Canadian HR Reporter

May 2019 CAN

Canadian HR Reporter is the national journal of human resource management. It features the latest workplace news, HR best practices, employment law commentary and tools and tips for employers to get the most out of their workforce.

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CANADIAN HR REPORTER MAY 2019 22 FEATURES BENEFITS Five behavioural economics theories to nudge employees to better health People are people – that means they make irrational decisions all the time By Julie Stich P eople, despite their best in- tentions, often don't make rational decisions when it comes to their health. Just because they know what they should be doing — say, taking a daily blood pressure medica- tion or getting in 30 minutes of exercise most days of the week — doesn't mean they're actually doing it. e consequences of these deci- sions can impact both their health and employers' bottom lines. As employers look to control the costs of extended health care and keep employees healthy, a relative- ly new area of interest has emerged — behavioural economics. is area of study blends the in- sights of psychology and econom- ics to provide a framework for em- ployers to understand employees' decisions and encourage healthy behaviours. Benefi t plan professionals have a heightened interest in encour- aging workers to make rational decisions. But behavioural econom- ics has proven that irrational thought prevails, and employers must adjust communications and group benefits plan design accordingly. Here are fi ve behavioural eco- nomics theories that can help an organization nudge employees to better health. Make the most of inertia Despite having good intentions, people have a strong tendency to not take action. ink of all the subscription services popping up lately — from clothing and snacks to books and pet supplies. ese companies bank on the fact that most subscribers will not take the time or make the eff ort to stop the automatic shipments. It's easier for individuals to continue receiving their monthly boxes than go through the hassle of cancelling the service. With health, as with physics, Isaac Newton's "law" applies — a body at rest stays at rest. Here are a few ways to help employees overcome their ten- dency for inertia to improve their well-being: • Encourage employees to enroll in automatic prescription drug refill programs through their pharmacy. For individuals with chronic medical conditions, automatic drug refi lls can help them more easily adhere to their doctor's medical orders — and perhaps avoid costly and more serious medical conditions down the road. • For employees struggling to fi nd the time to exercise, suggest they set their alarm to go off 30 min- utes early each morning, giving them time to exercise before they come to work. Of course, they may hit snooze three times, but they may actually get up and exercise. And, there's a good chance inertia will keep them from resetting that alarm. • While giving tips to employees who want to eat more health- fully, suggest they subscribe to a service that automatically sends healthy groceries or already- prepared meals to them. If the box arrives on their doorstep, the food is paid for and then it's in their refrigerator, so they're likely to eat it — and not stop the shipments. Show what others are doing right via social norms When making choices, people tend to follow the crowd. Why? Researchers think humans may be wired that way or they demon- strate herding behaviour. In following others, people of- ten believe this will prevent them from making a mistake. If Sarah from accounting tells her friend Amy in sales how helpful the employee assistance program (EAP) is, Amy is much more likely to consider the EAP a helpful resource than if she gets a lengthy email from HR touting all its benefi ts. So, establish social norms by pointing out the positive actions employees are already taking, and encourage more employees to fol- low their lead. Messages like "50 per cent of your co-workers got their flu shot" or "80 per cent of ABC em- ployees participated in a wellness event last year" can help establish positive workplace social norms and encourage specifi c employee behaviour. Couple that with the message "Were you one of them? Don't be left out!" Generally, individu- als don't want to feel like they're missing out on something if ev- eryone else in their workplace is participating. Use loss aversion to prompt employees to act e loss aversion theory states that the potential for loss has a much stronger pull on decisions than the potential for gain. Ac- cordingly, people are highly mo- tivated not to lose. Keep this theory in mind when crafting your communications — fi nd a way to focus on what will be lost by not taking action, instead of what will be gained by taking the action. One great motivator for people is money. Many employers offer incen- tives for employees to partici- pate in wellness programs. ese incentives can involve cash, gift cards, discounts, raffle prizes, even extra paid time off . If you're encouraging employ- ees to participate, try using a message like "Don't leave money behind, participate in the wellness program to collect your gift card." Share stories more than statistics Let's say there's a new wellness initiative that provides nutrition counselling to employees. All the communications about the new program feature alarm- ing statistics about how few fruits and vegetables Canadians eat or the negative ways obesity can im- pact an individual's health. People have seen all these sta- tistics before — they're unlikely to remember them or to act because of them. Instead, bring in a co-worker who has participated in the nutri- tion counselling program. Have him share his story: He's been overweight since childhood and on countless diets throughout the years. He's struggled to make healthy eating decisions. Now, after completing the counselling program, he feels confi dent in his food choices. He's been able to stop taking medica- tions. He's lost weight, and gained a better outlook of the future. is story — and approach — will resonate with employees. ey can relate to their co-work- er's story, even if it isn't their own personal story. Personal stories have far more impact than statistics. Use the anchoring eff ect to help establish healthy behaviours e anchoring eff ect says that an individual uses an initial piece of information in order to make sub- sequent judgments. For example, while shopping, if a person sees a pair of shoes that costs $800 and another pair that costs $150, she might have thought the $150 shoes were expensive if she had seen them alone — but now they seem like a real bargain. By using the anchoring eff ect theory, employers can encourage employees to choose healthier food options at work. When de- ciding what or how much to eat, people tend to look at what they are being served as a starting point. They unconsciously use that as their anchor or example of a healthy or unhealthy choice, or a "normal" serving size. For employers that provide on- site cafeterias or snacks, consider offering smaller portion sizes, such as half-sandwiches and smaller beverage containers. Make healthier items the de- fault options throughout the menu, such as fruit instead of po- tato chips. Use smaller plates and bowls for self-serve to encourage appropriate portion sizes. Rethink benefi ts and wellness initiatives For years, it was assumed people made rational decisions. ey recognized when impor- tant decisions needed their at- tention, and then spent time and energy researching their options and calculating the pros and cons. After making these careful deci- sions, they would have the com- mitment and discipline to follow through appropriately. But researchers are now discov- ering this is not the case. All hu- mans consistently make irrational decisions. As employers, it's important to remember this fact — and keep it front-of-mind when designing wellness programs and group benefi ts for employees. Julie Stich is associate vice-president of content at the International Founda- tion of Employee Benefi t Plans in the Greater Milwaukee Area. For more information, visit www.ifebp.org. Establish social norms by pointing out the positive actions employees are already taking. HR News at Your Fingertips Sign up for the Canadian HR Newswire today for free and enjoy great content from the publishers of Canadian HR Reporter. THE LATEST NEWS Stay on top of essential late-breaking HR news and developments. THE BEST COMMENTARY Access trusted analysis and opinion on the cases and changes that are shaping the HR landscape. DELIVERED WEEKLY Your profession can change quickly, which is why you need the freshest, most recent information. 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