Can You Make Your Company Safer?

Many employers succeed by focusing their rewards on successes and issuing them immediately to maximize reinforcement of the behavior.

• By Robert S. Dawson, Robert S. Peterson
• Jan 01, 2007

NO one wants an unsafe work environment. Unsafe or hazardous spots in your environment must first be reported before they can be corrected, however. That takes cooperation from all employees, including those reluctant to blow the whistle.

In 2004, millions of work-related illnesses and workplace injuries occurred in America. The biggest culprit is repetitive stress or motion injury, often requiring surgery that can keep a worker grounded for weeks. Worker's compensation rates are increasing. Insurance companies will decline coverage to employers with high accident rates. In the same year, 57 percent of OSHA inspections were construction-related and another 22 percent were in manufacturing. OSHA reports that 32 percent of work-related injuries occur in goods-producing industries and 68 percent are in services industries. The latter figure shows that services industries outnumber manufacturing, but it also shows service industries are not free of accidents. In FY04, OSHA's inspections, regardless of reason or industry, numbered nearly 40,000. With that level of aggressive enforcement, zero accident rates are imperative.

According to OSHA, participants in its Voluntary Protection Programs are saving millions each year because their injury and illness rates are more than 50 percent below the averages for their industries. And according to the Liberty Mutual Research Institute for Safety, every $1 invested in safety yields between $3 and $6 in savings.

"We strive for an incident-free workplace and an environment that supports our clear and simple program objective: 'Nobody Gets Hurt.' Our management . . . is committed to driving the rate of injuries and accidents as close to zero as possible," ExxonMobil Senior Vice President Ed Galante said.

Chronic Underestimates: Does Your Company Track All Costs?
Safety and health professionals know that reducing the risk of accidents and illnesses can greatly reduce insurance costs. Yet most businesses miscalculate the total cost of accidents--costs beyond insurance. Unfortunately, such miscalculation leaves management uninformed and, thus, more likely to question the cost of safety and health programs.

One analyst separates direct costs from indirect costs. Direct costs are related to specific incidents and are conspicuous and easy to track (e.g., insurance and first aid supplies). Indirect costs, however, involve non-cash resources that are less tangible and conspicuous (e.g., legal counsel, human resource department time, and retraining). A matrix outlines the total cost impact, including eight direct costs and 13 indirect costs--21 distinct costs that arise from each safety or health incident. Safety management programs should keep track of all 21 costs. ("What Do Accidents Truly Cost? Determining total incident costs," by Jeffrey LaBelle, Professional Safety, April 2000, American Society of Safety Engineers)

"Organizations are beginning to realize that safety pays tremendous dividends in terms of lower workers' compensation and insurance costs, as well as improved employee productivity, morale, and retention," said Alan C. McMillan, president and CEO of the National Safety Council, in a recent Newsweek supplement.

Changing How Employees Think About the Workplace
Safety managers, whether full time or wearing safety as a second hat, can change unsafe work practices. A well-planned safety program can turn even a part-time safety manager into management's new fast-track hero. Many companies' safety programs are motivating employees to be so safety conscious that accidents are reduced to near zero. Such benefits are attainable through a systemic, company-wide program that grabs employees' attention and changes their behavior for the long term. But employees must view the safety program as both fun and worth their effort. All this requires that "best practices" working elsewhere be implemented to avoid common safety program pitfalls.

"Safety performance is a critical leading indicator of the overall quality and competence of an organization," Galante said in the same Newsweek supplement. "It has been our experience that a disciplined approach to improving safety performance benefits all aspects of our operations. Our focus on safety has also helped us achieve lower costs, better flexibility, and higher plant utilization, all contributing to the bottom line."

"Whether your employee sustained an injury at work or at home, the . . . employee is not at work," Liberty Mutual President and CEO Edmund F. Kelly said in Newsweek. "If you support safe behavior as the culture at work, it will most likely become part of the culture at home."

Good business leaders understand human nature, care about each worker's well-being, and recognize that a company's employees are its greatest asset, McMillan said. "For them, employee safety is non-negotiable, uncompromising, permanent."

The Role of Incentives
But in our competitive and frantic global marketplace, the safety and health issue is not typically at the top of corporate concerns. Effective safety programs cannot rely solely on safety signs. As one expert on safety programs says, "The key to success is execution." ("Accentuate the Positive: Rewards Should Be Presented as a Token of Gratitude, Not Behavior Control," by Audrie Ames, Safety + Health, July 2005, pp. 24-27) Just focusing on the positive--Let's all be safe--can boost company morale and spell program success.

