Researchers agree: Employee health incentives can work, but only if they are smarter

Can financial incentives help motivate healthy behaviors in employees, creating a healthier workforce?

This question has become a central topic of debate in employee healthcare since the ACA expanded employers’ ability to offer incentives and rewards for employees engaging in health and wellbeing programs. And it is an important question, as already four out of five large employers in the U.S. are offering such incentives.

This month, an op-ed in the New York Times addressed this very question. Written by a team of University of Pennsylvania researchers to accompany their study published in Health Affairs, the piece concludes, “Companies can improve the health of workers, but only if they are smart about it.”

Companies can improve the health of workers, but only if they are smart about it.

Jiff agrees. Financial incentives can motivate employees to improve their health if they are delivered in a smart, personalized way. Based on our experience, here are a few key ways to make employer-sponsored incentives programs smarter and more effective.

1) Diversify your incentives and offer them in increments, over time.

As the researchers found, one reason rewards often fail is that they are offered too far in the future. For example, a one-size-fits-all reduction in health insurance premiums offered at the end of the year does not often motivate people to take action today. People need to see a clear connection between their action and its reward.

One important way to do this is to shorten the time employees wait before receiving incentives. There are several ways to tackle this, but one way is to earn “reward points” and to track their progress in real-time as they earn incentives. Additionally, offering a range of rewards is an effective tool, as not all employees will respond to a cash reward. Just as the credit card industry offers consumers a variety of rewards – travel, cash back, and credits to purchase other items – employers can incentivize employees with a variety of rewards.

2) Personalize your incentives.

Just as employees have different motivations, they also have different health and wellness goals. For example, it makes sense to incentivize employees who smoke to use a smoking cessation program. With activity tracking, it makes sense for a fit employee to have a higher step goal.

The Jiff platform allows employers to offer fully customized health benefits and incentives to employers, to deliver the right benefits to the right employees with the incentives that will most encourage them to take action.

3) Infuse your incentives program with meaning.

Rewards need social proof to be credible. In the UPenn study, the researchers noted successful results from a weight loss program that grouped employees and only rewarded those who were successful in a reaching a weight loss goal. They explained the competitive factor was encouraging, stating, “This works, probably because people hate the idea of seeing others in the group collect a prize that might have gone to them if only they had tried a little harder.”

If done right, employees will not just value the incentives and rewards, but what they stand for – improved employee health and wellbeing. Jiff helps employers make health benefits and incentives become a part of company culture by creating competition, team-based challenges, social interaction, and recognition events.

Research has found that some employee incentives programs work and some do not. However, as the team from UPenn explained, incentives can motivate healthy behaviors in employees – they just need to be designed better. Jiff helps both employers and employee make the most of their health benefits and incentives by delivering smarter, personalized health benefits.