What’s your reward?

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.

Positive programs

“I understand the OSHA concerns,” Caccavale said. “As a safety professional, I have the same concern that organizations base [incentive programs] on the hiding of injuries.”

To avoid this, many safety professionals support incentive programs based on leading indicators. Leading indicators attempt to measure future performance through observations, such as noting the proper use of personal protective equipment, participation in a safety committee or reporting near misses.

In recent years, the general industry has trended toward moving from incentive programs based on lagging indicators to leading, Kelly said. An incentive program based on lagging indicators “can be problematic with unexpected consequences,” and those based on leading indicators “can help to reinforce positive behavior,” according to Johnson.

Creating an incentive program based on leading indicators is no simple task. “If you enter into an incentive program, you should do so with great care,” said Johnson, who stressed that employers should consider the following before implementing a program:

• Where are you in your safety effort?
• Where could incentives make a difference?
• What are you trying to achieve?
• Who is being targeted – floor workers or management?
• What are the incentives themselves?

Education also should play a strong role in creating a program, Kelly said. Because the programs are meant to promote and encourage positive behavior, it is important to teach employees the desired behavior. “If people don’t know what a good behavior from a poor behavior is, then you’re at square one,” Kelly said.

Such education can help curb employees who abuse the program to simply win prizes, Kelly said. This also can occur in a leading-indicators incentive program when employees rewarded for spotting near misses or hazards saturate the process with inadequate examples.

Employers should understand that even a properly structured program should not be viewed as the sole answer to a company’s safety woes. “Safety performance programs are not the silver bullet,” Flynn said. “If the safety performance program is not part of a holistic safety program, the performance program will fail to deliver any value.”

Caccavale said employers wishing to improve their safety culture should first look at training, improving regulatory compliance, implementing inspection processes and developing safety committees, among others. Incentive programs come later, if at all, he said.

Some experts disagree on whether or not positive incentive programs are necessary. Flynn equates them to one piece of a larger safety program “pie” that would include training, PPE and safety meetings. “Our opinion is each piece of the pie is equally important, and all must be aligned with the organization’s overall safety goals,” he said.

According to Johnson, incentives may be useful in engaging employees in safety, but every situation is different and an incentive program may not be essential. “You don’t need an incentive program to achieve safety excellence,” he said.

Scope and rewards

A major component of an incentive program is, obviously, the incentives. What rewards should employees receive as part of the program? Should they be team or individual rewards? Should they be actual prizes, or is simple recognition good enough?

Depending on the situation or work environment, either team or individual incentives may work better than the other, and some stakeholders advocate using both.

Johnson suggested using incentives directed not at individuals but groups of employees to help reinforce teamwork among co-workers. Team rewards can help motivate employees who may routinely fall short of being rewarded in an individual program, Kelly said. In his experience, rewards handed out on an individual basis typically go to the same 10 percent of the workforce who always are going to overachieve. By establishing rewards for groups, those same overachievers can help pull up others on the team.

Recognition rewards along the lines of banners or plaques can work hand in hand with rewards of a greater monetary value. “Money has some value, but the plaque is more of a ‘that-a-boy,’” Kelly said. “People definitely like to hang them above their desk.”

However, programs with such rewards should be implemented with care. As the safety manager for Sonnax Industries Inc., a manufacturer in Bellows Falls, VT, Lynn Barnes instituted a program in which departments were rewarded points based on a variety of leading and lagging indicators. Plaques, banners and free breakfasts were awarded on a regular basis for the department with the most points. After 18 months, Barnes discontinued the program.

“It was causing a little bit of animosity between the departments,” she said.

Another program rewarded employees who performed a safe act with a $5 coupon from department managers. Barnes also discontinued that program because she was dissatisfied with its implementation. Barnes is looking into other ways to implement an incentive program, and stressed the need to investigate how well any given program is running once it begins.

The real reward

All incentive programs should have a specific goal, and employees should be aware of the goal. “They have to know what they’re being rewarded for,” Kelly said.

Caccavale suggested that incentive programs work better if they are not kept running indefinitely. As an example of a short-term program, he described one facility where lockout/tagout was a problem. Workers were trained on lockout/tagout procedures and would receive a positive reinforcement for correctly performing the procedures.

At the end of the quarter, the program was evaluated and, when the issue was corrected, the incentive program was stopped. Continuing an incentive program can cause it to lose its effectiveness, Caccavale warned.

Several safety professionals stressed providing rewards for only “above and beyond” steps employees do, and not for routine work. Barnes agreed, stating she did not believe incentive programs were a necessity, but rather an enhancement to a safe work environment.

“Doing a good job – that’s an expectation; that shouldn’t be a reward system,” Barnes said. “You should want to do well. You should want to go home safe.”