Let's pick up where we left off last week in our discussion of the National Steel case study. Then we'll draw lessons on what National Steel's experience with safety incentives might mean for your own company.

The Incentive Program's ROI

After the incentive program had been in place for two years, the National Steel team analyzed two sets of costs and compared them to the costs the company had incurred in the two-year period before it implemented the program:

Incentive Program's Costs. Because the workers were rewarded with $75 after taxes, it actually cost the company approximately $97.50 per worker in rewards for each six-month period without a medical treatment case. Over the two years, the company made $138,743 in incentive payments to workers. The program had minimal administrative costs because the data used to analyze safety performance, such as number of medical treatment cases, lost-time incidents and lost-time days, was already being collected for other purposes. No additional staff was needed nor was it necessary to pay existing staff overtime to administer the program. But a conservative figure of $1,600 per year for administrative costs was used to calculate the program's total costs. The team also included a needs assessment cost of $2,400 to cover the team's time and travel expenses incurred while researching and setting up the program.

Total average annual cost of the incentive program: $72,172.

Incident Costs. In the two years before the incentive program was implemented, the plants' total incident costs were $1,046,488. But in the two years after the program was in place, incident frequency was reduced by 68%, while disabling incident frequency was reduced by 74%. Total incident costs dropped to $37,401 - an average total decrease of $504,543 per year! And even when the team factored in the incentive program's costs, the company still saved money.

Total average annual savings: $432,372.

These impressive results demonstrated that the incentive program had a positive impact on the business. It resulted in a new safety awareness for workers and a safer workplace with fewer incidents and even fewer disabling incidents. And clearly the benefits the incentive program provided outweighed the costs of implementing it. In fact, the team concluded that the incentive program's ROI was 379%!

What it Means

Safety coordinators can learn several lessons from the National Steel case study:

How should you apply these lessons? First, you should review your workers' safety compliance track record and consider implementing an incentive program if their compliance is lacking. But note that incentive programs only work in certain circumstances. For example, if workers aren't complying with your safety measures because they don't understand them or even know they exist, your problem is training--not lack of motivation.

And an incentive program doesn't take the place of having adequate safety measures. So you'll need to determine what kinds of incidents occur most and why. If lack of motivation or focus by workers seems to be the issue, like it was at National Steel, then an incentive program might be just the ticket. Make sure that the incentive program you choose for your workers focuses on the types of behaviour you want to change or improve.

Conclusion

A safety incentive program can be an inexpensive yet effective way to improve safety performance at your workplace. You can then use the National Steel case study to persuade management - and yourself - that investing in such a program will pay off in the end by dramatically reducing incident-related costs.

MY EXPERIENCE WITH INCENTIVES

Don't Discourage Injury Reporting & Pick the Right Incentive

Having been both a receiver as well as a designer of safety incentives I would like to offer the following. Incentives programs need to be designed in such a way as to recognize the efforts to abide and to follow safe work practices. Most WCBs and provincial governments frown on any design that would entice or discourage reporting of injuries. The best intended program can be challenged if it is deemed that the peer pressure or "incentive" created an atmosphere of fear of reprisal from the employer or the peers.

The worst thing can be the culture whereby the "prize" becomes the point of debate. Any "prize" needs to be reasonable quality and universal in appeal. Designing the program to be more than a personal goal would be the best shot at attaining the intent. The targets should get weight from individual, team and departmental successes. By doing so, the members of the team will more likely stop the peers from performing unsafe acts which should help improve the bottom line and get all employees home safely at the end of the day.

Don Lavigne
Tembec Paper Group
Pine Falls, Manitoba

A Case from the Mining Industry

The mining industry is an unusually dangerous business. As we experienced an increase in First Aids and rising Medical Aids, the need for an incentive program was explored. Our primary safety reporting tool is the Neil George five point safety card. Each worker checks off five awareness tasks before he begins work. In addition, there is a safety tip section for the worker to record a safety tip such as "always wear your PPE."

In our effort to generate more participation in the safety tipping program we have introduced "the best safety tip of the week" for each crew safety meeting in our pit operations. The award is a token or widget as we call them, such as a first aid kit ($10). Primarily, the award is recognition for participation and does not represent a big dollar value. The value is in the acknowledgment, recognition and communications. You can't put a price tag on those outcomes!

The program has been so successful that we have workers "rapping" safety tips! We have found that the morale, communication between supervisors, safety reps and the workers has greatly improved.

Safety incentives? Properly applied, they can work wonders.

Don Berry
North American Palladium
Lac Des Iles Mines
Thunder Bay, Ontario

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LAST CALL FOR YOUR INCENTIVE EXPERIENCES

We'll leave this open for one more week. 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.

FACT OF THE WEEK

Transportation Deaths Fall

By Glenn Demby

Scenes like this were slightly rarer in 2006

According to the National Transportation Safety Board, overall transportation fatalities in the U.S. were down 0.5% in 2006. Breakdown:

Source: National Transportation Safety Board, http://www.ntsb.gov/Pressrel/2007/Pie-chart_transp-fatalities-2006.pdf

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