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What's your reward?

The debate over incentive programs

April 1, 2011

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KEY POINTS

  • Incentive programs, which some experts suggest may not always be necessary, should use leading indicators.
  • OSHA has warned it "will not tolerate" incentive programs that punish workers for reporting injuries and illnesses.
  • Rewards should be given for positive behaviors, and employees should not be at risk of losing a reward because of an incident.

The appeal of incentive programs is hard to deny. To employers, they offer the promise of a safer workplace, lower injury and illness rates, and decreased costs. To workers, it is a chance to win prizes, free lunches or bragging rights.

According to some safety professionals, though, beyond the gift cards and improved performance indicators may be something less rewarding: unreported injuries, worker intimidation and hazards that continue to go unabated. Incentive programs can enhance established occupational safety programs but should not be considered an easy fix to underlying safety problems, they say.

“There may be companies who believe it’s an easy solution,” said Jim Johnson, group vice president of workplace safety initiatives for the National Safety Council. “Safety is not easy. It requires commitment over time.”

Buying the numbers

The attractiveness of a quick fix to safety problems can lead to bigger issues. “They really tend to not promote safety,” said Vince Kelly, who is based in South Korea as the health, safety and environment manager for CH2M HILL. Kelly suggested some incentive programs may instead promote “covering up” and “cooking the books.”

For years, he said, companies have used milestone-type programs to reward employees based on a safety record’s lagging indicators – which measure past events such as lost time or on-the-job injuries. For so many hundred hours worked without an OSHA recordable injury, employees receive a reward.

Such incentive programs result in under-reporting or non-reporting of injuries, Kelly said. Employees who suffer a workplace injury may want to cover it up to stay eligible for the reward, which can be as modest as a plaque or as grandiose as an annual lottery entry for a brand-new truck.

“For 12 months, there is a big incentive for all participants to hide accidents so they all can stay in the game. The peer pressure not to report is enormous,” said Richard Flynn of C.A. Short Co., a Shelby, NC-based company that develops employee recognition programs.

Such programs can “come back to bite you in the end,” said Salvatore Caccavale, global corporate senior manager of environment, health and safety at A.M. Castle & Co., a metal distributor based in Franklin Park, IL.

Caccavale described one program he witnessed in which any employee without an injury during a set amount of time had his or her name placed into a drawing for a cruise. The program was complemented with smaller prizes, such as a flashlight or similar trinkets, for each month without a recordable injury. In one year, the number of recordables at that worksite went from 50 to two.

“They basically bought their numbers down,” Caccavale said. “But the root problems were still there.”

OSHA’s view

In several recent speeches, OSHA administrator David Michaels weighed in on incentive programs. He said although the agency supports programs in which workers are rewarded for demonstrating safe work practices and reporting hazards, OSHA is concerned with programs based primarily on injury and illness numbers.

“We strongly disapprove of programs offering workers parties and prizes for not reporting injuries, or bonuses for managers that drive down injury rates, or that discipline workers for reporting an injury,” Michaels said Oct. 19 at the Pennsylvania Governor’s Occupational Safety & Health Conference in Hershey.

According to Michaels, such programs discourage workers from reporting injuries and illnesses. As a result, problems are concealed, investigations cannot take place and workers remain exposed to harm, he said.

In the same speech, Michaels indicated his agency could do more than criticize negative programs: “OSHA will not tolerate programs that provide negative reinforcement,” Michaels said.

When asked to elaborate on whether or not OSHA could cite an employer for a negative reinforcement incentive program, an agency spokesperson pointed to the recordkeeping standard (1904). Under that rule, OSHA can cite employers for failing or incorrectly recording injuries or illnesses on the 300 log.

Additionally, the protection against discrimination standard (1904.36) details section 11(c) of the Occupational Safety and Health Act, which prohibits employers from discriminating against an employee for reporting work-related injuries or illnesses, and protects an employee who files a safety and health complaint.

“An employer can be in violation of section 11(c) of the act if a ‘bad’ incentive program is in place that retaliates against or punishes an employee for reporting a work-related fatality, injury or illness,” the OSHA spokesperson said.

OSHA compliance officers take into account an employer’s negative incentive program when classifying a citation, and investigators are looking closely at incentive programs employers may be using as part of the ongoing National Emphasis Program on recordkeeping, the spokesperson added.

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