Financial incentives are a hallmark of employee wellness programs; if employees adopt a healthy behavior, they get a monetary reward. But new research published in the Annals of Internal Medicine suggests these incentives are only effective when employers threaten to take them away.

Despite the physical and mental health benefits associated with exercise, more than half of adults in the United States do not get the minimum recommended amount they need to reduce risk of cardiovascular disease and death, according to the study. Physical activity can be especially helpful to those with chronic diseases, including type 2 diabetes, arthritis, and certain types of cancers. And when you consider the adverse effects of sitting at a desk all day, it's no wonder more employee wellness programs are popping up.

Researchers tested the effectiveness of three methods of financial incentives — gain, where a fixed amount of money is given each day goals are achieved; lottery, where employees are eligible for cash each day goals are achieved; and loss, where cash is given upfront and a small amount is removed each day goals are not achieved.

Study participants enrolled in a 13-week intervention were randomly assigned to one of the incentive groups, with each group aiming to walk 7,000 steps a day. Researchers found that the gain incentive group was no more effective than a control group, where people weren't paid to exercise. However, those in the loss group experienced a 50 percent increase in the number of times they achieved their physical activity goals.

"This information may be especially helpful to employers looking to implement workplace wellness programs," according to researchers. A recent proposal from the U.S. Equal Employment Opportunity Commission (EEOC) has considered a similar loss incentive for employee's health insurance. Basically, the proposal would allow employers to penalize employees who fail to meet health criteria.

Workplace wellness programs are becoming increasingly popular; in fact, researchers found more than 80 percent of large employers now use some form of financial incentive to encourage participation. However, little research exists on the efficacy of financial incentive designs. Perhaps these findings will shed some light.

Source: Patel M, et al. Annals of Internal Medicine. 2016.