Maximizing Impact Through Incentives and Rewards

Because management deals mostly with the status quo and leadership deals mostly with change, in the next century we are going to have to try to become much more skilled at creating leaders.
_{- Dr. John Kotter}

The health and wellness program incentive and reward strategy is a powerful way to maximize engagement and help employees achieve lasting positive changes. Far too often, however, programs miss their goals through either frustratingly complex approaches or one-dimensional strategies that fail to leverage the many opportunities available.

The most effective strategies address the two most important goals for an effective health and wellness program:

Ge ’Em Started
Keep ’Em Going

Before addressing incentives and rewards, let’s begin with some other important factors like behavioral economics, neuroscience, and long term program goals.

The Hero

The most effective health and wellness programs are not the hero of the story, but instead empower the individual to be their own hero. This almost always comes down to using healthy guidance to help participants see just how capable they really are:

Helping them identify what matters most to them
Letting them choose what they need now
Helping them learn how to overcome whatever is in the way of living their vision

The most valuable gains from this approach are the natural improvements in self-confidence and self-discipline, which are the most critical factors for lasting change.

Realistic Expectations

Given all the variations, promises, and fanfare behind many health and well-being offerings, it's easy to forget the simplicity of a program’s purpose. Is it realistic to see employee weight, alcohol consumption, and stress all decline while at the same time seeing exercise, vegetable consumption, and self-esteem all improve? Or, is it a more realistic goal to focus on maximizing engagement and creating a culture of continuous growth?

While a healthy lifestyle is important, the best programs will empower employees with a process they can use over and over to improve all areas of their lives - and continue growing. Whether it’s making a dinner decision or managing an angry customer, an empowered employee has self-confidence and an effective problem-solving process. They may not always make the best lifestyle decisions, but if the program is helping them develop a growth mindset, they will keep improving.

Spend Wisely

If an organization seeks to help employees grow, the final hurdle to creating an effective incentive and reward strategy is to begin with a realistic understanding of the unknown…

There is no way to know in advance what challenges a particular individual faces.
It’s not possible to predict what type of help an individual needs most to overcome their challenges.

…so the program can focus on what is known:

Change is hard to start and even harder to maintain.
All change takes time and action.
We are all capable of change.
Any positive change is progress.

Personally Meaningful

Since we can never know what an employee needs without asking them, the best incentive is to let them choose what they need most right now. Everyone can identify something they would like to improve, so allowing them to decide where to begin is the easiest way to overcome the natural hesitation to change - “get ’Em started.”

Moreover, as they choose their path, they take ownership of their journey, and their successes make them the hero of their story, which means building the self-confidence and routine to continue - “keep ’Em going.”

Besides, other alternatives go against science. We all want to control our lives, and when our options are limited, we feel threatened (see psychological reactance theory). Instead of feeling free to choose from all possibilities, when a program dictates specific “healthy activities,” people feel restrained and powerless. From their perspective, they’ve lost freedom and will choose from the only freedom left to them:

They opt out all together
They go along for the ride but pay little attention
They revolt and sabotage the program with negativity

Actions and Consequences

Empowering individuals means helping them focus on what they can control - their actions/choices. However, it’s not as simple as pointing out the best choices and expecting someone to make them regularly. We are all a product of our habits, so lasting change requires practice and routine, and this is where incentives and rewards can have the most significant impact.

Immediate Rewards tied to positive action reinforce how actions have consequences. We see this all the time in bonuses and promotions, and there is no reason not to use some form of milestone rewards in health and wellness programs. There are, however, a few key considerations:

Too frequent or too large, and the motivation becomes entirely extrinsic
Best as a small token of recognition for consistent action over time
Best when the individual can choose a personally meaningful reward to celebrate their success - i.e. “icing on the cake”

Premium Credits are another form of incentive that offers multiple benefits. While immediate rewards are beneficial, behavioral economics and loss aversion theory suggest that individuals are far more motivated by the threat of loss than gain. Further, a credit on healthcare premiums reinforces proactive care and personal responsibility for health. Key considerations for a premium credit include:

Individuals must start out by receiving the credit and lose it for failing to act, or there will be no loss aversion
The credit must be “turned off” in a timely manner when someone falls of the accepted path, or it will have less impact
The credit must be able to be resumed in a timely manner for returning to the path, or it will have less impact

Wrap Up

Incentives and rewards are powerful tools to help empower individuals to make lasting positive changes. Over the years, we’ve tested multiple strategies and continue to see the best results through a combined approach that addresses many considerations.

At the same time, incentives and rewards can only overcome so much friction. A program’s ability to meet employees where they are and give them a personal path forward is critical, as is the company’s demonstrated commitment to a continuous growth culture. It's not about where someone was or is; instead, it's shifting the focus to what actions they are taking today to best align with where they want to be tomorrow.

To learn more about how we make health and wellness affordable, while still achieving a 96% satisfaction rate, driving lasting change, and maximizing engagement, send us a note and let’s schedule a consultation.

‍