Using Incentives to Increase Employee Engagement

A healthy workforce is a productive workforce – that much has been demonstrated time and time again. However, just because a company has a wellness program in place doesn’t mean that employees are driven to participate. 

Employers are increasingly embracing the use of incentives to promote participation in wellness programs in the workforce, with various ways of measuring success. Incentives are not a cure-all and should not be the only thing enticing populations to participate in health management programs. It is important to develop a quality program that helps employees achieve health goals in a positive, motivating way. 

Engaging programs establish a two-way dialogue with participants, getting them to share information about themselves, identifying levels of risk, and following up with targeted, relevant and effective program interventions. 

Before determining what to offer, or how much, organizations should identify the end goal. Is it return-on-investment? Improved productivity? Improved attendance? Reduced claims costs? 

Three common and measurable goals are employee participation, employee behavior change and outcomes. Of these three goals, outcomes are easiest to link directly to health care costs, yet it can be challenging to link incentives to outcomes. It is much easier to tie incentives to participation, but doing so does have its drawbacks. 

First, individuals may do the minimum only for the short-term, incentivized reward. 

Second, without tying the incentive to the impact a health program has on participants, continuing incentives may be difficult to justify. In the long-run, the most effective approach with incentives combines ongoing engagement and feedback from participants through surveys and an online tracking system. Linking incentives to individual health outcomes is the next step in tying incentive investments to customer end goals. For example, rewarding participants who maintain a health risk score or who improve their health risk. 

However, tracking and tying incentives to outcomes can present legal issues. Relevant legislation includes HIPAA, the Americans with Disabilities Act, the Age Discrimination in Employment Act, COBRA, and ERISA. So what are appropriate incentives? They can range from $2 cafeteria vouchers to $2,000 in benefit cost reductions for a single employee. 

Locally, Medtronic has used an extensive incentive program to increase participation in its Total Health program to around 90 percent, up from 40 percent a couple of years ago. More than 8,000 employees are now in coaching programs, and Medtronic estimates that the program will save $100 million in preventable health care costs alone over the next 10 years, with additional savings in productivity and overall well being. 

As powerful as they can be, incentives that are too lucrative may create administrative complexity or tempt employees to cheat the system. 

Measuring a return that justifies the investment can also be difficult. One rule of thumb Healthways shares with customers is that incentives worth about $200 – awarded for two, $100 “events” – work well for many types of programs. Knowledge of the targeted population is critical when determining what and how much to offer. 

The key is communicating with employees at open enrollment time and throughout the year about the program, its intent, its rewards and opportunities to access it. 

As health care information systems become more integrated, employers and health plans can explore offering even more customized rewards to individuals based on their health risk factors, goals and interests. Offered within an environment that supports healthy decisions and delivers individually focused support, these kinds of meaningful incentives will continue to help maximize program engagement.