Carl Potter smashed his right index finger while working by himself at night for a utility company in the 1980s. At the time, his company was running an incentive program that would reward employees if none of them got injured.
Not wanting to ruin their chances at a prize, Potter told his boss he got hurt at home when asked about the wrapped-up finger the next day.
“It was pretty common to see people come dragging in, limping in and say, ‘I did this at home,’ because management looked the other way,” said Potter, now a safety speaker, consultant and founder of the Safety Institute, an online resource center. “If anything, that [incident] got me involved in safety.”
When done correctly, incentive programs can boost workplace safety, experts say. If done incorrectly – as in the case of Potter’s former employer – the lure of an incentive can lead employees not to report injuries, among other problems.
Leading over lagging
Some employers have moved away from the type of program that Potter described, often known as rate-based programs. Those programs base incentives on not having injuries or OSHA recordables over a certain period of time.
Besides the possible disincentive not to report an injury, those programs also are going out of vogue, in part, because they’re tied to lagging indicators instead of leading indicators.
“We don’t recommend (rate-based programs) anymore,” said Brent Lee, national account manager for safety incentive provider C.A. Short. “Obviously, at the end of the day, it’s the customer’s decision on how they want to build the incentive program. We can give advice and suggestion on what we know is going to be the most successful. … We never recommend basing them on rate-based.”
Examples of leading indicators in an incentive program include reporting hazards or near misses, offering safety suggestions, taking part in training, or serving on a safety committee. Those rewardable actions focus on the process of safety instead of results.
“Incentive programs should be structured to reinforce your safety protocols,” Lee said, adding that they should “heighten employees’ awareness levels of your safety guidelines and have them top of mind each and every day.”
Likewise, Bob Lapidus, a retired safety consultant, said it’s ill-advised to start an incentive program without the foundation of an effective, overall safety program.
“Don’t initiate an incentive program without a good safety program,” Lapidus said. “You have a good safety program, everyone knows that you care about them. If you don’t have a good safety program in place and you start an incentive program, employees won’t appreciate that. They’ll think you’re trying to get them not to report injuries.”
Keep it simple
Lapidus says employers should keep incentive programs simple, be straightforward with ground rules and communicate those rules to all employees.
Associate Editor Alan Ferguson discusses this article in the Aug. 2021 episode of Safety+Health‘s “On the Safe Side” podcast.
He also says incentive programs should allow for consistent feedback to employees on their progress at least once a month. Employers also should reward employees with enthusiasm, in front of peers, on organizational time and as a planned event.
Likewise, C.A. Short recommends short-term recognition periods. “Employees should be acknowledged frequently and in as close to near-time as possible,” the company says on its website. “Humans are driven by immediate gratification. The sooner you can reward employees for taking positive action, the bigger impact you will have.”
Lapidus and C.A. Short agree: All employees should be able to receive recognition for achieving goals. If there’s one top or main award for one employee, make sure other employees also can receive meaningful awards.
Surveying employees on what rewards they find meaningful is a good practice, Lapidus said. Some of his ideas include time off from work, dinners, or tickets to movies or sporting events. Those rewards can “excite” spouses, children or others in their families, and add further motivation for employees to succeed.
Other reward ideas: framed certificates, plaques, or engraved items such as jackets or hats. These items can be personalized with a team or company name to bring people together as a group.
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‘Keeping people aware’
One issue with incentive programs is they can go stale and employees can lose interest if companies don’t change things up from time to time, Lapidus noted. That includes the incentives.
Along with providing top-down recognition, C.A. Short advises having a way for employees to praise each other. It also helps to have buy-in and continuous support from management.
Lee said that an incentive program is one piece of the pie or one piece of the puzzle along with aspects such as training, policies or procedures.
As the final piece of the pie, safety incentive programs provide the “human element,” according to C.A. Short, and bring higher levels of awareness to the other pieces.
“What’s the reason for an incentive program? I think it’s for keeping people aware that they need to work in a safe manner,” Lapidus said. “Why do you need incentive programs? It’s just another tool to get both management and employees to be more aware of what they need to do.”
OSHA’s take on incentive programs
In a series of three evolving memos over the past decade, OSHA has addressed incentive programs that may discourage injury reporting.
The first memo, issued in March 2012, deemed those types of incentive programs “problematic” under section 11(c) of the Occupational Safety and Health Act of 1970. Taking away an incentive for reporting an injury “could be considered unlawful discrimination” against an employee.
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“If the incentive is great enough that its loss dissuades reasonable workers from reporting injuries, the program would result in the employer’s failure to record injuries that it is required to record under Part 1904 (of OSHA’s regulations). In this case, the employer is violating that rule, and a referral for a recordkeeping investigation should be made,” the memo states.
Responding to an email from Safety+Health, former OSHA Assistant Labor Secretary David Michaels wrote that the reaction to the memo was mixed. “Some corporate stakeholders” were critical, but others, including the agency’s “Electrical Transmission partnership” and “most unions and public health groups,” supported it. Some employers interpreted the memo as OSHA no longer allowing any type of incentive programs.
The agency attempted to clarify its stance in October 2016 after publishing its Improve Tracking of Workplace Injuries and Illnesses final rule in May of that same year.
The agency stated that 1904.35(b)(1)(iv) in the final rule didn’t prohibit safety incentive programs. However, withholding a benefit such as a cash prize or “other substantial award” because an employee reported an injury would violate that regulation.
In October 2018, under the Trump administration, OSHA issued a memo stating employers could have rate-based programs as long as those programs “are not implemented in a manner that discourages reporting.”
Withholding a prize or bonus because of a reported injury is allowed “as long as the employer has implemented adequate precautions to ensure employees feel free to report an injury or illness.”
The memo states: “An employer could avoid any inadvertent deterrent effects of a rate-based incentive program by taking positive steps to create a workplace culture that emphasizes safety, not just rates.”
Under the Biden administration, OSHA is reviewing that guidance “to determine whether it provides necessary information to employers about how to incentivize safety in the workplace without disincentivizing the reporting of injuries,” an agency spokesperson told S+H.
An OSHA rule to “memoralize” its positions on safety incentive programs and post-incident drug testing was moved to long-term actions in the new administration’s first regulatory agenda, released in June. That means no action is expected anytime in the near future.
