Why do we make certain choices or follow specific routines? It’s a question of human behavior, which has been studied for quite some time. But did you realize those studies could contribute to how you operate your company’s wellness program?
To frame the discussion in terms of your company’s wellness initiatives, behavioral economics is an academic term used to describe some of the reasons people will wear seat belts, go the gym, or quit smoking. Each of those wellness choices comes with direct or indirect economic consequences. For example, if everyone wears a seat belt, the cost of car insurance will decrease for everyone. But that’s not always enough. Even the risk of personal injury and expensive medical care doesn’t persuade people to change their behaviors. So what does?
What Motivates Your Workforce?
A recent study from the University of California, Santa Barbara came up with a scheme that illuminated some motivators behind gym visits. The researchers teamed up with a large corporation and gave that company’s employees a set of incentives to hit the gym. To start, the employees were paid $10 for each workout. After four weeks, the scheme switched to a commitment contract: The employees set aside their own money, which was then released back to them for each visit to the gym. If they didn’t visit the gym, the money was donated to charity. The study revealed that this combination of behavioral economic incentives increased gym visits by 20 percent for several years. The employees first found motivation from the short-term financial payments but remained motivated through a self-funded contract.
An article in the Harvard Business Review suggests that employers should utilize group behavior and social norms to encourage wellness. Instead of simply offering incentives to individual employees, create teams that only benefit when the group reaches certain levels of participation. Competition also helps boost group behavior. For example, teams of employees can compete for cash and prizes based on factors such as steps walked or visits to the gym.
Range of Rewards
Because the motivators behind human behavior are complex, any economic rewards for behavior have to be equally complex. Start with a short-term incentive, such as gift cards or cash payments. Be sure to keep these rewards visible; building them into a paycheck decreases their impact. Employee paychecks vary from pay period to pay period anyway, and a $25 cash reward just gets lost in the mix when part of a larger sum. Instead of going that route, build in a group element to the plan and create an ongoing incentive, such as a commitment contract. Finally, consider adding a points program for routine activities that involve making healthy choices.
Statistically, wellness programs improve employee health and decrease health care costs over extended periods of time — and not just in broad, mass populations. Smaller employers may also see year-over-year improvements in health care costs once they start offering wellness incentives. As the misuse of health plans decreases, stress levels also decrease and general health increases when employers have an active wellness program to follow.
Incentives based on behavioral economics will not ensure 100 percent participation. However, by altering your program’s existing incentive structure to better match how human motivators change over time, your wellness programs will likely see dramatically better results.
Dylan Murray has an MBA from San Diego State University and a bachelor’s degree in communication from Boston University. He is a licensed insurance agent in California, but he works as a professional researcher and writer reporting on business trends in estate law, insurance and private security. Dylan has worked as a script analyst with the Sundance Institute and the Scriptwriters Network in Los Angeles. He lives in San Diego, California, and Marseille, France.