The "Skinny" on Financial Incentives for Exercise Programs

Article excerpt

Much has been written about poor diet and lack of exercise and the health threat they pose to millions of Americans in the workplace. However, despite growing interest among employers in instituting financial rewards for exercise and other healthful behaviors, research on whether workplace incentives are effective in promoting such behaviors is limited.

In "Incentives, commitments and habit formation in exercise: evidence from a field experiment with workers at a Fortune-500 company" (National Bureau of Economic Research, working paper no. 18580, November 2012, http://www.nber. org/papers/w18580.pdf?new_win dow=1), authors Heather Royer, Mark F. Stehr, and Justin R. Sydnor help add to our knowledge of the usefulness of financial incentives with their report on the results of just such a program introduced at the Midwest headquarters of a Fortune 500 company. The program was designed to obtain long-term, rather than temporary, behavioral changes. The goal of the study was to measure those changes.

The program consisted of two stages. In the first stage, a group of 1,000 randomly selected employees was paid $10 for each visit (up to 3 visits a week) to the company's exercise facility during the course of a month. In the second stage, some of those completing the program were made no further offer. Others, however, were offered a self-funded "commitment contract," in which individuals pledged an amount of their choosing that they would continue to use the gym for an additional 2 months. If an employee kept the commitment, all money he or she pledged was refunded; if not, the money was given to the United Way.

The authors note that this study was the first to test the effectiveness of commitment contracts as an extension of an incentive program, rather than being a stand-alone program, to a broad population. The study produced the following notable findings:

* Employees responded very positively to financial incentives. …