Monetary Penalties Provide Incentive for Employees to Get Healthier

The Annals of Internal Medicine published a study showing that employees are more motivated to exercise when financial penalties are associated with their progress compared to earning cash rewards or not receiving any incentive. The researchers found that people respond more positively to losses than gains, due to a concept known as “loss aversion.” The workers who thought they would lose money if they didn’t reach their goals achieved their objective 50% more of the time than those without any incentive! Similar studies on quitting smoking and losing weight have the same results. This information is important for companies, especially in light of the new restrictions Obama has put on corporate wellness this year. Employees may have to pay higher insurance premiums out of pocket, and employers can use this as an incentive to get their workers into better shape. Employees who are healthier tend to have less absenteeism and more productivity, so it is a win-win situation to get their staff into better shape!

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