As organizations search for ways to improve the health and wellness of employees — leading hopefully to improved productivity and fewer issues around absenteeism, stress, health-care costs and disability — the use of financial rewards to encourage staff participation is on the rise.
One-quarter (26 per cent) of 335 Canadian employers surveyed by Towers Watson are planning to offer this type of reward in 2012 — up from the 13 per cent that currently do so.
And 52 per cent of organizations offer these kinds of incentives at least some of the time, according to a Sun Life survey of 677 Canadian employers.
“It’s an area that’s getting much more attention and interest as programs develop,” said Lori Casselman, associate vice-president of health and productivity solutions at Sun Life Financial in Toronto, adding part of the increase can be explained by the growth of wellness programs and employers being more strategic.
“(There’s) a big focus on driving participation and driving outcomes and a lot of research, both in Canada and the U.S., demonstrates that a way to drive participation, drive outcomes is to attach incentives — it’s part of a best practice approach.”
The use of incentives is really on the rise in Canada, according to Julie Holden, leader of Towers Watson’s health and productivity practice in Toronto.
“Organizations that are using financial incentives for health-related programs are reporting participation goes up, generally from 19 per cent for those that don’t use them to 46 per cent (for those) that are using them.”
But when employers provide incentives, they may not be doing it the right way by tying them to achievement, said Randy McCaig, product management director at Medisys in Montreal. Attendance at a nutrition seminar, for example, does not really lead to an action.
“If (employers) want to make a change within the employee base, they have to tie it to incentives, so incentivize for behaviour.”
For example, with a weight-loss competition, employers can put money into participants’ health spending accounts each time they participate.
One area where employers should definitely offer incentives is health-risk assessments (HRAs) and baseline assessments, so employers have solid numbers to work with when looking to start a new program, such as smoking cessation, said McCaig. “That’s where they’re going to get data from. That’s the best place to incentivize, is right upfront.”
HRAs or screening clinics also make employees more aware of their health risks, said Casselman.
“They get that personal information, it increases their level of awareness and they’re that much more likely to participate in behaviour change or education initiatives that follow.”
But it’s recommended employers take either an annual or three-year approach to the planning and development of a program and, with that in mind, “really consciously think about budget, key initiatives, what type of program and attach incentives to the right programs that are really going to really drive the highest impact,” said Casselman.
The most effective incentives, according to Sun Life’s survey, are draws for prizes (60 per cent) and paid time off to attend wellness initiatives (26 per cent), followed by cash (19 per cent), personal time off (18 per cent), logoed goods (15 per cent) and health-care spending account credits (11 per cent).
The types of incentives to offer really depend on company culture, said McCaig, and there are pros and cons to each.
Introducing the right incentives at the right time can also play an important role in motivating employees. For example, while giving employees $20 to complete a screening clinic can produce high participation to start, it may not drive participation in future initiatives, he said.
And giving out a new TV or MP3 player might have a high perceived value and long shelf life, but only giving out prizes to a few winners can be a de-motivator.
On the flip side, penalties or disincentives around undesirable employee behaviour are not popular in Canada, unlike the U.S. Of course, the two countries have very different health-care systems but it’s also not “the Canadian way,” said Holden.
“Our legislation, such as confidentiality legislation and human rights legislation, really does prohibit those types of programs here in Canada.”
While there is some talk about taking this kind of approach in Canada — such as requiring employees to participate in an HRA to gain access to group benefits or dollars in a flex account — it’s less likely, said Casselman.
“We have a culture of a volunteer approach rather than a mandatory approach.”
Having not seen any activity in that area, McCaig said it should be avoided “like the plague.”
“It’s a de-motivator and to take something away from an employee based on what they’re doing, what they’re not doing, it’s not necessarily the best way to keep the employee base motivated.”
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