Growing Season

Putting your reward emphasis on leading indicators will improve safety and stimulate a cultural shift.

• By Larry Bush
• Jan 01, 2003

FORWARD-looking companies are thinking "leading indicator" rewards when it comes to safety programs, as they strive to make more efficient use of their safety investment. This proactive approach is paying dividends over the old, outcome-based focus.

Traditionally, safety rewards have been aimed at end results (trailing indicators), with little or no regard for what was necessary to achieve these results. Most often, rewards were given when workers went a period of time without an injury or the company achieved some percentage of injury reduction.

This approach has drawn fire form the Occupational Safety and Health Administration, labor unions, behavior-based safety consultants, and, to a large degree, safety professionals. The focus on the trailing indicator has shifted.

The focus now is upon leading indicators--those activities, behaviors, processes, etc., that lead to results. Employees must wear protective equipment, follow material handling procedures, attend training and complete it satisfactorily, and so forth. Supervisors must conduct safety meetings at a certain level of regularity and quality, conduct machine safeguarding inspections, observe and report on specific worker behavior, etc. Managers also must take necessary actions to assure safety is taken seriously by both their direct reporting supervisors and the workers, as well. Thus, leading indicator rewards are moving to the forefront of safety program design consideration.

Leading indicator emphasis requires that companies rethink their rewards plan, placing greatest emphasis on training rather than the easily measurable trailing indicator elements such as reduced injury claim numbers, lowered worker's compensation outlays, and reductions in missed time due to injuries. While a leading indicator-based safety program will ultimately affect all of those same trailing indicator-associated elements, its impact can be much broader and occur much further upstream.

Changing the Culture
"For the average company, their safety measurement and goal systems focus on historical information like incidence or severity rates, and worker's compensation insurance experience modification rates," says Rick Pollock, president of Minneapolis-based Comprehensive Loss Management, Inc., a leading safety program designer for general industry and construction. "These outcome-based measures tell you 'how' you did last month or last year but are useless in determining what needs to be done to replicate the results. The company has no means for measuring the effectiveness of any program elements. Further, this approach fails to help identify or foster the specific activities, actions, and behaviors required to achieve the results. The actual outcome is a reactive, rather than proactive, approach to accident prevention.

"It's asking a lot of companies to turn loose those measurable trailing indicators they've worked with all these years. They hold onto those trailing indicators like a drowning man to a life preserver. But when they shift their focus upstream and establish achievable goals for action-based performance, the impact can be dramatic," Pollock continues. "It can literally change the company's entire culture, impacting everyone from the line worker, to the foreman, to the person working in the accounting department. This cultural shift results in significant performance improvement and cost savings."

A critical key to a leading indicator-based safety program is the reward system. Pollock says he and his company have worked with a variety of rewards companies and their programs over the years. As a safety program designer, he prefers those rewards programs offering a universal platform that can reward for other employee performance issues, as well as safety. The universal platform can stand on its own for the specific safety program instituted, or it can potentially integrate with the universal rewards currency for a company's other rewards-based programs involved with service recognition, training milestones, quality performance and mentoring, etc.

A universal rewards platform is made to order for leading indicator-based safety programs, particularly when integration is possible with other already existing incentive programs at virtually any level of the company. Allowing employees the freedom to accumulate reward value across multiple programs allows them to significantly "up" the possibilities from their total effort.

"We all know of safety programs where the rewards element actually worked opposite of the intent," Pollock says. "Ill-conceived rewards can incent employees to not report injuries, not seek necessary treatment, and avoid justifiable insurance claims. A leading indicator-based rewards system de-emphasizes the importance of those numbers and places focus on activities such as safety training.

"With a leading indicator-based system, we can reward the forklift operator for attending the kick-off event, taking Web-based safety courses, and acting on all the information conveyed. When the supervisor can literally walk out on the floor and reward the worker for operating the forklift at the proper speed and at the correct mast height, that has tremendous behavior impact," he adds. "Not to mention the fact that the supervisor can be incented to practice good department management by routinely observing forklift operation and taking and having the opportunity to either reward a worker doing a great job or instruct a struggling worker in acceptable operation techniques."

Accountability and Tracking
The lack of a reliable method of accountability and performance management has long been a major drawback to the ability of companies such as CLMI to convince clients to institute leading indicator-based safety programs. However, the company recently developed a Web-enabled software innovation to provide the lacking accounting and performance management capability.

The software application applies proven accountability and performance management principles to the areas of risk control, loss prevention, and regulatory compliance. It identifies important risk-reducing and compliance-related activities for company employees, links them to the resources and tools required to complete these activities, and tracks their completion. Through this process, a robust accountability system is created. By identifying responsibilities and tracking completion, client companies are able to proactively work with supervisory and management personnel to ensure that key activities are completed in a timely manner. To add to the personal acceptance of the program, a reward and incentive feature can be added to the system to promote the completion of key risk management activities.

It focuses on leading indicators for safety performance of the organization's supervisors and managers, rather than trailing indicators of incidence rates. Efforts are transferred from reactive management of claims and incidents to proactive activities that prevent incidents from occurring. And the application can integrate a variety of universal rewards programs.

Through advanced universal reward platforms, employee points are consolidated and tracked in one convenient program, until an employee redeems accumulated points for desired merchandise, travel packages, floral deliveries, frequent flyer miles, or more. The intent is to simplify incentive program management for the corporation, while simultaneously granting employees the limitless choice of products and services they would expect from a traditional shopping mall.

Benefits of Web-Enabled Programs
When looking for a high-quality universal rewards program, verify that the program works equally well whether rewarding attained safety goals or recognizing superior job performance or employment anniversaries. There can be great benefit if the universal reward program is Web-enabled.

One program, for instance, lets participants simply log onto a Web site and have instant access to a wide range of "storefronts." These storefronts are constantly updated; the incentive company picks up all shipping and return costs on merchandise ordered.

To identify a top-quality, online universal reward program, look for the ability of the client company to add a page of its own preferred merchandise and suppress merchandise or services it does not wish to offer. Preferable programs allow employees to customize the program to their needs by creating a "wish list" and be notified when the required number of points is met for their desired merchandise. A premium program allows employees to customize the program to highlight offerings in keeping with their individual hobbies and preferences. Daily sale items and specials are displayed on the homepage.

"At CLMI," says Pollock, "we have purposely stayed independent of the rewards end of the business. This has allowed us to concentrate on our safety program and ergonomic specialties. At the same time, it means we can choose to work with those companies that are the most technologically innovative and understanding of our specific needs. The universal rewards program selected for incorporation can make or break a leading indicator-based safety program."

Leading indicators are the wave of the safety program future. The far-reaching, wide-ranging possibilities are revealing themselves as companies conceive ways to integrate their services on behalf of employee safety.

This article originally appeared in the January 2003 issue of Occupational Health & Safety.