To coax workers to engage in safe behavior, companies often offer incentives such as prizes, vacation days or cash. But, as Wayne Pardy points out in his recent series, incentive programs are controversial. If you're thinking of adopting such a program, there are certain questions you need to consider. Notably, do incentive programs really work? And how in the world do you persuade senior management that spending money on an incentive program will pay off for the company?

One way to answer these questions is to look at the experience of other companies that have incentive plans. We'll tell you about the success of one such company that offers an interesting perspective on how incentive programs can be crafted and used to improve overall safety performance. We'll also show you how to use the company's experience as a case study to sell your own incentive program to senior management.

The Challenge of Ensuring Safe Behavior

Getting workers to behave safely requires a combination of carrots and sticks. Discipline is the stick. Safety incentive programs can provide at least some of the carrots. And while you can and should use both to good effect, implementing a safety incentive program generally costs money. So you can't put such a program into place without winning the approval of senior management.

But getting management approval for an incentive program isn't easy. With the pressure to cut costs and increase productivity, the idea of offering incentives to workers for working safely isn't the easiest thing in the world to sell to a CEO. That's where the experiences of the National Steel company can come in handy.

The National Steel Case Study

National Steel is a large steel manufacturer with divisions throughout the U.S. The company was experiencing abnormally high incident frequency and severity rates and the related, increased costs were threatening its competitive position. The company's safety committee informed senior management that, over a two-year period, the extra costs due to workplace incidents incurred by just one division had been around $400,000 to $500,000.

Understandably, the committee and management considered the situation unacceptable and resolved to do something about it. So management instructed the safety coordinator to meet with the managers and workers in the plants in question to identify the causes of the problem. The safety coordinator also worked with an HR team to analyze the costs and types of incidents the company was experiencing. The team's findings:

Based on these findings, the team concluded that a group-based safety incentive program might be effective. Under the program, each worker in the plant got a cash award of $75 (after taxes) every time the entire plant went six months without "a medical treatment case" - that is, an injury that couldn't be treated by plant first aid and required a doctor's attention. When and if a medical treatment case occurred, the "clock" was reset and a new six-month period started.

The team believed that it was important to encourage a team effort at each plant because the actions of one worker could impact the safety of another. And it felt that peer pressure was necessary to keep workers focused. So that's why the team opted for a program that rewarded workers based on the group's safety record rather than one that rewarded workers based on their individual safety records.

Conclusion

I'll continue the story next week by describing the results of the National Steel case and drawing lessons that you can apply to your own incentive programs. Happy Columbus/Thanksgiving Day, everyone.

MY EXPERIENCE WITH INCENTIVES
Incentives Work If There's Real Commitment to Safety

I have been involved in many incentive programs during my career and most of them were ineffective because the company was not committed to having a safe operation. That is, they substituted sound management principles with safety incentives that were usually in the form of cheap trinkets that did little to motivate or improve 'safety' in the workplace.

I am fortunate enough to be the EH&S Manager at a large industrial construction project (2,000 workers) which consistently has a recordable injury frequency of less than 1.0. That is because there is a commitment by management to having a safe workplace and that commitment is reinforced by the actions of management and supervisors who are guided by a set of principles that challenges everyone to "Think Safety First." The mantra on this site is Zero Incidents and because management is genuinely concerned about safety, everyone has bought into the program.

We encourage participation through a unique incentive program designed for this site that recognizes superior safety behavior by individuals and groups. For instance, the project recently completed 500,000 hours without recording a single injury requiring medical attention. That resulted in every worker receiving a $50 gift certificate. The workers appreciated the recognition and management appreciated the effort.

This is proof that when everything else is in place, incentives are a great way to say thank you to workers for a job well done.

Sam Gibson
Construction EH&S Manager
Suncor Firebag Project

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TELL US ABOUT YOUR EXPERIENCE WITH INCENTIVES

Send your stories to glennd@bongarde.com. Let us know if it's okay if we print your name and the name of your company.

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