The Cost of Employee Fitness: Do Financial Incentives Make Cents?

Physical activity is associated with improved health and can help mitigate or delay the onset of many diseases, including types of cancer, coronary artery disease, high cholesterol, hypertension, and osteoarthritis while improving quality of life in healthy individuals (2). Public health agencies recommend that adults achieve at least 150 minutes of moderate or 75 minutes of vigorous physical activity per week in order to derive many health-related benefits (2). As such, a core objective of Healthy People 2020, the nationwide health promotion and disease prevention program governed by the United States Department of Health and Human Services, is to increase the proportion of adults who meet current federal guidelines for physical activity (9).

Within working populations, higher physical activity levels are associated with reduced healthcare utilization, lower medical costs, and fewer work absences (4). This has prompted employers to enact strategic measures that yield these positive economic impacts.

In recent years, some worksite health promotion programs have offered financial incentives to employees who voluntarily enroll in fitness challenges which allow them to self-report their physical activity. These activity challenges typically stipulate that employees who achieve a predetermined amount of physical activity, which may be measured in minutes or steps per day over a given number of weeks, will receive a monetary reward. The purpose of a monetary incentive is dually-aimed. First, to encourage active employees to maintain a physically active life and secondly, to "nudge" sedentary individuals to initiate physical activity and hopefully maintain it as a lifelong habit. However, a substantial body of recent literature suggests that these expectations may not always materialize (1, 5-7).

While financial incentives have been shown to positively influence behavior such as attendance at screenings and getting vaccinations (1) these behaviors are simple and consist of just one or a few actions. Changing physical activity patterns is more complex because it necessitates a lifestyle modification.

A study conducted at the University of Pennsylvania incentivized employees for hitting a target of 7,000 steps and found that workers who were offered a cash incentive were no more likely to increase their step counts than their peers (10). Likewise, a 2015 meta-analysis which measured the impact of financial incentives on increasing physical activity showed that financial incentives did not lead to increased target levels of physical activity during or after the intervention (6).

Although some studies have contradicted these findings and have shown positive results in the short term, they also demonstrated that after incentives ended, activity levels reverted to baseline levels or even declined (1,5). Thus, financial rewards show the potential to weaken autonomous motivation, and this is especially true of demonstrable, performance-dependent incentives (7). This data suggests that enhancing intrinsic motivation may be necessary to improve an intervention's sustainability and to minimize reliance on monetary rewards.  

Here are four ways organizational wellness programs can make better Cents of a physical activity incentive:

Clearly articulate wellness as a core value of the organization

Communications strategies may play an important role in generating motivation among employees as messaging from executive leadership can help set a tone that engenders wellbeing as an organizational standard (11). Studies have shown that organizations with a clearly articulated wellness campaign were able to invest significantly less on financial incentives (4). Communications should be carefully tailored and targeted, with optimum timing, frequency, and placement.

Tie incentives to social responsibility

Another strategy for implementing a sustainable physical activity program is reinforcing exercise behavior with a charitable donation. Implementation of a donation-based exercise promotion program may be particularly appealing as it could assist the participant by promoting feelings of altruism in addition to increasing activity. Meanwhile, the organization creates a culture of social responsibility. In fact, companies like Target and Microsoft have tied fitness challenges to large donations of their employee's choice of charity.

Encourage social interaction through group-based activities and clubs

Research also demonstrates positive correlations between social support and exercise (12). In fact, social interaction is one of the most commonly cited reasons for individuals to engage in exercise (12). Therefore, promoting physical activity programs that encourage greater socialization and a supportive peer network may be an effective strategy to influence positive behavior change. Implementing team-based physical activity challenges may help employees develop better interpersonal relationships, which comprises a vital dimension of health and well-being. Team-based wellness is also more fun, stays relevant, and creates accountability, and in turn, increases both frequency and time spent engaging in physical activity (12).

Consider demographics and gauge baseline activity

Nationwide about 54 percent of adults are getting the recommended amounts of aerobic activity (3). The percentage is slightly higher among those under 65 years of age (3). Furthermore, the likelihood of achieving physical activity guidelines uniformly increases with one's educational attainment (8). Therefore, the opportunity to improve the overall physical activity of an employee population may differ depending on the demographic characteristics of the particular workforce. Thus, it's important to gauge whether the incentive attracts individuals who are inactive and more in need of physical activity or whether they merely throw "easy money" at those who are already active. If enrolment in programs is dominated by active employees, then they are unlikely to be a good use of resources. It would be prudent for employers to identify the unique demographic characteristics of their workforce and apply an economic model to help quantify the costs and benefits of various incentive options to determine the greatest value for achieving and sustaining healthy physical activity behaviors.  

Bibliography:

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2. Center for Disease Control. (2015). Physical Activity and Health. Retrieved from cdc.gov: https://www.cdc.gov/physicalactivity/basics/pa-health/index.htm. February 24, 2018
3. Center for Disease Control and Prevention (2018) National Health Interview Survey: Early Release of Selected Estimates Based on Data from the National Health Interview Survey, January- September 2017 Retrieved from: https://www.cdc.gov/nch/data/nhis/earlyrelease/EarlyRelease201803_o7.pdf May 6 2018
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Tringali, V. and Giandonato, J. (2017). Engendering Active Living on College Campuses, Campus Rec. Magazine. June 2017