It's All About Communication

This is the key to any program, Keith Lauby says. The amazing thing is how many managers fail to realize it.

Editor's note: You'll find smart ideas in this discussion to help you motivate employees or revive a slumbering incentive program. Consider "low-cost, no-cost" incentives at first, run two contests simultaneously instead of one, and offer two types of goals, suggests Keith Lauby, a safety product manager for human resources solutions provider G.Neil (www.gneil.com) of Sunrise, Fla. He discussed goal-setting and management of incentive programs in a Dec. 6, 2004, conversation with Occupational Health & Safety's editor. Excerpts from the conversation follow.

OSHA has been fairly skeptical about safety incentives over the years. What do you think they're missing when they say they don't think safety incentives are a good idea?

Keith Lauby: I think their issue would probably come down to not the incentive itself, but how it's used. I would imagine that most companies have probably a general idea of how they think incentives should be used. Maybe that's the right idea. I would guess in most cases it's not.

How do you think they are being used, and how should they be?

Lauby: The mistake that most people get into is--and this is with any program that they set up, whether it's a safety program or not--they kind of put everything into place and figure that, if they offer an incentive out there, that's going to be what drives the entire program. They just kind of let things run on their own.

It becomes the driver rather than a piece of the pie?

Lauby: Exactly. What people do is--and it's understandable--they kind of forget about what they've set up. They don't go back and revisit things, measure it and evaluate it, and, if it's not working in this particular instance, change things so it does work.

Good point. Obviously, there are quite a number of companies that do use them correctly. What are they doing right?

Lauby: That's just it. Rather than use an incentive like currency--you know, people kind of view incentives as payment for doing the right thing. I think the companies that are using them right recognize that incentives are really a form of communication. You're using an incentive to communicate a message to an employee, whether that message is "You're doing the right thing" or "You're doing a good job of working with your other employees."
Businesses should challenge themselves to clearly define whatever message is behind their recognition and then identify the right ways of communicating that message with the right incentive.

You mentioned cash doesn't work, and I think that's pretty well agreed. But why is that?

Lauby: First of all, there are so many other things that are out there. I think the big thing for a long time, and especially now, are low-cost or no-cost incentives. I think those can work every bit as well as the high-priced counterparts if used properly.

You don't want to get into the mistake of having cash incentives, or comparable things like that, setting the level of expectation. Because a lot of times, you're only going to save those for special occasions. Use those low-cost, no-cost incentives frequently to reward individual behavior and then ante up for the big payoff, whether that is a cash incentive or time off or a cruise or even something that's a little less pricey. But that's something that can align your entire workforce underneath your program, build teamwork to acquire that goal.

What are you thinking of when you mention no-cost incentives?

Lauby: Different people are motivated by different things. If you just walk in and pat some guy on the back and say, "Hey, you did a good job with such-and-such," that's an incentive.

I see what you mean. That's true recognition for a job well done.

Lauby: Exactly.

That last point fits well with something I've heard before. Some employers seem to believe a program has to start with a fairly hefty cost that ramps up every year. Is that necessarily true?

Lauby: No. That kind of gets into the whole idea of contests. Contests can work if done right, but the last thing you want to do is set up a system where people only follow your program when there's a contest going on.

And when there's not, they immediately break off.

Lauby: Exactly. One way of doing that is to have two contests. I've heard of companies that do this. They do the general one that's companywide that revolves around the program they've got going. And then they've got a second one that's just for their supervisors and managers. Because those people are the key. The second contest is for them to keep the program and the focus going long after the initial contest is done. Eventually the lines of the contest get blurred and it kind of takes on a life of its own, which is really what you're after.

At the beginning they may be independent, but everybody's aware that they're both there, right? It's not that you're not trying to hide the ball from either group?

Lauby: You could do it either way. You don't necessarily have to let everybody know that the supervisors are involved in a contest of their own. Sometimes that could take some of the steam out of the program. But either way, a lot of times when you talk about incentives, you forget about incentivizing your management team.
People make the mistake of figuring that incentives are only for your line staff, but the supervisors and managers are a key part of this program. You need to incentivize them, as well.

Good point, because they're the ones who keep the interest up, the ones who make it lively and active. You mentioned you could get into the trap of having contests almost exclusively and people turning off when they end. You talked about a dual track; are there other ways to use contests?

Lauby: There are other ways, too. The way I look at programs, and the key to successful programs, is it's all just about communication. Don't put so much emphasis on contests that it takes over the program. A contest should be kind of a subtle addition to everything else you're doing on a daily basis. So as long as the communication about the importance of your program is there at the beginning and it's there at the end, the contest is just a continuation of what you've been doing all along.

And if you are a company that communicates well with its employees, both supervisors and line staff, then you'll be able to incorporate a good incentive program in a way that works pretty well.

Lauby: Exactly. Communication is the key to any program. And it's amazing to me the number of people that fail to understand that concept.

Maybe it's not well understood. I hadn't thought of incentives myself in that way before, so maybe I had missed it, as well. It seems to me incentives would be harder to use in a very high-turnover industry. It could be low pay; it could be the work is difficult--I'm thinking of health care and some other types of industries. Do you find that to be the case?

Lauby: Yes. It can be a real challenge to build teamwork under a given goal when the team is constantly changing, there's no doubt about that. But it's easy sometimes to use as an excuse for not even starting a program. I think if done properly, if you follow the steps we're talking about, your recognition program is going to work even with turnover. Then, if you put some resources behind reducing that turnover, you're going to find that your program will really work well, with reduced turnover.