Successful safety programs focus on behaviors: what people must do to be safe. Rewards should be positioned as management's expression of appreciation to workers for being safe. Rewards should focus on successes and should be issued immediately to maximize reinforcement of the behavior. Rewards with some showcase value work better than rewards that employees pocket or put away.

Such behaviors include one employee's coaching another about a specific safe practice or daily notices and reminders about upcoming situations that may need a heads-up. Such behaviors include safety audits of specific environments to measure progress toward objectives. But the reporting of near-misses also must be a targeted and encouraged behavior.

All safety programs must have management front and center as the sponsors of the campaign. Such programs work when employees see their supervisors and top management as serious about safety and when management views employees as the key players on the safety team. After all, the employees probably can list countless safety concerns with little provocation. The question is, why aren't they coming forward with the list? Not only may there be no incentive for them to do so, but also they may also be scared to cite safety problems. This reluctance is often the biggest hurdle to changing the workplace safety culture for the better.

How Safety Programs Go Wrong

• A faulty definition of safety: Organizations that define safety as loss prevention are not serious about safety. Safety signs alone will not work. The culture must change, not the signage, and the focus must be on achievement and success, not losses and costs. Accidents can no longer be seen as acts of God; they are a breakdown of the safety system.
• No teamwork: An effective safety and health program is a three-legged stool: employees, their supervisors, and management. Take one leg out, and the program collapses. Proactive participation is needed all around. Each member of the team is motivated to change the culture toward zero tolerance.
• Unintended results: Programs that focus merely on accident-free days actually may discourage incident reporting, leaving unsafe conditions to prevail unchecked. Such incentives can infect employee morale with the notion that management cares more about OSHA reports rather than real safety.
  
  
• Poorly constructed objectives: Safety programs that have no clear objectives cannot work well because employees do not know what is expected of them. What's more, the safety manager cannot measure progress if no benchmark goals and objectives are established at the beginning. According to the American Society of Safety Engineers, the greatest problem with safety programs is measurement.
• Money doesn't talk: Monetary rewards are not effective. Employees subconsciously perceive them as a payoff for being safe.

Successful safety programs are using unique incentives to help change the workplace culture:

• Accumulated points used for merchandise redemption in an incentive catalog.
• Gift certificates, dinner certificates, movie and athletic tickets.
• Achievement cards that, once filled, can be redeemed for rewards.
• Management randomly calls employees with safety questions; correct answers earn points toward merchandise.

Getting Started
Safety programs, as mentioned, need balance to be effective. Poorly designed safety programs can prompt employees to hide accidents. The psychology of motivation is complex, and a rich body of corporate "best practices" is available. Starting without such knowledge will almost surely lead to pitfalls that could have been avoided.

But starting from scratch isn't necessary. A safety program professional can show you how to set up a program nearly free of administrative hassles and recordkeeping.

Four Case Studies
1. After trying several approaches to safety on its oil rigs, a national wholesale oil and gas company decided it needed a more comprehensive approach to changing safety habits. Safety programs, including ongoing safety training and spot incentives, created short-term results only. Traditional safety indicators such as number of days lost, reported incidents, and days worked without incidents were used as objectives for previous safety campaigns. While modest success was evident during the incentive program periods, the metrics showed a different story during non-incentive time periods. Budgetary concerns were cited as the primary reason for not conducting a longer-term incentive program that would blend in with the safety training.

A gift card provider performed a complete review of past incentive programs and a study of safety-related behaviors. The findings of these combined activities confirmed that the previous incentive programs had nothing more than a short-term effect on safety behaviors. Based on these findings, the card company recommended a program structure that would reward employees for demonstrating safe behaviors. Working with company management, a set of compliance standards for safe habits was established. Included in these standards were simple activities, such as repetitive motion activities and stepping on and off of rig platforms.

Results: Utilizing the agreed-upon compliance standards, a program was developed to reward employees with "on the spot" recognition when they demonstrated certain critical behaviors. Monthly safety meetings provided an opportunity for review of the compliance standards and the behavior changes desired by the company. Employees quickly learned that their opportunity to earn incentive awards was tied directly to their individual efforts. Management personnel were empowered to provide the on-the-spot recognition awards through a unique award vehicle. Participants in the program were provided with a lottery-type scratch-off card each time they displayed the desired behavior change. Award credits earned on each card were accumulated and redeemed for brand-name merchandise from an awards catalog.

The program produced the desired long-term behavior changes. As a result, the company reduced direct costs by 43 percent and indirect costs by more than 58 percent. The same program was used at the company administrative office, where repetitive motion (such as typing on a keyboard) caused injury. In this case, employees were rewarded for adopting behaviors that prevented carpal tunnel syndrome.

