An Evaluation Of Workplace Wellness Programs: A Perspective From Rural Organizations [Journal of Applied Business Research]

ABSTRACT

This paper describes a study to determine the prevalence and characteristics of employee wellness programming amongst rural organizations and/or employers. A sample of convenience (n = 200) from a local human resource management association was surveyed via e-mail with an internet based questionnaire containing 20 items regarding employee wellness programming, activities, effectiveness, and measurement. The results indicated that the primary responsibility for employee wellness programming rests with the human resource department (63.6%). Most rural organizations ' employee wellness program are implemented to improve employee health, improve employee productivity, and to reduce absenteeism. The findings indicate human resource professionals in rural organizations are struggling to determine effective measures for employee wellness programs despite significant investments of money. Rural, unlike urban or metropolitan, based organizations are not offering substantial incentives to employees in order to increase participation, and are continuing to offer traditional employee wellness activities such as smoking cessation, and vaccinations. These employers are not measuring effectiveness (53%) and not realizing substantial cost savings (63.2%) for the return on investment.

Keywords: Workplace Wellness Programs; American Health Care System

LITERATURE REVIEW

It has been implied that the health care system in America is broken. These implications have created a stir amongst legislators, employers, organizations leaders, employees, and the general public alike. Many in these groups are demanding health care changes and reform, however it was only until recently that a comprehensive reform plan including legislation was put forth to correct the issues with health care in the United States. However, employers and health insurance carriers has been implementing small reform measures within organizations for decades including health and wellness programs at organizations across America.

Employee wellness programs are an organized, employer-sponsored program that is designed to support employees as they adopt sustainable behaviors that reduce health risks, improve quality of life, enhance personal effectiveness, and benefit the organizations financial position. (Berry, Mirabito, and Baun, 2010). Most employee wellness programs can be fit into one of three levels according to Gebhardt and Crump (1990). Level 1 programs focus on awareness and may include health fairs, newsletters, posters, flyers, health screenings, and, generally, other educational activities. Level 2 programs work toward modifying life-styles with such offerings as strength training or back training. This level provides participants with a knowledge base to help alter their negative health habits. Level 3 programs typically promote health life-style by providing fitness centers, making healthy food available, and removing unhealthy temptations, such as candy (Gebhardt & Crump, 1990).

When such measures are business-sponsored, they are commonly presented as workplace wellness programs. These workplace wellness programs vary greatly in their activities, some being flu shots, gym membership discounts, weight management programs, healthy eating incentives, health risk questionnaires and analyses, online health monitoring tools, and individual coaching sessions. Some programs include health screenings, stress management programs and breaks on healthcare premiums for participation (Vesley 2008).

Wellness programs also may include fitness centers, health education programs, health testing, incentive and/or disincentive approaches focused on health behaviors such as dieting and smoking, and health outcomes like the lowering of cholesterol and body fat levels (Zoller, 2004).

A survey reported by Corporate Health Systems in 2008 and that yielded 1870 respondent companies determined that thirty-five percent of the companies' programs included smoking cessation, 34% included weight management/weight loss, 33% had health risk assessment, and the same percentage promoted via a newsletter.

Workplace wellness programs commonly are focused primarily on physical health. However, the scope of these programs often extends beyond mere physical health. The American Psychological Association reported the winners of its Psychologically Healthy Workplace Award program. The winners included the wellness program at Teledyne Brown Engineering, which resulted in a reduction in worker absenteeism of 34%. In addition, the participating employees used a third less of their sick days, as compared to those workers outside the program. The supportive and flexible work environment at WorldWork helped lower its employees' body weight, cholesterol, blood pressure, and glucose. And, at Replacements, Ltd. the average employee tenure has extended by more than 8 years. Psychologically healthy workplace practices include such programs as employee involvement, health and safety, work-life balance, participation in decision-making and flexible work arrangements (Anonymous, 2009).

