Psychological research suggests that the stick works better than the carrot.
Corporate wellness programs seem like a win-win idea. In order to get employees to exercise more and take care of their health, businesses can simply reward them with bonuses if they reach a certain number of steps walked or calories burned. Right?
Not exactly, according to a new study out of the University of Pennsylvania. Instead of rewarding workers with cash or other perks for reaching a fitness goal, employers might instead giving out money upfront, and then incrementally take it away from those who fall short of their goals.
The prospect of losing money for not exercising can directly motivate workers, according to the study, published earlier this week in the Annals of Internal Medicine.
Mitesh Patel, one of the researchers, explained a central tenet of economics and human behavior: “We know that people are irrational, and that they respond more to loss than gains,” he said. “People want to avoid the feeling of losing something they feel they already have. That can be very motivating.”
In order to test this out, the research team enlisted a group of 281 slightly overweight workers and asked them to walk 7,000 steps a day. One part of the group received $1.40 each day they hit the goal; another was entered into a lottery to win $5 or $50 if they completed the 7,000 steps; and the third set of participants received $42 at the beginning of the month, with $1.40 deducted every day they missed their goal. A control group got only feedback on their exercise and no financial rewards or penalties.
The cash incentives lasted over the course of 13 weeks. During that period, the group whose money could be confiscated actually performed better than the others — which caught the researchers by surprise. They also didn’t think they would observe such similar results between the people who got paid to exercise and the ones who didn’t get paid at all.
Here’s how the results broke down: participants in the penalization group made it to 7,000 steps nearly 45% percent of the time. Those who were offered a award achieved it just 35% of the days, and participants in the lottery group hit the mark 36% of the time. The people merely got feedback made their goals 30% of the time.
As an interesting note, participants in the loss incentive group didn’t actually get the $42 upfront. Rather, the researchers sent a check to everyone at the end of the month. The money used for the study was merely deducted from an imaginary account, showing that the psychological fear of losing money is quite powerful.
The researchers hope that the data will help employers devise more effective strategies to make their employees exercise. Conventional wellness programs typically follow the reward approach, such as offering to supplement gym memberships or giving cash or other material prizes for reaching weight or blood pressure goals. But if penalties are even more effective in getting people to work out, why not try them?
“If we’re going to use incentives, we should think about how it’s designed and incorporate behavioral economics,” Patel said.
The question has widespread implications. Nearly half of U.S. companies have wellness programs in place, a large number of which include outcome-based goals like losing weight or lowering cholesterol levels. Their actual effectiveness is contested: Some studies argue that they don’t measurably improve the health of participants.
Moreover, when employers start focusing on the importance of workers taking better care of themselves, some are concerned that the burden of the health care costs get displaced onto those who are less healthy. And there is also fear that such programs could violate employee privacy. In 2014, CVS was sued by one of its employees for allegedly making her provide her weight and sexual activity under a health screening program or pay $600 a year if she opted out.
And while offering incentives to improve health seems to come from good intentions, the underlying message should be that a company is encouraging a culture of healthy behavior. Nobody wants to be overworked, stressed and, above all penalized for falling short of their daily step quota. That’s pretty demoralizing — and won’t solve problems either.