Effective incentives reward behaviors, not outcomes

While incentives are best for providing extrinsic motivation, it is worth asking whether or not they can influence the intrinsic drivers of sustained change. The answer appears to be a resounding “maybe.” First, it depends on the type of incentive. Most employers favor monetary incentives – a bonus, for example, or a reduction in the share of coverage costs paid by the employee. However, while money can certainly serve as a powerful motivator, it tends to function extrinsically. Given this, the other things that might function as additional rewards should be evaluated, such as positive recognition among peers or supervisors, charitable contributions in place of monetary prizes, and more.

Arguably more important is the question of what the incentives reward. The impulse is often to reward people for reaching desirable benchmarks, such as a target BMI or cholesterol. But again, the transactional form of “reach a benchmark, get a reward” (or for that matter, “miss a benchmark, get punished”) fails to address long-term, intrinsic motivations. Dr. Goetzel recommends, instead of rewarding outcomes, reward behaviors. The best incentives – “smart incentives,” as he calls them – aim to reward people for habits that stick long term, not for changes in the short term. Even if outcomes determine healthcare costs (or savings), healthy behaviors, and not just biometric benchmarks, should be the goal.