Tuesday, November 24, 2009

You Get What You Reward

"You get what you reward." That is universal truth, or about as close as you can get to it. Yet, corporate America continues to reward the wrong behaviors and then acts surprised when the desired results aren't achieved.

Examples: Most companies say they want quality, yet reward quantity. They say they want great customer service, yet how many do you know who poll customers and actually pay bonuses based on their observations? Not many.

Here's a good example of how it should be done, how there is a clear goal -- reduced costs of health care based on improved employee health and a reward carefully calculated to achieve that goal . . .

Whole Foods Market, the largest U.S. natural-goods grocer, is providing added employee discounts to employees who lose weight and measurably improve their health.

Employees will receive discounts of 20 percent, rising to 30 percent, based on blood pressure, cholesterol levels, body-mass index and whether they smoke or not.

"We're making an investment and we expect a return," CEO Mackey said, referring to potential savings in health care costs. (Whole Foods spent $150 million on self-insured health coverage last year.)

The offer reflects Mackey's published opinion that most health problems are "self-inflicted" and can be prevented through proper diet, exercise and similar lifestyle changes. Cost savings are achieved by "less government control and more individual empowerment." (For whatever it is worth, I wholeheartedly agree.)

Mackey angered some Whole Foods customers in August when he wrote in a Wall Street Journal op-ed column that people "have no intrinsic right to health care." It is a service, just like food, clothing and shelter, "best provided through voluntary and mutually beneficial market exchanges." The resulting outcry included calls for a boycott and his ouster.

That's too bad, because he is right.

Do such programs work? Well, this new health reward initiative goes into effect in January so the jury is still out. But other such programs inside Whole Foods have apparently worked well. Whole Foods shares have tripled this year.


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