Health and Medicine

Increase Your Team’s Success with Financial Incentive and Friendly Competition

healthy competition

Team competitions in the workplace are nothing new. Employers have encouraged this for years, both as a way to promote a spirit of cooperation in the workplace and in an effort to keep their employees healthy. Recently, many employers have implemented competitions in the workplace coupled to financial incentives to increase their success rate, and it’s working!

At the University of Pennsylvania’s Perelman School of Medicine, a recent study has shown that using different combinations of financial incentives and social comparison feedback leads to significant differences in outcomes when applied to competitions in the workplace.

Mitesh S. Patel, a staff physician and an assistant professor at the Perelman School of Medicine explained how they applied concepts from behavioral economics together with financial and social incentives to conduct the study: 288 Employees were divided into teams of four and were required to achieve at least 7,000 steps per day. They all used an app on their smartphones to track their steps and received feedback on how their performance and that of their team compared to that of their peers.

Patel states that the study was designed such that careful testing between groups could determine how these efforts could be made more successful. The 72 teams were divided into four groups and the incentives offered to each group was varied as follows:

  1. This group received only a social incentive – they received feedback comparing their results to the average (the 50th percentile).
  2. The second group received the same social incentive as the first, but a financial incentive was added.
  3. This group received only a social incentive – they received feedback comparing their results to the top quartile (the 75th percentile).
  4. The fouth group received the same social incentive as the third, but a financial incentive was added.

The financial incentive for groups two and four was the same – each team member had an 18% chance of winning $35 and a 1% chance of winning $350 each week. Although the study ran for 26 weeks, the financial incentives were only offered for the first 13 weeks. Financial incentives were allocated with a lottery system. Team members offered the financial incentives were also only eligible for the weekly draw if their team achieved an average of 7,000 steps per day during the week in question.

The results of the study are shown in the table below:

Team % of Goals Achieved
Feedback compared to average (50%) + financial incentives 45%
Feedback compared to top (75%) + financial incentives 38%
Feedback compared to average (50%) with no  financial incentives 30%
Feedback compared to top (75%) with no financial incentives 27%


Senior author David A. Asch, a professor of Medicine and Health Care Management, feels that the findings of the study show that there is an opportunity for employers to improve the outcomes of their competitions significantly if they design these better.

Even during the follow-up period, 95% of the members of the test groups stayed engaged in the study. As many people carry their smartphone with them everywhere they go and the data collection and feedback was smartphone based, the researchers believe that this is a contributing factor to the high follow-through rate.

Co-author Kevin G. Volpp, MD, PhD and director of the Penn Center for Health Incentives and Behavioral Economics feels that promoting healthy behavior through using a behavioral economics approach offers great potential of generating state-of-the-art programs, not only in the workplace, but also in society as a whole.

Results were published in the American Journal of Health Promotion.