By Ben Schiller
Many companies now have employee wellness programs, and more and more use incentives to cajole staff into better behavior. A recent survey of 800 employers by consulting firm Aon Hewitt found that 79% now offer incentives, including reduced insurance premiums, and penalties for failing to participate.
From companies' point of view, wellness makes strong financial sense. A previous Aon study found that for every $1 employers spend, they receive back $3 to $6 in benefits. Healthier workers have lower rates of absence and "presenteeism" (attending work while sick), they return more quickly if they do get sidelined, and they have higher productivity rates.
But, according to researchers, employers still have a pretty dim view of what incentives actually work--for example, what actually increases productivity most. "There is broad and growing enthusiasm for rewarding healthy behaviors in the workplace, but there is little evidence on the effects of these strategies," says Jeff Kullgren, assistant professor at University of Michigan Medical School.
Kullgren, and colleagues, set up an experiment to test one incentives question: Do people respond better as individuals or competing within groups? They found strong evidence for the latter.
The study, which is written up in the Annals of Internal Medicine, looked at two groups of obese employees at a hospital in Philadelphia. The first group received $100 each for every month members reached a weight-loss target. A second group, with five members, had to split the money evenly (with the potential to get $100 each if everyone hit their goals).
After six months, the second group had achieved almost three times more weight loss, indicating that peer pressure could be at least as important as cash.
"We found that these incentives were substantially more powerful when delivered in groups, which has important implications for both policy makers and the employers who are considering offering them," Kullgren says (though he cautions against introducing a Biggest Loser office sweep just yet).
With the Affordable Care Act set next year to allow employers to incentivize up to 30% of the cost of coverage (and possibly 50%, if the Obama Administration agrees to raise the threshold), the issue of how to incentivize will grow in importance. Whether employers should have so much power to set health priorities is another issue. But at least they'll know more about the best way to do it.
Copyright 2013 by Fast Company. Reprinted with permission.