7 Steps to Safety Incentive Success
For one thing, involve employees in setting goals. If participants are involved in setting their own targets, they'll often set the bar higher than management would.
COMPANIES all over the world are being challenged to do more with less, gain a competitive advantage by maximizing the effectiveness of their employees, and boost productivity in their operations--none of which is an easy task to accomplish. Although there's no silver bullet to magically attain these noble goals, there is a proven methodology for achieving just that in your safety incentive programs.
Now, more than any other time in recent history, the business world is not only focused on "what have you done for me lately," but on what are you going to do for me tomorrow. Organizations unable to maintain world-class growth rates are finding themselves at the mercy of skittish investors and unforgiving stock markets . . . and YOU don't want to be one of those companies! Fortunately, well-structured incentive and recognition programs are highly effective methods for improving safety and operational performance. We're going to review how you can ensure that your incentive programs are designed for success and driving the goals and results that are the most vital to your organization. Equally important, we'll review how to avoid the pitfalls that can derail your program.
Unfortunately, many businesses are still taking a rather casual approach to motivation and strategy. For an incentive program to be strategic, it must be linked to business strategy and should change to reflect changes in that strategy when they occur. Yet often this is not the case, and some safety programs continue to be operated under outdated goals left over from the program's inception.
I'd like to introduce you to a seven-step process I call the Success Formula. Each step will help you achieve success when developing an incentive or recognition program, and I'll warn you right up front that problems arise when you try to cut out a step or shortcut elements within a step. The up-front effort pays off handsomely in your end results! Likewise, cutting corners cuts into your success dramatically.
Step 1: Strategic Planning
Think of your safety program as a form of target marketing, addressing specific objectives with a specific strategy and set of tactics that will provide you with measurable results. Why are you conducting the program, and what precisely are you trying to accomplish? What's a reasonable improvement to expect? State your goals in the most specific terms possible.
The second part of your pre-program planning is identifying what's most critical to achieving success. Essentially, start backward from your desired results. It's important to identify the attributes, skills, and knowledge that employees will need to have in order to get those results.
This exercise is easier when you think of this in terms of your top performers. What behaviors do they have? What are their triggers? What makes them successful? After all, it's focusing and directing those behaviors that are going to get you the results you're seeking.
Which brings us to another critical point: Understand your audience. Whom are you targeting, how can they impact the goal, and what are their demographics, motivations, circumstances, capabilities, and buy-in? What are they willing to do, and what are they able to do? Be certain your program includes all stakeholders in the achievement of a goal (e.g., warehouse workers and warehouse administrative support). If you don't include everyone who can influence the goal, you may have disgruntled employees who will try to sabotage the results for the program participants.
A common pitfall to be avoided is that many incentive programs simply reward the top 10-20 percent of individuals doing a job well. The issue here is that the top 10-20 percent probably will achieve the results anyway because it's in their nature as top performers. On the other hand, the bottom 10-20 percent of performers are unlikely to change, regardless of the reward. The key is to look for ways to move the middle part of the bell curve--those individuals who, with the proper communications, training, and incentives, can improve and can achieve stronger performance results. It's about moving that middle 60-80 percent of your employees toward enhanced productivity and performance by focusing and directing their efforts. That's where you will see the greatest impact in results, if for no other reason than the sheer size of the group.
Step 2: Alignment
In Step 2 you'll turn your focus to where you are now, where you want to be, and what it's going to take to get you where you want to be. You're going to drive your results by aligning your employees with the identified behaviors and activities that will get you there. Draw a direct link between what each individual can do differently in his/her job in order to contribute to the program's strategic goals.
You also need to contemplate the obstacles you'll face: What currently stands in the way of achieving the goals--market conditions, training levels, management problems? What actions, if eliminated or repeated more often or more effectively, will yield the desired results? Your program will have to address these obstacles, or it's likely to fail no matter how desirable the awards.
Most seasoned executives already have a sense of what needs to be done to achieve a result. For example, a plant manager might watch for absenteeism or defect rates, while an R&D manager might keep an eye on the number of new projects starting up each quarter, and, of course, sales leaders keep their eyes on that top-line revenue number. An effective activity in the alignment phase is to ask the leadership team members to come up with rankings of the most important activities they believe will help attain the goal you've set in Step 1. The key questions are these: What are the real drivers of the value in our business? If we could gain a competitive advantage by improving our performance in two or three areas, what would they be? Take that list of corporate success drivers and align your program behind them.
Step 3: Program Structure & Budget
In this step, you begin to build a scorecard tailored to the measures that fit your particular challenges, as outlined in the former two steps. These are the metrics on which you will be rewarding your employees and measuring the success of the program. The specific questions to ask yourself here are: What are the specific goals; what do people have to do; how will they be measured; how will the improved performance be measured?
How much will you spend on the program, and for what? How will expenses change based on various outcomes--positive or negative? It's always beneficial to include both long-term and short-term goals in your program to maintain a sense of urgency and to keep employees engaged who may feel the ultimate goal may be challenging to reach.
Step 4: Communicate & Train
This is probably one of the most important steps in the process--you simply cannot over-communicate. Even the most compelling vision, or a program strategy that looks absolutely failure-proof on paper, doesn't always hold up to the test of implementation and execution. Study after study tells us that poor communication is very often at the heart of ineffective or failed programs.
If you are clear and consistent in your communication, you have not only the "what," but also the "how" to getting the tasks you need done. If you can develop a solid communication plan that follows through on your vision and your strategy, then your incentive program is destined for success.
