For employers who are trying to promote their employees’ participation in employee health management (EHM) initiatives, there is always the choice between positive and negative incentives, or carrots vs. sticks. By far the most common approach has been the positive kind, with incentives offered and rewards paid for participation in specific elements of an EHM program, such as in a health risk assessment or focused lifestyle change initiative. In some cases, rewards are offered for specific behavior changes, such as smoking cessation, or health status changes, such as weight loss, blood pressure or cholesterol reduction.

There are numerous regulatory limitations and even prohibitions that affect what employers can do with incentives, including limits on the amounts involved, and requirements for non-discrimination. But there also seem to be serious questions regarding the effects of using “sticks”, as contrasted with “carrots” at all. One of the more famous case examples has been that of Clarian Health in Indianapolis. It had been trying to promote employee health for some years using positive incentives, and felt a negative approach might work when positive rewards failed.

It announced a program under which employees who did not meet minimum standards — for tobacco use, body mass index, blood pressure, glucose and cholesterol – or were not working toward meeting them, would have to pay as much as $30 extra per paycheck for their health insurance. When employees strenuously objected to his new policy, focusing mainly on the penalty rather than the goals of improved health, Clarian wisely decided to change the penalty to a reward for those who did meet standards or were striving to do so. [S. Rubenstein “Fines for Bad Health Set Off Employee Backlash” Wall Street Journal Online Feb 11, 2008]

Other employers have adopted a somewhat indirect approach to penalizing unhealthy behaviors or conditions by raising employees’ share of premiums, deductibles or co-insurance/co-pay amounts, then offering to forgive some or all of the increase for those who meet healthy standards. This usually is interpreted as employees as a punishment, since it equally deprives them of something they used to get, namely, higher levels of employer contributions.

It should be no surprise that employees object to being punished for unhealthy behaviors or conditions. In the first place, many are “addictions” that even when employees have strong intrinsic motivations to quit, such as a previous heart attack or heart surgery, they have difficulty in adopting and adhering to healthier behaviors or reducing risk conditions. Some, such as overweight and addictions, have been linked to specific genetic predisposition factors, for example. Even significant positive extrinsic incentives and rewards may fail in such situations.

It may be wise for employers who wish employees to become healthier give them a number of options for doing so, rather than tie incentives to pre-selected behaviors or condition changes. Smokers, for example, often cost more in productivity losses than in sickness care costs, due to their taking frequent smoke breaks away from their workstations in smoke-free work environments. If they reduce the number or length of their breaks, or prove that they can improve their productivity by working harder when they are at their workstation, they may warrant rewards for that, without quitting entirely.

Since the vast majority of workers, indeed of all people, have many more than one health risk or productivity/performance impairment factor that affects them, giving them a choice of selecting their own goals to pursue, rather than punishing them for not pursuing the one the employer chooses can help as well. If they improve their fitness and reduce their blood pressure, sugar or cholesterol without losing weight, for example, they should deserve a reward for what they do accomplish, rather than be punished for what they do not.

Avoiding even the perception of punishment, which will tend to threaten, rather than improve the most valuable “side effect” of improved health, namely improved productivity and performance, should be a key goal of any EHM program. And rewarding employees for anything they do that decreases their sickness care costs and improving their performance makes sense, since both improve the employer’s own business performance. Punishment should not be the second option if rewards fail, rather a more imaginative and empowering approach to rewards.