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Selling Management on Safety Accountability, Part 3 of 3

January 18, 2006

The goal: To get management to embrace accountability for safety. The strategy: To demonstrate the link between safety and financial performance. The tactics: To conduct extensive research of company performance, build a case and seek the input of others within the company, including the CFO. Last time, I spoke about setting the stage for the crucial meeting with management to present the case. Let's now look at how to handle the actual meeting.

Pointers for Second Meeting

Move forward cautiously. Using real number from your own program, itemize all of the costs of illnesses and injuries to your company over the past three to five years. Create a profitability chart like the model below and use it to pose a series of questions to management:

YEARLY INCIDENT COSTS

PROFIT MARGIN

1%

2%

3%

4%

5%

$1,000

100,000

50,000

33,000

25,000

20,000

5,000

500,000

250,000

167,000

125,000

100,000

10,000

1,000,000

500,000

333,000

250,000

200,000

25,000

2,500,000

1,250,000

833,000

625,000

500,000

50,000

5,000,000

2,500,000

1,667,000

1,250,000

1,000,000

100,000

10,000,000

5,000,000

3,333,000

2,500,000

2,000,000

150.000

15,000,000

7,500,000

5,000,000

3,750,000

3,000,000

200,000

20,000,000

10,000,000

6,666,000

5,000,000

4,000,000

SALES REQUIRED TO COVER LOSSES

  • What if your Research & Development Department had this money to develop new products?
  • What if you had this money to give your executive management and key employees bonuses or raises?
  • What if you could be more competitive with your rivals?
  • What if you could pay less rather than more for insurance?

Showing How It Will Be Relatively Painless

Pick a few line supervisors and well-performing employees and craft your program. Tie performance to discrete performance measures that they can live with. Note: Employees can be worse than any manager. Temper extremes. You can always modify things later.

Scrubbing Old Incentives

Now for the hard part. If you have a safety incentive that has been part of the culture for years, it will likely have to be scrubbed. If it has become an entitlement, like many have become, wresting it away from the employees will have to be done diplomatically. You will have to demonstrate how your new program is better and more profitable than the old safety incentive entitlement.

Linking Safety to Performance

Accountability is based on the capitalist notion of meritocracy - or paying for performance. That means employees don't get raises or promotions for just getting the job done. The rewards go to employees who perform better. You can now give the top performer a 7% raise and the mediocre employee 0%. Wow, what a concept!

Transition & Implementation

Safety directors can paralyze themselves by overanalyzing pilot programs that never get fully implemented. Sometimes it is best to do it like Nike says: "Just Do It." Consider doing away with the pilot programs and transitions and just picking a day like January 1, for changing from the old program to the new.

Monitor, Monitor, Monitor

Keep track of the metrics and make sure that they truly reflect performance. Remember, sometimes you get what you measure, not what you want. Also, some employees will manipulate the system to get any number you want without doing any productive work. At this point scrutinize these folks and leave the others alone. My old saying is, "Don't spank the puppy that isn't peeing on the carpet."

Conclusion

Selling accountability programs takes patience, savvy, flexibility and a lot of work. But the benefits are tremendous. You keep employees and management safe and accountable while meeting company goals. In today's competitive working environments it is one of the few things that keep companies in business.



WORKPLACE STRESS

The Cost to Businesses

Workplace stress is one of those hazards that CEOs and CFOs tend to dismiss as "soft" and intangible. But it's nothing of the sort. Here are a couple of hard and specific figures you can use to drive home this point:

13.4 million: That's the number of lost work days attributable to stress incurred by businesses worldwide every year. To give you a sense of perspective, the total number of annual workdays lost per year is 40.2 million. (Source: National Safety Council).

$200 to $300 billion: That's how much workplace stress costs U.S. businesses every year. (Source: U.S. Bureau of Labor Statistics).

25%: That's the percentage of surveyed workers who cited their jobs as the greatest source of stress in their lives. (Source: National Institute for Occupational Safety and Health).

THIS DATE IN HISTORY

January 18, 1915

A train derails on a steep incline near Guadalajara, Mexico. More than 500 people die in the crash.

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