Losing Cash Motivates Better Than Rewards When Losing Weight

By Rita Pyrillis

May. 9, 2016

When it comes to fitness, employees would rather lose pounds than cash, according to a recent study that found that punishing people for failing to meet their weight goals puts more pep in their step than offering them a reward.

In the study by the Perelman School of Medicine at the University of Pennsylvania, 281 participants were given the goal of reaching 7,000 steps per day over several weeks.

They were divided into four groups: a control group that received no financial incentive; a group that got $1.40 for every day they achieved their goal; a group that could enter a daily lottery to win a prize that averaged $1.40 each day; and a group whose members got $42 cash upfront and had $1.40 deducted for each day they failed to log enough steps.

It turned out that the group under threat of having to pay the money back did far better than everyone else.

Those who ran for rewards or were entered in a daily lottery were no more successful than the control group where participants reached their goal about 30 to 35 percent of the time, according to the study. But participants who risked losing the reward met their goal 45 percent of the time.

David Roddenberry, CEO of HealthyWage, a wellness firm that designs incentive programs, said these results point to the effectiveness of using both sticks and carrots to motivate employees. The idea that losing something outweighs the pleasure of gaining something is a proven principle of behavioral economics, yet few employers embrace it.

“Lost aversion principles have been proven in many settings, but they are so rarely incorporated into the design of employee wellness programs,” he said. “People are afraid to use penalties, but if you’re going to utilize an incentive-based approach, you should try to incorporate the stick.”

Whatever tools are used, Larry Boress, president and CEO of the Midwest Business Group of Health, said employers need to find the incentives that work best for their unique workforce.

“Some will respond to water bottles, others want cash or savings,” he said. “Regardless of what you use, the incentive will only get you in the door. The ultimate challenge is how to get people to continually be engaged in their health.”

Rita Pyrillis is a writer based in the Chicago area.

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