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The Connection Between Employee Wellness and Recognition Programs

Employers have long known that corporate wellness and employee recognition programs work, but how well they support business objectives has been previously unknown. That is until a recent study was released that provides valuable insight into the connection between employee wellness and recognition programs.

A landmark report was released called Trends in Employee Recognition 2013 based on research conducted by WorldatWork and ITA Group to understand the link between corporate sponsored wellness programs and their influence on employee behavior as a form of incentive. According to this report, for the first time in a decade, “programs to motivate specific behavior jumped to a top-tier goal, cited by 41% of organizations in 2013 vs. 25% in 2008.”

Trends in corporate wellness programs in America

It appears that more organizations than ever before are including some element of employee wellness in their overall compensation and benefit strategy. This is a concentrated effort to curb the costs of health care premiums in light of Obamacare, otherwise known as the Patient Protection and Affordable Care Act of 2010, which requires employers to provide access to affordable health care insurance. As part of this new law, employers have flexible options when offering corporate health programs as part of their overall benefit plans and they may also be eligible for tax breaks tied to offering wellness incentives going into 2014.

How Obamacare influences corporate wellness incentives

The US Department of Labor advised in their 2013 Workplace Wellness Programs Study, that,” the Affordable Care Act raises the permissible limit on incentives for achieving a health related standard from the prior limit of 20 percent of the cost of coverage to 30 percent in 2014”, adding that, “employers with wellness programs designed to prevent or reduce tobacco use to charge tobacco users up to 50 percent more in premiums than nonusers.” This means employers may opt to raise the employee cost of health care insurance for those who do not participate in corporate wellness programs to try and meet certain universal health guidelines. To many employees, this is a powerful motivator to get healthier.

How corporate wellness programs motivate employees

As a whole, incentive programs are leaning towards actively encouraging employees to take responsibility for their personal health and well-being, in the form of corporate wellness resources and programs. The 2013 survey reported that, “70 percent of [the polled] organizations offer between three and six different recognition programs, but the sustainable impact on both behaviors and the overall business varies across program types”. Business are starting to focus more on incentive plans that focus on certain key areas of employee productivity and innovation. Wellness programs can provide a solution for reaching these goals.

Wellness programs vs. traditional incentive plans

Currently, only about 1 to 2 percent of the average organization’s budget actually goes towards employee incentive plans. Traditional pay-for-performance and peer recognition programs have been the foundation of incentive plans for many years. Yet, wellness programs are starting to intercept with incentive plans in that they offer a cost-effective and measurable way to improve the workplace. Corporate sponsored wellness programs also give back to the employees so that they experience the support needed to improve their health and mental well-being.

Corporate health and wellness programs are predicted to increase in use and scope in a vast majority of workplaces over the coming year, as health care and insurance is transformed to meet the needs of a growing workforce.

Tell Us What You Think

Do you think corporate wellness programs are a good incentive at work? We want to hear from you! Leave a comment or join the discussion on Twitter.

More from PayScale

Engaging Employees in Corporate Wellness

The Advantages of Corporate Wellness Programs

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