BEHAVIOR
February 23, 2016

You Couldn't Pay Me to Exercise!

Instead of paying employees to lose weight, it may be better if companies fine them if they don't.

Companies often look for ways to help their employees get healthier — whether out of actual concern for their well-being or to reduce the costs of health insurance. Some even offer financial incentives for employees to exercise.

Reducing the cost of gym memberships or other paid incentives may not work to motivate workers as well as companies hope. In fact, they may be better off charging the employees who don't exercise rather than paying those that do, a new study finds.

When people were told they’d lose their financial incentives if they failed to exercise, they devoted 50% more time to reaching their goals.

Overweight and obese employees of a company were assigned to one of four groups.

  • The first group, the control group, was simply asked to try to get in 7,000 steps per day.
  • The next was asked to do this but told they’d be given a fixed amount of $1.40/day that they reached their goal.
  • Another was told they’d be eligible for a lottery winning if they reached their goal every day.
  • And a fourth group was told that they would lose $1.40 of a $42 sum that was promised to them upfront, for each day that they didn’t reach their goal.
  • There was no difference in exercise between the control group and the daily incentive group. Offering a reward to employees for each day they reached their 7000 step goal didn’t work any better than just asking employees to try to get in those steps.

    But when people were told they’d lose their financial incentives, they devoted 50% more time to reaching their goals than did people in the control group who were simply asked to exercise.

    The study suggests that the promise of future money may not be enough to inspire people to pick up the exercise habit. Framing the offer in a different way may be more effective. Giving employees a reward at the outset may have a greater impact psychologically: Losing money we see as ours feels pretty bad, and this can spur us to act. The promise of gaining something we never had (as in the conventional method of rewarding employees later on) may not be so effective.

    According to the study, 80% of large companies offer financial incentives to encourage their employees to join into company wellness programs. It’s not clear what percentage of employees actually reach the goals that are set forth by their employers or insurance companies. But the study certainly suggests, as many others have, that psychology is a huge factor in getting fit — and figuring out what helps people mentally may ultimately have the biggest impact on us physically.

    The study was carried out at the University of Pennsylvania and is published in Annals of Internal Medicine.

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