And that communication includes training when it's required to help participants perform at the desired level. Some of the communications can be done through e-mail and print materials. Most has to be done face to face, in regular meetings, so that people can ask questions. Good communication helps people to understand what management wants, but also how the program is progressing--the challenges as well as the successes. Your action item in this step is to decide: What has to be communicated in order to achieve the goals; how and when will the message be communicated; and what will be the message?
For example, if your goal is to reduce costs, employees need to know the cost of things so they can be more effective in spotting cost-saving opportunities. An effective communication plan puts program participants "in the know." It gives them all of the information they need to be successful in earning incentives, which ultimately helps the program reach its goal.
Step 5: Measure
Performance measurement can be a difficult tool to implement. On one hand, all of the alignment and communication are no more than nice things to do unless they translate into better performance--and performance isn't known until it's measured. On the other hand, measurement can often be wrongheaded, demoralizing, or simply irrelevant. Unfortunately, this is the case in some safety incentive and recognition programs, where measurement feels more like reprimand.
In this step, your task is to determine how you will measure the payout in terms of financial and non-financial value to the organization. Taking a business plan approach is the best way to ensure your program takes into account any outside factor that could influence the outcome. You'll want to track results and collect data about the process toward results to determine the high-gain activities that led to success. In order to determine your desired results, you'll need to identify the following before you begin the program:
1. Expected level of performance. This is what you expect to achieve without the incentive program. Starting with this information ensures you are only paying for performance above and beyond your current results.
2. Desired level of performance. This goal is what you would like to achieve if the program produces as expected. Be realistic--look at your past performance and determine what you believe is reasonable and attainable.
3. Incremental increase in revenue or reduction in costs that you expect the program to generate.
4. The gross profit value of the incremental change.
5. What you plan to invest in the program to achieve the new result.
You'll also want to measure a variety of objectives and make sure they don't compete with one another. For example, if an airline wanted to improve its departure timeliness, a single-minded focus on on-time departures could alienate passengers if gate attendants were hurried or rude or cause real harm if mechanics cut corners on maintenance. Think about the impact of the goals you set.
Measure intangibles as well as tangibles. The importance of intangibles is that they are often leading indicators--more effective at forecasting market direction--whereas financials let you know what has already happened. Thus, the number of new products in the pipeline or increased throughput levels are likely to be leading indicators of revenues tomorrow.
Involve employees in setting goals. Performance measurement can be both the carrot and the stick. If participants are involved in setting their own targets, they'll often set the bar higher than management would. If appropriately rewarded for meeting or beating the goals, the measurement will feel more like keeping score and less like a report card.
Step 6: Reward
Behavior is a function of its consequences. Simply put, if a behavior generates a reward, then that behavior will often be repeated. Rewards indicate that something has value. Linking rewards to activities and results links value to them. Organizations that want to change performance appreciate the power that rewards have to focus attention.
To be effective, reward systems require measurement and a clear definition of what's important for the company's success. Should awards be team- or individual-based or both? What types of awards will be used, and how will they be delivered? No award works for every program or audience; it's imperative to make sure the awards are compelling to your employees and commensurate with the effort they will need to put forth to attain them. Approach this step without bias or pre-conceived notions and understand the full range of award options available to you.
One attribute of today's workforce is its diversity. However, diversity brings many opinions about what makes a great award. Understanding your audience, their cultures, and what they value--in every geographic location--is very important. What is particularly important is that the reward is commensurate with the magnitude of the task for employees to be motivated to do it again. Being given a coffee mug for an accident-free year or saving $1 million in operational costs may not be viewed as a fair and equitable reward for the effort.
Rewards are a highly subjective topic; what is valuable, significant, or culturally appropriate to one person will fall far short of another person's expectation, so it could be very beneficial for you to get some expert advice from an incentive professional when selecting your awards.
Step 7: Evolve
Another critical success factor is that your safety program evolves. Continually monitoring and tweaking the program--keeping your strategy, goals, and people aligned--is paramount to avoiding the program's becoming an entitlement or, worse yet, out of sync with your current goals. Setting up the program and then forgetting about it quickly makes your program impotent. It must be dynamic to stay relevant.
Analysis and feedback are essential--programs often have quantitative and qualitative measures of success. Frequently compare your actual results with your plan and isolate any factor that could have affected performance in order to prepare a recommendations report for future programs and to continue to improve your program while it's running.
As I mentioned earlier, one of the many benefits of following these steps is that you gain insight about the process for accomplishing the results you set out to achieve. Continuously monitoring your program's actual results against plan provides valuable data about what's working well and what could benefit from an adjustment. The market or your business may change during the course of the program; your participants certainly will change as they gain new skills. Don't be afraid to leverage your learning, and refine your program as needed throughout its course.
There's a fine line between changing your program goals too often and not changing the goals enough. It does take a bit of practice and finesse to find the right balance. In general, the overall program should not change drastically, but the messages, expected results, business needs, successes, and many other factors should be reviewed on a regular basis to make certain they're still on target. Don't hesitate to change an outdated goal, but what you want to avoid is any perception that you're changing elements of the program to adversely impact people's ability to attain award levels.
So there you have it: the seven steps to successful safety incentives. Use these steps to ensure your programs are designed and executed for success and driving the goals that are the most vital to your organization.
This article originally appeared in the September 2007 issue of Occupational Health & Safety.