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Two problems with these approaches. One more a problem than the other.

The problems with the second plan first. "Paying" for wellness with cash creates two issues...

1. As soon as cash is used to create behavior change it becomes an entitlement and creates an expectation that it will continue. Cash becomes part of their income.

2. In effect this plan pays unhealthy people more than healthy employees. That one would be hard to cover in a performance review. In fact healthy employees could begin unhealthy habits in order to fix the problems later for an increase in income.

The first plan, while better because it separates the wellness issue from compensation it still rewards those that start out below the inferred performance level. Wellness programs need to include and reward those that already have a healthy lifestyle through base awards for specific health statistics and by engaging those employees as coaches and "experts" to help the others. This will provide a "psychic" reward by elevating these employees and recognizing their efforts to help the organization.

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About The Author

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    Compensation consultant Ann Bares is the Managing Partner of Altura Consulting Group. Ann has more than 20 years of experience consulting with organizations in the areas of compensation and performance management.

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