Should You Cancel Your Incentive Programs During the Recession?

Keep in mind, an employee with a positive attitude is just as contagious in improving morale in the workplace as a disgruntled employee is in destroying morale.

• By Spencer Toomey
• Jan 01, 2010

The economy is bad, business is down, and companies are laying off employees in record numbers. They need to cut expenses. An easy target is the company's incentive program. It doesn't produce goods, make sales calls, clean the building, or repair equipment. It just costs money the company doesn't have. Or does it?

You are asking your dramatically reduced workforce to do two, three, four, or even five jobs. There is no additional pay, so suck it up, work extra hard, and be happy that you have a job. And you know what? They will. They will, because they are your best employees, and they won't let you down.

They also will remember how you treated them during the hard times. If you take them for granted, work them hard, and don't reward them, they also will work hard on their job search. And as soon as the economy improves and companies start hiring again, they will be gone — and you will be left with your lessproductive workers. Incentives do not have to be extravagant. They need to be sincere, targeted, and presented in a way to make the employees feel engaged. Being overworked adds stress to the employee, mentally as well as physically. The mental stress is worse — and not only is the employee under stress, but his or her entire family.

Low Cost, or No Cost, Morale Boosters

If your company cannot aff ord a major incentive program during the recession, that doesn't mean you cannot run an incentive program. Be creative. Have pizza day, have a family picnic, and have your upper managers walk around to thank the family members for supporting their loved ones who are working all of the extra hours and carrying an extra heavy load.

Tell them you appreciate what they are going through and that, when things turn around, they will be rewarded for their extra eff ort that helped the company survive. Have some fun; there are all kinds of studies on the value of laughter and health. Having a "laughter break" each day helps to reduce the stress.

Upper management should walk around the workplace, putting into practice the old Tom Peters theory of managing by walking around from "In Search of Excellence." The managers can tell the employees they are appreciated and ask for their advice on ways to do things better.

Recognizing good ideas and eff ort in front of their peers make the workers feel special. None of this costs much, and in some cases, it costs nothing at all financially. But having the employees feel appreciated and engaged is, to steal from MasterCard, priceless!

Keeping your employees engaged and giving them the feeling of being part of the team and appreciated will help them with the mental stress and will improve their outlook. An employee with a positive attitude is just as contagious in improving morale in the workplace as a disgruntled employee is in destroying morale.

That is the human side of why a company should not eliminate safety and wellness programs during a recession. How about the financial side? The 2008 Liberty Mutual Workplace Safety Index stated that the estimated direct U.S. worker's compensation costs for the most disabling workplace injuries and illnesses were $48.6 billion.

Key findings for injuries and illnesses requiring days away from work in 2008 included this: From 2007 to 2008, the number of injury cases for construction laborers decreased 8 percent, and those for retail salespersons decreased 12 percent. During the same timeframe, the number of cases remained unchanged for nursing aides, orderlies, and attendants; non-construction laborers; and truck drivers. However, the rate for heavy and tractor-trailer truck drivers increased in 2008, up by 7 percent from the 2007 rate. The decreases in injuries are the direct result of improved working conditions, better training, and successful incentive programs.

So what does a good safety and wellness program costs? It can cost as little as $1 per employee to a few dollars per employee, depending on how creative or conservative you want to be. But what does it cost not to run a safety or wellness program? According to the National Safety Council, the average work-related injury's direct cost is approximately $38,000. That doesn't take into account the indirect costs that could be around $152,000. Putting everything together, you will need 10 percent of your profits to off set the injuries.

The $1 to a few hundred dollars starts looking like a very small investment when looking at the cost of one injury. What makes it even worse during a recession and aft er cutbacks is the fact that if it is one of your best and most productive workers who is injured, the financial hit is much greater. Hiring temporary workers to fill in will not come close to the same level of production and efficiency of one of your best employees.

So no matter how bad the economy is, the one thing that never should be cut is your safety and wellness programs.

A Twist on Wellness Incentives

Wellness incentives are great and serve a great purpose. They motivate employees to come to work when they have don't feel great or have a minor injury that doesn't aff ect their performance. How many times have you heard, "I haven't taken a sick day in six years"? It almost becomes an addiction, just as exercise does when you get into a groove and you just can't skip a day of exercise, even if your body could use a day off to recover.

You have a cold and you load up with over-the-counter medicines to get you through the day and preserve your streak of no sick days. You don't miss a day, but are you productive or just present? Are you working up to your capacity, or are you doing the minimum and praying that the end of the day comes quickly? And in your gallant eff ort to maintain your streak, how many fellow workers have you infected that do not have your stamina and stay home or, even worse, spread the cold further.

There is an added twist to wellness programs right now, and that is the H1N1 flu. The last thing a company wants is someone coming to work with the H1N1 flu just to keep a no-sick-day streak going.

So why not reward employees who stay home when they have a very bad cold or the flu? By rewarding common sense, a company will have fewer employees out sick, and thus it will stay more productive. Don't have long-term programs that encourage someone to come to work when they are very sick and risk infecting a large portion of the company. Reward them for not coming in with the flu. Educate them on how to keep the work environment "germ free" when they do have a cold, and give them parameters for when to stay home and when to come in. If the company has a medical office and they are not sure whether they should be there that day, have them check in with medical. If medical suggests that they go home, don't count that against them in the wellness contest.

The following are some guidelines from The John Hopkins Office of Critical Event Preparedness and Response.

Q: What should I do if I have flu symptoms?
A: Any employee with a fever of more than 100 degrees Fahrenheit and one upper respiratory symptom (runny nose, nasal congestion, sore throat, or cough) who has not traveled to a high-risk area or a place with reported outbreaks must do all of the following:

• notify his or her supervisor
• stay home from work until he or she has had no fever for at least 48 hours
• call Occupational Health Services (OHS) to be screened and receive guidance about any further restrictions
• be approved to return to work by OHS

• notify his or her supervisor
• call OHS immediately to schedule a screening
• receive guidance from OHS regarding next steps
• be approved to return to work by OHS

• notify his or her supervisor
• call OHS immediately for screening
• be approved to return to work by OHS

This article originally appeared in the January 2010 issue of Occupational Health & Safety.