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Soft Competition + Cash Incentive = Improved Wellness

Soft Competition + Cash Incentive = Improved Wellness

A new study from the University of Pennsylvania suggests motivational techniques including friendly competition and receipt of a financial incentive appear to be the best method to improve wellness.

In particular, researchers discovered comparing performance to average peers (the 50th percentile), and offering financial incentives was the most effective method for increasing physical activity among teams of employees.

Perelman School of Medicine researchers found that different combinations of social comparison feedback and financial incentives can lead to a significant difference in outcomes within workplace competitions.

Results appear in the American Journal of Health Promotion.

“Many employers are using workplace competitions and financial incentives to encourage physical activity and other healthy behaviors among their employees.” said lead author Mitesh S. Patel, M.D., M.B.A., M.S.

“Our findings demonstrate that careful testing can help make these efforts more successful by applying concepts from behavioral economics and combining social and financial incentives.”

In the study, 288 employees, grouped into teams of four, were asked achieve at least 7,000 steps per day. Participants used a smartphone app to track their steps, and each week received feedback on how their steps — and their team’s — stacked up to peers.

In one area or arm of the study, researchers divided the participants into two groups with each group told how they did compared to the average (the 50th percentile).

One of the groups also received financial incentives while the other did not.

In the other two arms, teams were told each week how their performance compared to the top quartile (the 75th percentile). One of these arms also received financial incentives while the other did not.

In the financial incentive arms, each week, each team member had an 18 percent chance of winning $35 and one percent chance of winning $350, but they could only collect the winnings if they won the lottery and their team averaged at least 7,000 steps during the past week.

Financial incentives were offered for 13 weeks and then participants were followed for an additional 13 weeks. Social comparisons feedback was delivered for the entire 26 weeks.

Results of the study revealed that employees who received feedback comparing their performance to the average participant (the 50th percentile) and financial incentives achieved exercise goals at the highest rate (45 percent of the time) during the intervention period.

Employees who received feedback compared to the top performers and incentives achieved the goal 38 percent of the time, followed by those who were compared to the average participant but did not receive incentives, (30 percent).

The team who received feedback comparing their performance to the 75th percentile and did not receive financial incentives achieved their goals only 27 percent of the time.

“While many employers are interested in making wellness efforts more social to increase engagement, based on our findings there is a significant opportunity to go further and improve outcomes by better designing these competitions,” said senior author David A. Asch, M.D., M.B.A.

The authors found that 95 percent of employees stayed engaged in the study even during the follow-up period and suggest this could be due in-part to the smartphone-based approach to data collection, since many people carry their phone with them wherever they go.

“Using behavioral economics approaches offers the potential of generating truly innovative approaches for promoting healthy behavior,” said co-author Kevin G. Volpp, M.D., Ph.D., professor of Medicine and Health Care Management.

“This study highlights that social- and financial-incentive-based approaches can be combined to achieve better outcomes.”

Source: University of Pennsylvania

Soft Competition + Cash Incentive = Improved Wellness

Rick Nauert PhD

Rick Nauert, PhDDr. Rick Nauert has over 25 years experience in clinical, administrative and academic healthcare. He is currently an associate professor for Rocky Mountain University of Health Professionals doctoral program in health promotion and wellness. Dr. Nauert began his career as a clinical physical therapist and served as a regional manager for a publicly traded multidisciplinary rehabilitation agency for 12 years. He has masters degrees in health-fitness management and healthcare administration and a doctoral degree from The University of Texas at Austin focused on health care informatics, health administration, health education and health policy. His research efforts included the area of telehealth with a specialty in disease management.

APA Reference
Nauert PhD, R. (2018). Soft Competition + Cash Incentive = Improved Wellness. Psych Central. Retrieved on September 27, 2020, from
Scientifically Reviewed
Last updated: 8 Aug 2018 (Originally: 18 Jul 2016)
Last reviewed: By a member of our scientific advisory board on 8 Aug 2018
Published on Psych All rights reserved.