engagement that leads to improving health, it takes more than short-term participation to do that, so we need to consider strategies that measure completion of the incentive requirements based on long-term participation in the program. We’ve recently conducted an analysis looking at six different types of incentive strategies that included outcomes-based, activity-based, and others that are anchored at achieving certain long-term thresholds of engagement and have found some tremendous insights into the leading strategies for getting participation. See our 2017 engagement study for the details.




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