One company admits to simply making up the $500 dollar per year figure because, “It just sounded right to us.” I am not a psychologist, but I have read a lot more on psychology than these companies. From what I have read, the perfect amount to offer employees is: $0 per year.
From what I have read, the problem is that the $500 is an extrinsic motivator, and extrinsic motivators actually decrease the amount of intrinsic motivation a person has. Dieting and exercise, in particular, are things that we want people to be intrinsically motivated to do; we do not want people to stop exercising and eating well when the program ends.
But that is exactly what psychology predicts will happens: once the $500 incentive is removed (or maybe even before then), people will actually be less likely to exercise and eat well because of these programs. We think that there are a couple of reasons for this:
- The financial incentive is a bribe that is used to control the employee’s behavior. Although it is given with the best of intentions, people do not like to have their autonomy infringed upon. They may (unconsciously) try to reclaim their autonomy at some point by doing the opposite of what the program intends.
- The employees may come to dislike eating well and exercising because they (unconsciously) come to view them as barriers in the way of the $500.
I applaud the companies for trying to help the employees, but my understanding is that this is an awful way to do it. I do not have great alternatives, although I might start by stocking vending machines/cafeterias/etc. with healthy food. Perhaps an education campaign could help. Perhaps a CEO/manager/whichever powerful people who came up with the financial incentives could instead start a walking program over the lunch hour and invite the employees to join them.
Since this is an education/mathematics weblog, I will end by saying: we should think twice before we bribe our students (with extra credit, free time, or grades) for the same reasons.
(At some point, I will start listing my references to this stuff, but I am lazy/busy today. And, as always, I welcome psychologists to correct my interpretation of the research—Pam?)