Are Cash Incentives Worth the Money?

It’s a tough question many well professionals struggle to answer: do we offer cash rewards to employees as a means to incentivize physical activity in a population?

The answer depends on your ultimate goal. If you are looking for short-term adherence to activity goals or a means to trigger an interest in long term behavior change, cash can be a great enticement. If your goal is to achieve long-term adherence, you are going to need deep pockets.

In this study, funded by the Singapore Ministry of Health, office workers in Singapore were tasked with weekly step goals and randomly placed in four groups: a control group with no activity tracker and no offered incentive, another with just an activity tracker (no incentive) and two other groups, one provided with a cash incentive and the other rewarded by a contribution to their favorite charity when they met their goal.

The objective of the study was to provide evidence that activity trackers are able to increase physical activity and to explore whether pairing an activity tracker with (or without) incentives further boosts an increase in physical activity.

They found that indeed, the group receiving a cash reward saw the biggest jump in exercise. There was a similar but only slight increase in both those using fitness trackers paired with charitable donations and those without any incentive.

At six months, the extrinsic motivation ended and the monetary incentives were removed. Participants were asked to continue to meet their exercise goals because it was good for their health. The organizers then checked the activity habits of their study population six months later.

They found the cash incentive group was now exercising the least and their activity levels dropped below those of the group possessing a fitness tracker but receiving no incentives. Activity also dropped in the group rewarded with funding to their favorite charity.

In short the study suggests monetary rewards are good for adherence to a short-term goal but are not a sustainable vehicle for creating any long-term motivation.

This is not surprising since we already know extrinsic motivators like rewards, competition and praise lead to short-term results. This may not be all bad since short-term motivators can be a good first step towards establishing more sustainable intrinsic motivation.

The holy grail of wellness programming is to spark that short-term motivation into a bonfire of intrinsic (and less expensive!) inspiration.

If you are developing your incentive program for the upcoming fiscal year, consider taking a long-term vision in your planning and create incentive plans that create enduring motivation. If short-term rewards are a part of your program structure, consider layering them with techniques that drive long-term success.

For more ideas on how to encourage intrinsic motivation in your employees, please check out our previous post: Motivate Your Members For Long-Term Success.

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