Although these wellness programs are receiving increased attention at this time, they are not new. Zoller (2004) found workplace wellness programs to exist in nearly nine of ten large corporation and workplace wellness programs appear to be promoted, mainly, in larger companies. There, employee wellness programs are becoming a mainstream perk. The National Business Group on Health states that about 75% to 80% of larger compames offer wellness programs. In contrast, the rate of offering such programs in smaller companies drops to near 7% (Bonvissuto, 2010).

Employer Incentives

What promotes the general growth of these employer-sponsored activities? A major force is the employer cost of worker healthcare.

Businesses of all sizes and across the United States are encountering the ever-present dilemma of paying more for employee healthcare. Double digit cost increases in recent years are all too common. Although employee health costs were once viewed simply as issues of benefits, according to Shurtz (2005), they now are so substantial in size that often severely erode company profits and are forcing employers to re-consider their methodologies of providing employee healthcare.

Hall (2008) suggests that some employers are recognizing that their rapidly escalating healthcare costs are even jeopardizing their global competitive positions. One approach these compames are exploring to reduce these costs is to focus on healthy lifestyles among their employees through targeting the risks that result from lack of adequate physical activity, poor nutrition, tobacco use, excessive stress, and other unhealthy habits. It is commonly recognized that these risk factors can lead to chronic diseases and health issues that impact worker productivity, absence from die job, and employee safety and morale.

Healthcare Cost Shifting and Sharing

In addition, many businesses are resorting to shifting some of the healthcare costs to their employees. Shurtz (2005) contends that as businesses gradually shift more of the costs, some proponents suggest that employees are becoming more aware of the magnitude of costs involved and, consequently, are become more involved in and making improved decisions about their personal health issues. This increased sharing in paying for their healthcare may also lead workers to increasing attention and participating in their wellness matters, including the utilizing more preventative measures in the workplace.

Evolution of Workplace Wellness Programs

Over time, company-sponsored wellness programs are gradually evolving with many variations. Sullivan (2009) reports that health plans are gradually becoming what health maintenance organizations envisioned they should be at their inceptions. Sullivan contends that employers have concluded that getting ahead of illnesses rather than waiting for them to strike is the only viable to control and manage employee healthcare costs.

Perceived Benefits of Wellness Programs

Beyond the issue of lowering direct health care costs, compames typically embrace workplace wellness programs for additional benefits, such as increased productivity and reduced absenteeism. Zoller (2004) states that other benefits may include improved morale, the ability of a company to better recruit and retain quality employees, and increased worker loyalty and commitment to the job and company.

In response to safety problems, personal injuries, and on-the-job accidents (die most common being shoulder, back, and knee injuries), UPS established health and safety committees of non-management personnel at 2,900 facilities countrywide. Since the program was begun, UPS has experienced a decrease in absenteeism, and increase in morale and productivity, and a 60% drop in on-the-job injuries (Bloom, 2008).

Blue Cross and Blue Shield in North Carolina study the results the results of wellness programs. Sullivan asserts that the company's programs have made significant strides of improvement in the areas of employee smoking, blood pressure, cholesterol, and body weight (2009).

Although many company-sponsored wellness programs fail to achieve obvious success, exceptions do exist. The Procter & Gamble programs, generally accepted as being successful, include on-site coaches, clinics, fitness centers, and comprehensive formulas (Bonvissuto, 2010).

Hand (2009) found that medical costs and costs due to absenteeism declined by about $3 for every dollar spent on the workplace wellness programs. Most of the participants in this particular study were larger compames with more than 1 ,000 employees, and the programs included issues of weight loss or smoking cessation, or both. Baicker, Cutler, and Song in 2010 concluded that medical costs fell by about $3.27 for each dollar invested in wellness programs, while absenteeism costs dropped by about $2.73 for each dollar expended.

The wellness program at Citi Bank for approximately 47,000 employees costs around $1.9 million with realized benefits of about $8.9 million, a return on investment of $4.7 per $1.00. At Highmark, their program for 12,000 people after four years provided a return on investment of 1 .65 to 1 (Sboros, 2009).

