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Changing Employee Health Behaviour: The Role of Corporate Rewards and Incentives

December 3, 2019

Why Do Employers Offer Corporate Wellness?

The answer to this question until recently was primarily financial; namely, to get health care cost savings and Return on Investment (ROI).  However, while this was primarily the main driver initially, there is now evidence that employers are looking for additional outcomes, beyond ROI, which gave rise to the concept of Value on Investment (VOI). This encompasses metrics other than the traditional ROI measures of sick days, pharmaceutical and other health care savings or workplace injuries. Value on Investment typically includes broad measures such as improvements in morale, job satisfaction, worker relationships, energy, and vitality. And a central reason among these is a change in employee health behavior.

Changing Employee Health Behaviour

A critical prerequisite in achieving any measurable change as a result of workplace health and wellness programs is changing employee behavior. And to motivate employees,   a variety of incentives and rewards are used by employers as positive reinforcement for specific behaviours.  These incentives vary in both type (monetary or social incentives), amount, as well as the health goals to be achieved. Changing habits such as smoking, poor eating habits, and sedentary lifestyle require effort and motivation. These unhealthy habits evolved over time and changing them is both time-consuming and difficult.  Employees must first be aware of their health risks, understand the negative impact on them and their families, become engaged and motivated to take action and most importantly, sustain the health behavior change. And employers must put in place the tools and support systems to help employees make the necessary behavior change and become self- leaders in their own health.

Awareness is the First Step in Changing Employee Behaviour

Improving employee behavior starts with awareness.  And a key tool that offers this awareness is the Health Risk Assessment (HRA). The HRA is traditionally offered as the first step in workplace wellness with the goal of helping employees adopt a healthier lifestyle and decrease their risk of disease. But awareness alone is not enough. No corporate wellness program can make employees healthy. Employees must be motivated, engaged and actively participate in their own wellness journey and must buy wholeheartedly into the need for the behaviour change needed. These are not easy criteria to meet, particularly for employees who do not see themselves as sick or unhealthy. And this is where appropriate employee rewards and incentives program comes in. It helps employers ‘kick start’ the process and encourages them to take the first step. But there are do’s and don’ts.

The Role of Corporate Rewards and Incentives

The Do’s and Don’ts of Employee Incentives and Rewards

Rewarding employees for changing poor habits and getting healthier encourages the type of change needed to get the program off the ground. It also promotes participation and a shift in employee behavior, necessary prerequisites during the initial stages of the corporate wellness program launch. However, as the required behavior changes are challenging, new and difficult to sustain, incentives and rewards must be offered throughout the year to drive long-term engagement.  The expectation is that the cash or social incentives will encourage initial participation, after which employees will be intrinsically motivated to continue the healthy behavior as they begin to feel better and see the results of their efforts. However, there are do’s and don’ts in launching a corporate employee wellness rewards program.

Do Incentivize….

  1. Participation tied to a change in health behavior
  2. Improvement in health
  3. Contributions to the wellness program (membership in wellness committee, involvement in the newsletter)
  4. Peer mentorship, social support, buddy system, teamwork
  5. For the long-term, throughout the year

Don’t Incentivize….

  1. Participation in wellness activities only
  2. Biometric screening and HRA completion only
  3. Attainment of health outcomes only (eg weight loss, too difficult to attain, will need to break it into achievable milestones, like changes in eating habits)
  4. Participants and penalize non-participants
  5. During initial program launch only

Meaningful Incentives

Incentives can be financial, social or a combination of both.  Financial incentives include cash, gift cards, merchandise, travel, vacation days, time off, reduced premiums.  Social incentives include management recognition, feature in newsletter, award plaque, congratulatory letters, friendly competitions, company-sponsored event (breakfast/lunch of champions).

While participation is the first step to be incentivized in a corporate wellness program, the challenge is to move employees from simply attending a wellness workshop, or participating in an event to actually making a  behaviour change like improving their nutrition, increasing their activity or working towards weight loss. Cash incentives are popular with U.S. employers, ranging typically between $150 and $500. Champion companies with high senior management engagement in corporate wellness may offer as much as $600 to $1500 in cash or premium reduction incentives ( Dee W. Edington, Zero Trends, p. 154, Health Management Research Centre, 2009). Trinkets, like t-shirts, hats, and water bottles are reported to increase initial participation by 15-25%, merchandise like gift cards, movie passes or travel can result in up to a  35% increase. Cash or benefit plan improvement has been reported to boost initial participation by up to 60%.

The Role of Corporate Rewards and Incentives


Steps in Implementing Successful Incentives & Rewards Program

  1. Decide on the Corporate Employee wellness Rewards Program. It is important that the awards and incentives program is clearly established and employees have been consulted through surveys, discussions at staff meetings or wellness committees. Employees need to buy into the program and understand how points are awarded and what the incentives are for different levels of behaviour change or health goals. Incentives, whether cash or social, must be appropriate for the specific behaviour to be reached. If they are too small, employees may consider that the desired behaviour is not very important. Similarly, if the incentive is too high, they may perceive the goal as too difficult to reach. In either scenario, participation in the employee wellness rewards program will be negatively affected.
  2. Use of Online Corporate Wellness Rewards Platform. This should provide an easily customizable platform where employees can enter their wellness activities and earn points towards specific awards. It should provide employees at a glance with their progress towards attaining the specific health behaviour and the corresponding incentive. Equally important is the identification of employees who were successful in reaching the desired behaviour and winning the award. Incentives should be awarded immediately after the attainment of the specific health goal, so the automated wellness rewards platform is critical in the effective management of the employee wellness rewards program.
  3. Clearly Communicate the Corporate Employee Rewards Program. Communication is critical, not only during the initial launch but throughout the life of the rewards and incentives program. Employees need to be very clear on the goals and objectives of the program, the reasons why it is implemented and exactly what they need to do to achieve the different corporate award levels. Furthermore, incentives used initially to promote participation must continue for the long – term and be appropriate to the level of effort and expected a change in employee behaviour. And communication should be ongoing and purposeful, with frequent reminders from management or supervisors, posters, special events in company cafeterias and other promotional activities.
  4. Monitor the Process and Results of the Employee wellness Rewards Program. There needs to be an administrator that can answer employee questions, monitor results and ensure the program runs smoothly. It is typically necessary to make some adjustments at the end of the first year, after which the program can essentially run itself through its automated corporate wellness rewards platform. The administrator should also encourage conversation about the corporate employee wellness rewards program and hold occasional lunch and learn sessions. Such sessions offer the opportunity to reiterate the purpose of the program, the steps to be achieved for the different levels of awards and answer employee questions. Also, at the 3 or 6 month period of the program, it is helpful to host a special event attended by senior management that recognizes winning employees who reached specific health goals.

In summary, corporate incentives and awards recognize the change in employee health behaviour. They are used to motivate and reward employees to adopt a healthier lifestyle and remain engaged in their own health and wellbeing.

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