Getting the Most Out of Incentive Investment

This issue is all about getting the most out of your investment into well-being incentives.

In more than two decades of helping to build customized well-being programs that are different for each one of our clients, we found a singular thread throughout that led to success: the focus on behavior change.

This has been Propel’s guiding principle for all well-being programming, however in no area of program management is it more evident than in incentive programming.

This topic is heavily discussed in our new eBook, which I highly recommend you take a look at.

If you haven’t already, download our free eBook: Designing an Engaging Well-being Program That Gets Results.

You’ll find some great downloadable resources there too!

An Evidence-Based Approach

In today’s competitive landscape, organizations increasingly recognize that employee engagement is crucial for overall success.

However, many incentive programs fall short of their potential, failing to drive meaningful behavior change.

At Propel, we believe that the key to unlocking the true value of incentive investment lies in understanding and leveraging behavioral economics principles.

By focusing on behavior, we help our clients design custom incentive programs that not only meet their goals but also optimize their investment.

The Role of Financial Incentives

The foundational premise of effective incentive programs is that financial incentives act as extrinsic motivators.

These motivators are designed to engage employees in actions that can ignite their intrinsic motivation, ultimately leading to sustained healthy behaviors.

Simply put, financial incentives are just a stop on a spectrum of incentives. They need to be used to get your employees from one place to another, but progress must always be made along the way.

This connection is often overlooked by those designing incentive programs, resulting in missed opportunities for engagement and investment efficiency.

Misconceptions About One-Time Actions

A common misstep in many organizations is the practice of rewarding employees for completing one-time tasks, such as biometric screenings or health risk assessments (HRAs).

While these elements are essential components of a well-being program, simply paying employees to complete them does not foster lasting behavior change. The hope is that once employees receive feedback about their health risks, they will take action to address those risks.

However, research indicates that this approach is flawed; while employees may acknowledge their risks, they are unlikely to take the necessary steps to change their behavior.

Effective Strategies for Employee Engagement

To effectively motivate employees to complete screenings or HRAs, organizations should consider restructuring their incentive programs.

Instead of offering incentives for these one-time actions, organizations can require employees to complete screenings as prerequisites for accessing incentive opportunities that lead to payouts. This creates a structured path that encourages engagement while maintaining focus on behavior change.

Building Habits Through Routine Behaviors

If the goal is to promote physical activity, an effective incentive program could require participants to engage in at least 150 minutes of moderate physical activity for at least nine out of thirteen weeks each quarter. By creating such a program, employees are encouraged to adopt regular routines, ultimately transforming these actions into habits.

When individuals engage in physical activity over a sustained period, they begin to experience tangible benefits such as increased energy, improved sleep, better weight management, and enhanced overall well-being. These positive outcomes foster intrinsic motivation, making participants more likely to continue their routines even after the financial incentives have been removed.

The Power of Sustained Engagement

The process of habit formation is key to achieving lasting behavior change. When behaviors become routine, they are more likely to persist beyond the initial incentive period.

Participants who engage in consistent physical activity often report feeling healthier and more motivated, resulting in a self-reinforcing cycle of positive behavior. In this example, the initial extrinsic motivation provided by the incentive successfully translates into intrinsic motivation, demonstrating the effectiveness of a well-designed program.

Quality Incentive Design: A Cautionary Note

While this example illustrates the potential of incentive programs, it is important to recognize that quality incentive design encompasses much more than just the structure of the reward system.

A comprehensive understanding of the principles of behavioral economics and the nuances of human motivation will enable organizations to craft programs that resonate with participants and drive engagement.

Incentives can be likened to rocket fuel; when used correctly, they can propel an organization’s engagement efforts to impressive heights.

However, if mismanaged or improperly designed, they can lead to disastrous outcomes, wasting both resources and opportunities.

Organizations must carefully evaluate their incentive strategies to ensure they are not only effective but also aligned with the overarching goals of the program.

Ultimately, getting the most out of incentive investments requires a shift in perspective.

By focusing on behavior and fostering intrinsic motivation, organizations can create incentive programs that are not only cost-effective but also impactful.

At Propel, we are committed to helping our clients navigate this complex landscape, designing incentive programs that yield meaningful results and drive lasting engagement. Investing in the right strategies today will pave the way for a healthier, more motivated workforce tomorrow.

Implications for the well-being administrator:

• Financial incentives must be used as a conduit between initial participation and habits sustained by intrinsic motivation.

• Routine behaviors are the basis of habit formation and, as such, should be heavily emphasized in your well-being programming.

• Incentives are like rocket fuel, and when used correctly, they can propel your program to heights you never thought possible.

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