2. A unionized trucking firm with 300 vehicles was experiencing rising operational and safety costs. Key concerns were the rising cost of fuel, driver retention, and the number of events/collisions per million miles driven by each vehicle. Working with the gift card company, the firm was able to identify improvements needed in the areas of safety and daily operations. Specific objectives based on current metrics were established and introduced to the employees as an incentive program.

The company required a flexible incentive award, one that could be used for both safety and operational behavior change recognition. Participants in the program (including regional managers, depot managers, and drivers) were given the opportunity to earn scratch-off cards for achievement of specific objectives that included safety, fuel conservation, and willingness to work odd hours and shifts when asked. The program was established as a yearlong effort, with participants having the ability to earn incentive award cards each week (drivers) and monthly (managers). Each card presented a chance for the participant to earn credits based on the number of "wins" uncovered on their cards, and every card earned credits, even those with "zero" wins. Credits were accumulated by participants and redeemed for brand-name merchandise.

Results: Participants rated the program as "extremely" positive on feedback surveys, and the results for the company proved it paid off in several ways: Driver turnover was reduced by 50 percent. Based on company estimates of a cost of $8,000 to replace a driver, the savings were $56,000 in the first year. Fuel costs showed an improvement of 0.12 miles per gallon, a savings of $30,000. The number of events/collisions per vehicle miles was reduced by 35 percent, creating a benefit/cost ratio for the safety program alone of 3.8 to 1.

3. An office equipment manufacturer operated several distribution centers throughout the United States, with employees at each required to work in a team environment to maintain a safe workplace. Monthly reports were produced detailing the number of accident-free days. Charts revealed the results of each team's effort to maintain an incident-free environment. A review of recent activity revealed that employees were not reporting many incidents deemed to be "minor." Although some of these incidents created loss of work and subsequent costs for temporary labor, they were not reported out of fear of damage to the team's safety record. Working with company management, the gift card company designed and introduced a new safety program that obtained employees' buy-in by allowing for both team and individual incentive awards.

All employees participated in a new safety training program. The program included educational sessions about safe behaviors, as well as the financial impact of insurance and other costs incurred when accidents took place. Employees were rewarded to work both as a team and as individuals to report any unsafe conditions. Incidents reported did not result in a loss of incentive award credits; rather, each reported incident was followed up with a written statement from the team outlining what happened, how it happened, and how the team would work to ensure this type of incident would not recur in the future. These Action Reports were shared by all teams each month. Individuals and teams earned scratch-off cards. Cards were distributed based on achievement of weekly objectives, successful completion of safety training classes, and non-repeat incidents. Award credits were available on each card, with a potential for a "jackpot" award on every card. Award credits were redeemed for lifestyle merchandise supplied by the card company through a custom designed catalog.

Results: This program showed how an increase in safety could give the company new options to improve overall benefits for the employees. The program appealed to employees because it was simple and fun. In addition to creating a safer workplace, the company realized significant savings in its $350,000 annual worker's compensation premium.

4. A construction company that provided earth moving and property clearing services became concerned about the number of incidents that caused major injuries to its employees. The increase in incidents was tied directly to the increase in building activity, as well as the demands for meeting contractual obligations to complete a job. Incident records and related documents clearly showed that while the company was in a rapid period of growth, the number and frequency of safety training meetings was lacking. Supervisors interviewed simply stated that there was "no time available" in a given week to conduct safety meetings--and even when there was, the employees were likely to return to their own bad habits shortly after safety training. While incentives had been used to change behavior in the past, supervisors cited too much administration, lack of enticing awards, and a lack of funding as reasons for past incentive program failures.

The gift card company introduced a program to this company's management that uses the lottery-type scratch-off card and imposes few administration responsibilities or requirements on a fixed budget (including no cost for merchandise redemption). The program that was used here also included a longer period of repetitive enforcement in order to achieve the behavior changes desired. Cards were used to reward both supervisors and employees for completion of monthly safety training courses and also as on-the-spot recognition throughout each job site on a weekly basis.

Participants used their accumulated incentive award credits to redeem high-end merchandise including brand-name electronics. These awards appealed to employees and supervisors alike. In addition to earning minimum credits on each card, every employee realized that with each card he received, there was an opportunity to earn a "jackpot" award.

Results: After the first six months, the company reported a 25 percent reduction in incidents requiring hospital treatment of more than 24 hours, a 60 percent reduction in the number of incidents involving a loss of a limb, and a 48 percent reduction in accidents involving company equipment.

This article appeared in the January 2007 issue of Occupational Health & Safety.

This article originally appeared in the January 2007 issue of Occupational Health & Safety.