The Wall Street Journal printed an article last year that highlighted a trend for employers to switch from voluntary incentive programs to more penal programs to drive healthy behaviors. Companies have spent considerable time and money on incentive programs which often seem to work best for employees who are already committed to healthy behavior. As healthcare costs continue to rise, it is only natural for companies to get a bit more aggressive in their attempts to rein in those costs. The article was written nearly a year ago so there may have been subsequent changes in the Michelin program but at the time it was written, Michelin planned to offer $1000 to employees who met certain healthy standards, which would reduce their healthcare expenditures. Employees who didn’t meet the standards would just pay the normal amount.
I realize this can quickly devolve into a discussion on the Affordable Care Act, employee privacy, chronic conditions, and discrimination so I want to now turn away from healthcare and move to the broader topic of incentives. Specifically do you tend to use a “carrot” or “stick” approach to motivate others? Both may have a place but it is my belief that the stick (i.e. the penal) approach is a short term tactic and unlikely to ever drive discretionary performance. You may remember an earlier post in which I described discretionary performance as the “above and beyond” component that exceeds expectations and is the hallmark of top organizations. The “stick” approach may also drive resentment and even anger.
I believe the “carrot” approach is the better long term strategy. Encourage and reward employees who demonstrate desired behaviors while coaching and mentoring those who fall short. There will always be some element of penalty perceived. Think back to the Michelin employees who didn’t get the $1000 incentive. Do you think they just believed they weren’t getting a reward, or might they have felt punished? While you can’t eliminate that perception, you can soften it through proactive and positive coaching.
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