Incentives can boost your training's quality and benefit your bottom line.
- By Kara Sibilia
- Jun 01, 2008
It’s no secret that the cost to acquire worker’s compensation
insurance is extremely expensive in the
United States. Every day, employers deal with these
rising costs, as well as the related costs of injury pay.
Employers spent approximately $50.8 billion in 2003 on
wage payments and medical care for workers hurt on the
job, according to Liberty Mutual, a leading global insurer.
The best way to control the cost of worker’s compensation
insurance premiums is to avoid injury claims, according
to the article “How Can You Control Workers’
Compensation Costs?” (which was posted on www.all
business.com). Additionally, the article states that a safe
environment, effective safety training, and ongoing programs
to promote safe work habits are keys to preventing
Implementing a good safety program can take a great
deal of background research to see what will be most effective
for an organization. The use of a traditional safety
incentive program—one that rewards employees for a
period of time with “no accidents”—has been a standard
practice for many years. However, some companies are
wary of implementing a “traditional” safety incentive
program because they feel these programs only prevent
employees from reporting an injury/problem and don’t
encourage proactive behavior.
Safety author Randy DeVaul, writing in the January/
February 2007 issue of MCMagazine (from the National
Precast Concrete Association), put it this way:“Too
often,employees choose to not report something because
of the backlash or reprimand that occurs from management
if an injury occurs. Having bonuses or incentives
tied to zero injuries and losing them when an injury does
occur enhances the no-reporting practice by both employees
and managers. You do not want that to be the
common practice, as you are waiting for a fatality to happen
and you’ll never see it coming.”
Rewarding Proactive Behavior
The best way to avoid this trap is to reward proactive behavior—
not just X amount of time with no accidents,
but rewarding for attending training, offering process
improvement suggestions, promoting safety awareness,
etc. According to the 2005 Liberty Mutual Workplace
Safety Index, 26.6 percent of CFOs stated “better training”
as their number one preferred safety intervention.
If better training is the primary goal, what is the
most effective way to structure a program? According
to OSHA, safety and health management best practices
include these items:
• Establish and communicate a clear goal for the
safety and health program and objectives for meeting
• Provide visible top management involvement in
implementing the program.
• Encourage employee involvement in the structure
and operation of the program and in decisions that affect
their safety and health.
Once parameters are established, you then need to
determine how to create a culture of involvement and
excitement for the program(s). What do you reward
with, and how do you keep program costs under control?
A 2003 study from the Society of Incentive &
Travel Executives (SITE) Foundation found that employee
performance is markedly better when in pursuit
of a non-cash incentive. Participants working toward
a non-cash incentive improved performance by
38.6 percent, while there was only a 14.6 percent lift
created by a cash incentive.Many companies are opting
for non-cash incentives, including merchandise,
gift cards, and travel, because the value of these rewards
far outweighs the cost, especially when it comes
to merchandise incentives.
Merchandise is a very cost-effective, economical
choice for incentive rewards. Many branded products
available in the incentive industry are offered through
brand (or manufacturer) representatives. The benefits are:
Cost savings. Manufacturer representatives have the
ability to provide the “factory direct” price for the merchandise,
so companies pay significantly less than if they
were to purchase at retail.
Logistics. Manufacturer representatives can ship
merchandise directly to the employee, eliminating the
Variety. Manufacturer representatives offer many different
brands and product lines, so companies have a
choice of incentive offerings sourced through one contact.
Keys to Successful Safety Culture
Knowing the components of a safety incentive campaign
and evaluating those campaigns to see what ultimately
works the best for your company are the keys to
developing a successful safety culture now and in the future.
A properly structured safety incentive program
not only encourages employees to perform well, but
also helps to reduce compensation costs, thus increasing
the bottom line.
This article originally appeared in the June 2008 issue of Occupational Health & Safety.