Should employers be involved with employee wellness?

There are a number of ways to approach this question and as such I do so with caution. Ethically, this is a gray area. Legally, this is a slightly less gray but still shady area. But, economically- this is a clear area.

In general, when employers invest in a wellness program, they see a reduction in spending on employee illness. See the chart below:

Workplace Wellness Programs Study: RAND Corporation

I want to point out that the benefit of implementing a workplace wellness program is not always going to be dollars saved. One non- monetary advantage is reduced employee absenteeism. Another perk is happier employees which leads to higher retention rates. Although the lack of immediate ROI may seem like a poor use of resources- allocating effort and funds to workplace wellness will positively effect the bottom line.

I am well aware of the potential risks employers take when choosing to get involved with their employees’ wellness. From anti-discrimination laws to data protection and privacy, there is a lot of regulation that needs to be followed. However, the fact that something is complex should never be a reason for not doing it. In my opinion, it is all the more reason to learn about the subject and determine how to engage in it better than anyone else.


There are different types of wellness programs you can put in place as an employer. Choosing the right combination of elements is crucial to be sure that employees actually use it. Put another way: implementing a workplace wellness program that no one uses, is kind of like a tree falling in the forest with no one around to hear it, did it happen? Does anyone care? No and no.

The motivations of humans are interesting and can essentially be broken into two categories: rewards and punishments. Both types of incentives are easy to apply to workplace wellness programs. Consider the following examples:

Rewards: gym membership reimbursement for employees who adhere to a pre-determined attendance frequency, monthly health insurance discounts for employees who “pass” biometric screening tests, cash bonuses for employees who participate in coaching programs designed to improve fitness, etc.

Punishments: higher premiums for employees that choose to not participate in the program, lowering contributions toward employee health plans if they don’t “pass” the biometric health screening, financially penalizing employees who smoke or consistently fail to fill scheduled prescriptions, etc.


The key to developing an incentive program that works lies in understanding how to motivate people to respond correctly. Often we think that warning of illness, chronic disease, or loss of life will be a strong enough stimulus for action- but it turns out that this is the exact wrong thing to do.

In her book, The Influential Mind, author and neuroscientist Tali Sharot provides a brilliant example of how the warning of threat is ineffective in getting people to take action in cases such as these. She tells a story about a hospital in the Northeast. This hospital’s staff was only washing their hands a shocking 10% of the time (at best). There were signs issuing warnings for non-compliance, easy to use hand sanitation stations… but absolutely nothing they had done made these doctors want to wash their hands.

So, a group of researchers got together and decided to install cameras throughout the hospital’s worst performing unit. All of the employees, doctors, nurses, and caregivers knew they were being recorded and they knew they were required to wash their hands between each patient visit- yet, compliance rates barley moved and remained distressingly low.

They were about to give up but decided to try one last thing. The researchers installed electronic boards in the hallways for everyone to see. Each time someone washed their hands, they would get a public “good job” as the score on the electronic board would increase. Within days the hand washing rate shot from 10% to almost 90%. The results were so unbelievable the researchers had to replicate the experiment within a different unit of the hospital and, like magic, they got the same results.

So, what does this anecdote have to do with workplace wellness programs? Stay with me. If you think about the way hand washing had been advocated for- prior to the electronic leaderboard, you will notice that it was mostly consequential punishment. If you don’t wash your hands people will get sick. If you don’t wash your hands you will get fired. Inducing fear doesn’t work in these circumstances because people are motivated to take action to seek out pleasure and freeze to avoid pain (think a deer in headlights).

If you would like someone to take action- you need to motivate them with the promise of positive rewards. The more immediate the rewards the better. This could mean giving employees a $5 credit toward their health insurance premium for every gym check-in or reducing their monthly premium by 30% automatically upon their successful completion of a health assessment. There are a million different plans and benefits that can be provided, but the one thing they should all have in common is that they need to promote the anticipation of positive rewards rather than threaten negative outcomes.

Endlessly curious about the human condition. Founder of Studio Upstart. Chief of Staff @ Untapped Ventures.

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