Recently at Active Wellness, we changed the membership incentive at one of our national corporate wellness facilities from an entitlement to a use-it-or-lose-it model. For years leading up to the switch, employees had full access to the fitness facility at their leisure as a perk of employment.
Providing perks like corporate wellness is a vital component for supporting employee well-being, but these perks are of little use if they’re not utilized. Team Active increased fitness utilization by positioning the amenity in question as a co-owned supportive partnership, benefiting from the behavioral economic concepts of the endowment effect and loss aversion.
This distinction, perk vs. co-owned amenity, is an important one because of the behavioral economic concept known as the endowment effect. When we take ownership of something, we naturally value it more and fight harder to maintain it. A principle known as loss aversion, which is a component of the endowment effect, was developed by Nobel Prize winners Daniel Kahneman and Amos Tversky. They predicted that the pain of losing something to which we believe we own is greater than the joy of gaining something of equal value.
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