Employees paid to lose weight: A win-win situation?

More and more companies are paying its employees to lose weight, and a new study found that the golden carrot works, especially when it’s a generous payout.

An estimated 58 percent of large employers are using financial incentives to encourage their employees to participate in healthy lifestyle activities in an attempt to decrease the incidence (and cost) of chronic disease. This approach may become more widespread in the next few years, thanks to ObamaCare, which allows employers to use a greater proportion of insurance premiums for incentives.

Economic incentives on preventive behaviors such as immunization, smoking cessation and exercise have been effective at changing behavior in 73 percent of studies, but when it comes to weight loss, the research is less convincing.

A new study, published in the Annals of Internal Medicine, tested two approaches to rewarding employees for their weight loss. In one arm of the study, individuals would receive $100 at the end of each month (for 5 months) if they met a prescribed weight-loss goal for that month.

In the second arm, participants were randomly assigned to a group with five members in it. The group had a pooled incentive of $500 per month that would be divided evenly among every member in the group who met their weight-loss goal that month. So, if only two people in a group met their goal, they would each get $250 for the month, while the other group members would get nothing. By the way, the group members had no way of learning each other’s identities, so they couldn’t sabotage (or help) each other.

Those in the group had the greatest success. At the six-month weigh-in, they had lost an average of 10.6 pounds compared to dieters in the individual arm, who lost 3.7 pounds and the controls who only lost 1.1 pounds. Those in the group received an average of $514.70 over the five months, whereas individuals received an average of $128.60.

The authors theorized the possibility for a greater reward was probably the biggest motivator, especially if they got a larger share of the pot within the first month or two. But those in the group may have also been worried that others in the group would get more than they would if they didn’t meet their goal—a form of peer pressure.

The authors also proposed that frequent monthly rewards may be more effective than say, a bi-annual or annual reward. In an accompanying editorial in the journal, Jason Riis of the Harvard Business School, wrote this is a common rule of behavioral treatments.

Frequent and tangible rewards are more motivating than distant and intangible rewards.  Still, it’s not known whether people will keep the weight loss off once the incentives stop. And economist John Cawley of Cornell University has found that people lose more weight when they fear that money will be taken away from them—in this case, the incentive is avoiding a penalty.

If your company doesn’t offer weight-loss incentives, you can sign up for a program on your own. Healthywage designs and organizes a number of different weight-loss challenges and contests in which participants can win money for losing weight. In one, you pay a $150 fee to participate. If you lose 10 percent of your body weight over six months, you win $300. But be careful: If you don’t, you lose your money—gulp!