Gift Cards: The Most Motivational Reward for Wellness Programs, Study Finds
April 11, 2019 by Josh Hrala
Wellness programs are great. They help businesses take an active role in their employee’s health by making a game out eating healthy, exercising regularly, or getting more steps in throughout the day. Those who complete these challenges are often times rewarded, too, via small prizes.
There’s just one problem: people aren’t motivated to partake in the activities.
And this problem mainly comes down to the fact that the small rewards given upon completion of the initiative aren’t all that motivating. So what can employers do to make more of their staff members sign up (and, most importantly, finish)?
According to a new study by researchers from Brigham Young University, the answer is simple: offer more gift cards. Unlike cash, which is the ‘most chosen’ award, gift cards provided more overall motivation to staff members through out the program, leading to more ‘gift card pickers’ to complete the contests.
“You would presume that when people pick the reward type that is the most appealing to them, it would have the most motivational power,” said researcher Steve Smith.
“But that wasn’t the case. Employees choosing to be rewarded with gift cards actually reaped the greatest health benefits. So the way you are choosing to incentivize yourself may not hold the strongest motivational power.”
In other words, you’d think that cash would be the best incentive, right? After all, who doesn’t like more money. However, the twist comes in when you look at who actually completed the wellness objective and who didn’t. Those that picked gift cards were much more likely to actually follow through than those that chose cash.
To come to their conclusion, the team worked with an institution to monitor a six-week wellness program. Before they started, employees were asked to choose a reward for completing, 60 percent of participants chose cash (not shocking), 30 percent chose gift cards, and 10 percent chose a material prize. The team doesn’t say what the prize was, but usually wellness programs give away healthy prizes like juicers and things of that nature. All of the rewards were worth the same amount of money.
In the end, “though cash was chosen more frequently, people who selected gift cards were approximately 25 percent more likely to complete a wellness challenge than the other participants, holding other relevant factors constant,” the university reports.
This suggests that gift cards were more motivational than cash. Why?
According to the team, gift cards act as a middle ground between cash and a tangible good. This creates an ideal balance of fungibility and hedonic value that is enticing.
“Cash is fungible—it can be used for anything,” Smith explained.
“A George Foreman Grill is not fungible, a gift card is not fungible, so from an economic perspective, it makes the most sense to choose cash.” The team goes on to explain that even though cash is great and can be used for everything, gift cards are both fungible and hedonic in a way that both other prizes aren’t.
So, if the team is correct, using gift cards are rewards are more enticing to employees. While this study specifically looked at wellness programs, it’s safe to say that other contest-like initiatives may benefit from having them as a reward, too.
The team’s study helps us to further understand how to motivate employees through wellness programs. It turns out, based on their findings, that the reward provides a lot more motivation that we may have previously thought.
And, if you are struggling to see success with your program, you may want to offer more gift cards next time around.
Hopefully, in the future, more studies will back up these claims and we will further understand how employee motivation works as a whole.
The team’s study was recently published in Management Accounting Research. Read the full study here.
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