Employee Acceptance

In spite of the many beneficial effects of workplace wellness programs, not all programs are successful and readily accepted by the employees. Zoller (2004) reports that programs can actually produce resentment towards the sponsor, create divisions between employees, and even alienate workers with varying perspectives about health. However, he contends that these potential negative reactions can be significantly lessened with careful and sensitive program planning and implementation.

Mike Miele of Heathcare Analytics concurs with Zoller in that, although wellness programs may be offered, they generally are not well accepted by workers. He further states that the amount of help that workplace wellness programs provide is questionable, that in the longer run they probably do improve overall health and wellness, but that this is not proven in the data. The major barriers to a successful program are inherent employee unwillingness to change behaviors and lack of sustained employer commitments (Bonvissuto, 2010).

Zoller (2004) study continued that, although most programs report reductions in employee healthcare and disability costs, other programs conclude mat the health promotion may actually encourage unnecessary and expensive testing and doctor visits. A 1994 study found that 41% of employers were "not sure" that their healthcare activities improved health or contained costs.

Participant Incentives

A survey conducted by PricewaterhouseCoopers of employers indicated that only 15% of the employees participate in wellness programs. The employers said that, for more worker participation, they want better education and incentives. Many employers have determined that wellness programs, to attract participation and create results, must be coupled with employee financial incentives (Capps & Harley, 2008).

The wellness program strategies of organizations have evolved over the years. Before 1999, most offered programs in weight loss and smoking cessation. In 1999, organizations began providing "flex dollars" for health care. This evolved into their giving monetary incentives if employees complete health assessments and then demonstrate improved health outcomes.

Hand reports that rewards as incentives for participation increased from $100 in a 2007 survey to $145 in about two years. Of the respondent US compames, 12% spend more than $500 per employee per year. Although these are offered by employers globally, such incentives are much more prevalent in the US. Financial incentives were described as being "extremely" or "significantly" effective by only 19% of responding companies. However an expansion in the use of financial incentives indicates a strong belief in their effectiveness in changing healthrelated behaviors (2009).

In the survey reported by Corporate Health Systems (2008) determined that the top two reasons for implementing wellness programs are improved employee health and decreased costs for healthcare. Only 23% reported that they offer incentive for participation in their programs. "At least a third of U.S. companies offer financial incentives, or are planning to introduce them, to their employees to lose weight or get healthier in other ways." According Kevin Volpp of the University of Pennsylvania, "There's been an explosion of interest in this." (2010).

According to Fenton, "General Electric has been experimenting with paying nicotine fiends in its employ to quit smoking. Corporate anti-obesity programs abound, distributing cash and bonuses to workers who lay off French fries." (2010). Most research data indicate improved business performance following any kind of wellness intervention.

Challenges to Implementation of a Wellness Program

Many feel that workplace wellness programs are burdened with entrenched problems, such as offering the wrong types of incentives, providing inadequate coaching and guidance, and offering unclear goals toward improved health outcomes (Vesely, 2008). This study revealed that the entire premise of workplace wellness is deeply flawed. His basis is that the current focus is on getting sick people well, rather than keeping well people well. The study notes that few programs reward the healthy lifestyles of healthy workers, such as for biking to work. Programs should view everyone as a winner and offer encouragement for maintaining a healthy lifestyle. Vesley proposes that more efforts should be directed towards empowering people with attention and with providing low-cost interventions (2008).

Interestingly, the overall study of outcomes encounters a potential obstacle. The federal Health Insurance Portability and Accountability (HIPPA) Act of 1996 orders that strict privacy rules apply when a health-plan-related reward depends upon achieving a health outcome. The rules do not apply if the reward is based solely upon participation. But, employers could be subject to severe penalties if they use outcomes to reward (or punish) workers.

Some compames, however, continue with imposing penalties upon workers regardless of the HIPPA risk. One firm, after seeing the workers smoking or chewing tobacco, suspended 39 employees who had signed insurance forms saying they did not use tobacco products (Vesely, 2008).

Outcomes of Workplace Wellness Programs

According to the results of a study conducted by Integrated Benefits and released recently, nearly twothirds of large and mid-sized companies provide programs to their employees to promote health and productivity. However, most focus only on participation and not results (Vesely, 2008).

