Regarding the incentives for not smoking discussed in recent editions of Housing Today: one incentive that would work would be to deduct pay for the 10-15 minute break smokers take for each cigarette.
On average, if an employee smokes six cigarettes during work time, that employee works an hour a day less than his or her colleagues. This adds up to little more than a four-day week for most smokers.

They should either not smoke in work time or be paid accordingly. I do smoke myself, by the way, but only at weekends.

Source

Housing Today

Postscript

Tim Williams, corporate research and consultation officer, Selby council