Major corporations are promoting employee wellness and safety programs by offering incentives to workers who live healthy lives.
A recent Hewitt Associates Inc. survey found that nearly half of the nation's major employers now offer or plan to offer incentives to employees who participate in wellness or other health-related initiatives, compared with just 38 percent in 2006.
"About 70 percent of chronic illness is impacted by behavior," says Michael Dermer, president and chief executive officer of IncentOne. "Improving employee health lowers costs and increases productivity--a tangible financial benefit for anyone watching the bottom line."
Dermer says companies that use incentive programs typically see benefits from their incentives early on, including increased productivity, fewer sick days and lower health premiums. The incentives don't need to require a big expense, but range from prizes and gym memberships to gift cards and health premium credits.
However, just offering door prizes to employees displaying healthy behaviors isn't enough. IncentOne, a technology consulting company that specializes in incentives-based health solutions, insists there is an art and science to implementing an incentives plan. Questions that companies need to ask themselves before forging ahead include, "Do we offer monetary or nonmonetary incentives? How much should employees be awarded? When should employees be rewarded? For what? And How do we find out about the health challenges of employees?"
In addition to defining the terms and conditions of the program, managers need to define the company's goals for the program.
"Clearly defined goals are critically important," says Sue Lewis, senior vice president of health and productivity solutions for IncentOne. "A company needs to identify what exactly it's trying to achieve and why."
INCENTIVE PROGRAM STRATEGIES
If your company is considering an incentive program, IncentOne offers the following advice:
- Identify what type of behavior you're trying to promote.
Employers should begin by conducting a health risk assessment to help analyze the health and wellness of all of the workers at your company, and analyze the company's overall health by looking at trends in claims data, etc. Companies may then want to ask employees to complete their own health behavior assessment, but be sure to provide an incentive for them to do so. With these assessments, employers can rank employees based on their risk category, such as high-risk, at-risk and low-risk. Incentives can be matched up with each of the categories to help employees that fall into the low-risk category to maintain their healthy behaviors and motivate the other two categories to prevent them from becoming even more costly for the company.
Companies should also make sure that the program evolves by just focusing on completing an assessment in the first year. The second year can be focused on health management, with goals evolving in subsequent years to encourage employees to focus on their own health.
- Understand what will motivate your employees--and what won't.
Some employees value a $100 gift card, but others will more likely appreciate a $250 contribution to a health savings account. IncentOne says companies that do not provide incentives tend to motivate just 20 percent of the employee population to participate in completing assessments. However, researchers say that by having a good communication system plus workplace activities and cash incentives can lead to 50 percent participation. Raise the monetary award to $250 and more than 70 percent of the workers will start focusing on health and wellness.
- Identify your preferred method of incentives.
Lewis says there are different kinds of incentives that companies may want to consider, including nonmonetary awards, monetary awards and health rewards.
- Choose a vendor smartly.
Finding a vendor that can offer everything a company needs to create a great incentives program is important to its success. Vendors should understand your company and know what types of incentives work for employees. They should be able to provide your company with expert advice as well as different types of incentives. Vendors should also administer the incentive processes on a platform that provides the information needed and maintains the program efficiently.
Employees need to know exactly what they're being encouraged to do. Workers can become confused by restrictions that are too complicated, and expectations are often misinterpreted. To communicate, companies should create a platform for all health programs and spend time developing and executing that communications plan. Offer several ways to communicate to employees, such as an employee portal or Intranet as well as written materials and employee meetings.
- Adopt a culture of health in the workplace.
Offer healthy cafeteria options. Allow flexibility so employees can use a gym membership.
December 1, 2007
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