Questions have been raised about the outcomes of workplace wellness programs, their goals, and the evaluations of the programs based upon the defined goals. Employer wellness programs take many forms, approach different issues, are of various sizes and complexities, with multiple levels of funding and support, and, accordingly, provide differing results. Evaluating these results in detail can be a challenge for any employer, even with the support of an insurer. The Corporate Health Systems study of 2008, in fact, shows that 67% of the sponsoring businesses do not evaluate their programs. Those that do evaluate rely upon participation satisfaction (77%), health claims analyses (42%), health risk appraisal scores (38%), absenteeism (25%), productivity (17%), and other methods (9%).

Significantly, a survey by Fidelity Investments found mat 65% of companies have no measurable goals for their programs and 27% simply do not measure program outcomes (Bonvissuto, 2010b).

METHOD

Participants

Participants for mis study were selected from the Northeast Region of Pennsylvania (NEPA) and from a membership listing of a human resource management association. (n =200). NEPA is comprised on a 14 county region of which only two counties are considered urban. The wellness programming survey was distributed via email with a link to the internet with 35 participants responding. This resulted in a 17% response rate which is consistent with previous internet research. (Sheenan & Hoy, 1999).

The survey for this study was developed from previous research as well as to address the research questions (Corporate Health Systems, 2008; Berry, Mirabito, & Baun, 2012). Surveys questions requested responses for demographics, wellness programming, employee incentives, and financial investment and returns. The survey was distributed via e-mail to the human resource manager for completion or requested the link be forwarded to the party responsible for wellness programming.

RESULTS

The study results reveal the prevalence of wellness programming amongst the employers within mis region as 99%, 34 of the 35 respondents. The majority of respondents indicated that the human resource manager (63%) were responsible for the administration of the wellness program with only 3% indicating a hired outside professional or consultant to manage the program. The majority of respondents indicated that their organizations employed over 1 000 employees (34.9%) and between 1 00 - 499 employees (34.3%). (See Table 1 ).

The study intended to determine the type, amount, and frequency of wellness programming amongst the survey participant organizations. The results indicate that even the smallest of employers are offering wellness programming (2.8%) with the interest of gaining some benefit from these programs. (See Table 2) Employers indicate the primary reasons for offering employee wellness programs are improve employee health (94.3%), improve employee productivity (65.7%), reduce absenteeism, (57.1%), and improve employee morale (57.1%).

The majority of survey respondents indicate that participation amongst employees over the past 24 months has increased (61%), while 13% decreased, and 26% have maintained steady employee participation rate of 26% to 50% of employees particpating in the programs. Most organizations are offering a variety of wellness activities for their employees in order to maximize their employee participation. Survey responses reveal that the majority of employers are offering health screenings such as blood pressure monitoring (77.1%) , smoking cessation (74.3%), and vaccinations for influenza (71.4%) in order to improve employee health. In addition, employers are offering nutrition education (65.7%), physical activity and fitness counseling (62.9%), and health fairs (62.9%). Employers on a less frequent basis are providing employees with stress management, CPR/First Aid, wellness newsletters, subsidized gym memberships, workplace safety trainings, and weight management consultations. (See Table 3).

Organizations indicate maintaining a steady or slightly increased particpation rate amongst employees and indicate the use of incentives are popular to increase employee participation. According to Capps and Harley (2008), employer incentives are important to increase employee particiption, however this research indicated only 44.1% of employers were offering an incentive to increase participation rates amongst employees. These incentives ranged from gift cards, to paid time off, and reductions in medical insurance premium cost sharing. Employers are offering a reduction in medical costs and gift cards as their strongest incentive (37.5%), while the smallest or least indicated incentive was cash or monetary incentives and PTO (18.8%).

Employers are offering wellness programs and a variety of wellness of activities for various reasons, however the primary purpose has been indicated to improve employee health. Although, more than half of those surveyed (68.6%) revealed their intend to reap a financial benefit from the wellness program. These financial benefits are based upon their financial incentive per employee. The survey results suggest that 58% of employers are investing less than $300.00 per employee while 3% are investing more than $500.00 per employee on wellness activités. Employers are evaluating the effectiveness of their wellness programs (66.7%) while 33.3% are not evaluating any effect of their wellness program. Employers are investing significant money into employee health and well-being with the majority of respondents incdicating some evaluation of the return on their investment in these programs.

