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Paid Off for Good Behavior?

Yesterday’s Today Show featured a piece by Matt Lauer and Jean Chatzky on some companies that have taken to giving employees cash incentives to prompt behaviors such as quitting smoking or booking business flights in coach vs. first class.  One company in Philadelphia has even gone so far as to pay people with high blood pressure to take their medication each day.  The thinking behind these programs is that the prevention of certain behaviors (i.e. spending too much on airfares, costly hospital visits, unplanned time away from work, etc.) is a small price to pay for the costs incurred if these habits are not broken.

Matt brought up some good questions that we in the rewards and recognition industry often encounter: what happens once you take the incentive away?  Does the employee revert to the old behavior?  In the case of Energizer, who awards the employee half the difference of the airfare between coach and first class—are you not just encouraging employees to take more trips?

To take it a step further than they did in the piece, there are many pitfalls associated with assigning concrete cash values to certain behaviors, as we found out first-hand during our healthcare roundtable earlier this year.  Everyone has a different idea of the value of a dollar, and to some, the amount a company pays for a certain activity may not be worth it.  Not every company has the budget of Energizer, or GE, who pays employees to stop smoking.  You also have to consider the message you are sending: rather than putting out a universal set of company-wide values and rewarding those who exemplify them, you are paying people to avoid behavior that is harmful to themselves and the company.  And in these situations, does everyone in the company have an equal chance of earning these cash rewards?  What about those with healthy blood pressures, who don’t smoke, and who aren’t required to travel?

It might be far more effective in the long term for a company to come up with an overall recognition strategy incorporating several initiatives so that everyone can get in the act.  Having a comprehensive strategy that rewards employees for exemplifying the company’s mission, vision, and values with non-cash awards will change the culture at your company rather than just keeping undesirable behaviors at bay temporarily with additional income, which is soon spent on bills, groceries, and other necessities—and forgotten.  How likely is an employee to tell his or her peer, “Hey, look at this $500 check I just got for booking a cheap ticket!”  It’s much more likely that same employee would say, “Hey, look at this great gift I ordered for my son through our rewards program, just for booking a cheaper flight!”  Now that other employee will be encouraged to replicate that behavior…and possibly tell others.

What do you think?  Does your company offer cash incentives—if so, do you find it effective?