Employee wellness programs are popular among businesses seeking to increase productivity and cut health care costs. However, many firms have struggled to reap those benefits due to low employee motivation. New research from BYU accounting professors finds evidence that the problem may lie in how the employees are choosing to reward themselves.
Previous research shows that when choosing between different incentive options, employees prefer cash rewards. According to Bill Heninger, Steve Smith, David Wood’s study published online in Management Accounting Research, cash might not be the most effective incentive. Its replacement? Gift cards.
“You would presume that when people pick the reward type that is the most appealing to them, it would have the most motivational power,” Smith said. “But that wasn’t the case. Employees choosing to be rewarded with gift cards actually reaped the greatest health benefits. So the way you are choosing to incentivize yourself may not hold the strongest motivational power.”
For the study, researchers tracked an institution that rewarded employees for completing six-week “wellness challenges.” Participants were able to choose which reward they would like upon completion: a cash bonus on their paycheck, a gift card, or a tangible reward of equal value. About 60 percent of the participants chose cash rewards, 30 percent selected gift cards, and 10 percent chose the material good. Though cash was chosen more frequently, people who selected gift cards were approximately 25% more likely to complete a wellness challenge than the other participants, holding other relevant factors constant.
Read more at BYU