Any industry has high-achieving companies, companies that seem to manage their affairs better than others in their industry. I was reading recently about a Baldrige Award winner for 2004 that makes frozen food products. One of the things that seemed to be a key for them was they had reduced their turnover from double digits to very low, which for their industry is unusual. If you are in a high-turnover industry, maybe you can use this program and some others together to become less prone to that problem.

Lauby: It's very possible that one of the causes for turnover is safety-related issues. So if you have a safety program that you institute, in itself it could result in reduced turnover.

This is a point we stress in our magazine, and you've just brought it out: You don't have to look at an incentive program or a safety program as a cost. It can be a money-saving thing, and a gain.

Lauby: Yes. Unless you look at it that way . . . . I think that's the other challenge that a lot of businesses face with these programs. It's typically an added responsibility for some manager along the line. A company's not willing to invest their resources into the program, or sufficient resources. So they find some guy who's doing a good job out there and say, "Hey, why don't you take on this responsibility, too?"
Needless to say, he's got a pretty full plate already. This person will go ahead and do as well as he can, but then once he puts everything in place, his attention and focus shift to other things.

If a company puts the resources behind their program to begin with, recognizing the fact there's going to be payback at the end, it's going to be a lot easier for the manager. It's going to be a lot easier for the company to see that gain along the way.

As a manager, you can outsource a little of the management of an incentive program?

Lauby: Outsourcing is starting to really take off. I think we'll see a lot more of it in the next five to 10 years for a number of reasons. You could have a company come in and run your entire program, if you want. Or you can do different things like have an outside company manage your incentive program. There's help out there; it's just a matter of whether or not you want to invest the resources at the front end.
Again, you can do the low-cost, no-cost things. I don't think there's anything wrong with starting out that way. Do a little bit of experimenting. Find out what works with your workforce. If you know your workforce and know what motivates them, or even if you don't, experiment with a few things first. Then you'll get to the point where you know what works with these people, and you can look for alternative means of recognition.

You mentioned earlier that it's a bad idea to set up a program, start it like a clock, and then come back in a year and decide how well it worked. You need to watch the program constantly, I take it, and tinker with it if it is not working like you think it should.

Lauby: I think the biggest mistake companies make is doing just that. They put everything in place and figure it's going to run on its own. If you don't come back and change things, spice things up again, keep things moving in a forward direction, it becomes a little bit like background music. After a while, you hear the same thing over and over again, it starts to become invisible. You tune it out.
Whether it's simple things like changing safety posters or an entire campaign that you're going to build around your program, do something to make some changes along the way to keep that visibility going.

What types of incentives are hot right now?

Lauby: That comes down to your program and what it's there for. I think a company needs to do a real hard needs assessment to define its goals. Once you have those goals established, you need to come up with an incentive that matches the goal.
You don't want to set individual goals that can be attained on a frequent basis and have a real high-ticket incentive behind it--that's where the low-cost, no-cost thing comes in. . . . You build up for your department or for your company so the people will get behind your program, with a higher-ticket incentive.

Is it possible to overshoot? Say you have a high-turnover site, a high incident rate, your worker's comp costs are getting worse--can you expect too much?

Lauby: I've always been in favor of regular goals and stretch goals.

What do you mean by that?

Lauby: You have a regular goal that your individuals or your team is supposed to meet. And I keep bringing "team" back into this because I think that's where your big payoff is. When you can get everybody working together to achieve a goal, that's when you really see some success in your program.
So have team goals that can be met based on the needs of the business. But then have what's called a stretch goal, something that takes just a little bit more effort. Not too much, but enough effort to where you really reduce some costs or you really see a payback on that. They might not meet that stretch goal, but if they don't, then guess what? They've already met the goal.

I see what you mean. You make them aware of both goals, don't you?

Lauby: Definitely. And your incentive is commensurate with each one. If they meet the goal, they get one incentive. If they meet the stretch goal, they get that much nicer an incentive.

That's a good idea. Is there an optimal team size?

Lauby: That kind of depends on the needs of the business. You could have an entire workgroup, a department or that sort of thing. You could break it up into smaller groups within a department and have some friendly competition. That's always a good way of getting people to work together. Either way, if you can find a way of building that teamwork, that's where your payoff really is in any type of program.

You say "friendly competition." Everybody can get the goal if they work at it. It's not like if my group gets it, the group next door cannot.

Lauby: That's right.

Any final thoughts?

Lauby: I keep bringing up the term "communication." To be successful, I think a company needs to have buy-in from the top down. And the top needs to have the communication, all the way down to the lowest level, of their support for the program. You're never going to be successful if you don't have that.
Once you have that, then you do your needs assessment and determine the quantifiable deliverables, set your goals around those deliverables, and then put an incentive program with the regular goals and your stretch goals behind it. And as long as you keep revisiting the program and keep things moving in a positive direction with your communication, you're going to have a successful program.

What you've just said answers pretty well the stock objection I always hear to incentive programs: "I'm not going to pay these people to be safe because I expect them to be safe," and "I'm not going to pay them to do their job because I'm already paying them to do their job." You're taking it a step beyond that to say it's part of a broad communication strategy with your workers that's got to pay off.

Lauby: Right. If the ROI is there, then why not do it? That's basically what it comes down to. There's no reason not to.

This article appeared in the January 2005 issue of Occupational Health & Safety.

This article originally appeared in the January 2005 issue of Occupational Health & Safety.

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