Do you use a carrot or stick to incentivize your employees?

Written by
Peter Dunn

You know a happy and healthy employee is a more productive employee. You probably also know an unhappy and unhealthy employee can cost the company money, especially when you factor in the cost of healthcare. So how can you incentivize your employees to take care of themselves? You have two options; dangle a carrot or hit them with a stick. Well, not literally. The carrot or stick approach has been around for a long time, but it's newer in the workplace. It takes the form of wellness programming. For the past 20-30 years employers have been offering incentives or disincentives to their employees to encourage them to be healthier people. The programs range from smoking cessation initiatives to personal financial wellness courses.

Here is an example of the difference between a carrot approach and a stick approach:

Carrot/Incentive Approach: All your employees have the same premium, but those who don't smoke receive a $100 discount on their premium.

Stick/Disincentive Approach: All your employees have the same premium, but those who do smoke have to pay an extra $100 toward their premium.

I recently interviewed Paul Ashley of First Person Advisors on The Pete the Planner Radio Show on WIBC about his thoughts on this topic. Paul has vast experience in this area, so take a listen to hear his thoughts which go beyond just a standard definition.

I personally found his thoughts on extrinsic versus intrinsic motivation interesting. It reminds me a lot of parenting. Sometimes you need to extrinsically motivate your child to do something, with the hopes that someday they will develop the intrinsic motivation to do it on their own.

Have you found the best way to motivate your employees? Share in the comments!

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