At first glance, incentivizing behavior seems reasonable. Many wellness programs, including financial wellness programs, use some kind of incentive to encourage program engagement and participation. But do incentives work? (Photo: Shutterstock)
How can plan sponsors and advisors encourage people to make better financial choices, when these are usually not the most immediately appealing option?
At first glance, incentivizing behavior seems reasonable. Many wellness programs, including financial wellness programs, use some kind of incentive to encourage program engagement and participation. But do incentives work?
And is there a downside to incentivizing behavior? The surprising answer is that while incentives often do work short-term, they can end up de-motivating employees over the longer term. Here's why.
What we know about motivation
Researchers have studied motivation for decades, in an attempt to understand why people behave in the ways that they do. One of the most important things we've learned is that there are two basic types, intrinsic and extrinsic.
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