Feature Article - March/April 2016

Better Safe Than Sorry

Boost Safety Through Incentives

By Joe Bush

Safety incentive programs? Isn't not getting hurt enough reward?

You'd think that would be motivation enough, but human nature being what it is, shortcuts are taken, hangovers are brought to the job, common sense isn't everyone's gift, and sometimes a worker's mind is on weekend plans instead of proper ways to lift heavy things.

Fortunately for workers, their employers benefit from injury-free workdays as well. Safety records are part of bid credentials, insurance premiums stay low if the insurance is lightly used, and workers' compensation checks are not cut. Humanity aside, companies are very concerned for their employees' well-being.

Safety incentive programs can be effective in motivating individuals and teams to concentrate on proper methods and equipment and behaviors on the job. There are results-based incentives and there are behavior-based incentives, each with strengths and weaknesses.

One Size Does Not Fit All

A 2014 study in Safety Science Journal reported that one manufacturing plant that tried a combination of the two programs showed a 75 percent savings in worker accident compensation claims (WACC). That's a fine outcome, but it's not as easy to achieve by simply copying.

"Everything is unique to a client based on what is driving their risk and their accident numbers," said David Sims, vice president of Bill Sims Company, designer of safety incentive reward and recognition systems.

"There is no one-size-fits-all that you can say, 'This will work with this client, this will work with that client.' You have to look at each client's situation, where they are in the management structure, the workforce—all of that you have to look at when you're designing a program that will be successful for them."

There are many factors to consider when planning an incentive program that rewards safety, many of them similar to any incentive program, for sales quotas, for example. Will it be designed for individuals or groups? Will it be different for managers and executives than the rank-and-file? What are the rewards, cash or merchandise? How often are they given? Will the standards be results (number of injuries) or proper practices? What are the tax implications? How are rewards redeemed? How are incentive programs communicated?

The most important difference is that a poorly designed safety incentive program can draw citations and fines from the Occupational Safety and Health Administration (OSHA), which has a whistleblower provision (section 11c of the Occupational Safety and Health Act).

The best advice an incentives program consultant can give is to not reward a group for a low number of injuries over a time period with cash, said George Delta, counsel for the Incentive Federation Inc. Last but not least, Delta said whether a safety incentive program is behavior-based or results-based, group or individualized, program designers and managers have to consider the tax implications of rewards. To get the most tax benefit from rewards, and to be sure to act within the law, incentives have to be structured according to Section 274(j) of the Internal Revenue Code.

Safety incentive programs can be effective in motivating individuals and teams to concentrate on proper methods and equipment and behaviors on the job.

"If you design your program reasonably well, it works, it really does work, and so what OSHA tried to do is kind of nibble at it," Delta said. "And one of the things you do by nibbling is take on the badly designed safety programs, mainly those that are designed and aimed at groups. For example, I design a program saying, 'This group of employees, say a team is 25, if we get no reportable injuries for a 30-day period, everybody gets a reward.'

"Well, that's a crappy program because if you break an arm on the 28th day, there is going to be pressure on you not to report the injury so everyone on your team can get rewarded. That's not the way you design them. You design them individualized. The leading characteristic I've found for a poorly designed program is one where the outcomes are group-based. If you have a program that says no injuries or only one reportable injury on this team for over a 30-day period, that is poorly designed because it's really not encouraging better behavior; you're encouraging people not to report injuries."

The thinking behind behavior-based programs is that when workers are rewarded for taking safety classes, and when they follow company safety procedures, the pressure to hide injuries is removed and safety is still encouraged as a company priority. Similarly, when programs are individualized—the group reward is not dependent on the members' performance or lack of injury—the need to please the team is no longer a factor.

Worse than peer pressure is possible employer pressure, which can be avoided with clear language in company safety policies and procedures, and with individualized and behavior-based incentive programs.