Employers are evaluating their wellness offerings through a variety of mechanisms. The study results reveal that evaluation are to monitor heahh claims (59.3%), participant satisfaction and health risk appraisals (44.4%), and absenteeism (33.3%). In addition, organizations are analyzing and experiencing cost savings (Table 6) in the following areas: lower health insurance premiums (21.1%), and lower absenteesim (15.8%). However, an alarming amount of employers are not evaluating cost effectiveness (53%), and an additional 63.2% are generating no cost savings.

CONCLUSIONS AND IMPLICATIONS

There are many opportunities for employees to participate in employer sponsored wellness activities within large organizations. Some of the best-practice models for employee wellness programs have been established by Fortune 500 companies. However, the results of this study reveal that there are opportunities for employees to participate in wellness programming at most organizations. This study revealed that 34 rural employers are offering employee wellness programming in an effort to reduce costs, and increase employee health (94.3%) and/or employer profits and productivity (65.7%). Employers are analyzing costs, and evaluating effectiveness of these types of programs. However, there is considerable room for improvement amongst rural employers.

Rural employers are not evaluating the cost and effectiveness to the extent of large, urban employers. Most employers in this region are analyzing "soft" evaluation measures and assessments such as participant satisfaction, and health risk appraisals (44.4%). Whereas some employers (11.1%) are analyzing "hard" evaluation or assessment measures such as productivity, and an alarming 14.8% of employers are not analyzing any data to measure the effectiveness of their wellness programs. It is critical to justify the costs of these programs which the majority of participants in this survey indicated to be below $300.00 per employee.

Based upon the results of this study it would behoove rural based employers to analyze and benchmark their employee wellness programs against best practice models established by previous research (Berry, Mirabito, and Baun, 2010). In addition, human resource professionals within rural organizations must begin to offer standardized programs instead of haphazard employee wellness programming including activities with measureable and meaningful outcomes. Human resource professionals employed with rural organizations must establish evaluation mechanisms which influence the financial position of the organization, and establish meaningful incentives for employees. Incentives are utilized to increase employee participation in wellness programming, and increased employee participation will influence absenteeism, productivity, and medical insurance costs.

The influence of employee wellness programming on the organizations' financial position must be established to justify the costs of such programs. Human resource professionals remain the primary responsible party within rural organizations for wellness programs. In order for these professionals to be a strategic business partner, HR professionals need to have a substantial influence on the financial position of the organization, and successful employee wellness programming is one mechanism to accomplish this task.

REFERENCES

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Ken Zula, Ph.D., SPHR, University of Scranton, USA

Karen K. Yarrish, Ph.D., SPHR, Keystone College, USA

Sonji Lee, Ph.D., Keystone College, USA

AUTHOR INFORMATION

Ken Zula, Ph.D., University of Scranton, USA. Dr. Ken Zula is assistant professor in the Department of Health Administration & Human Resources. He graduated in 2006 with a doctor of philosophy in human resource development. His dissertation title was The Development and Initial Assessment of an Instrument for Human Capital Planning. E-mail: Kenneth.zulataiscranton.edu

Karen K. Yarrish, Ph.D., Associate Professor and Chairperson, Division of Management, Keystone College, USA. Education: King's College, Bachelor's Degree, Business Administration, University of Scranton, Master's Degree, Human Resource Management, The Pennsylvania State University, Ph.D. "Workforce Education and Development". E-mail: karen.varrish(a),kevstone.edu

Sonji Lee, Ph.D., Associate Professor, Division of Business and Technology, Keystone College, USA. Education: Capella University, St. Paul, MN - Doctor of Philosophy in Business; Marywood University, Scranton, PA - Masters of Public Administration; College Misericordia, Dallas, PA - B.A. in Sociology. E-mail: sonii.leefekevstone.edu