Safety Incentives: It's a Small World, After All

No ethical incentive provider would create a program to discourage reporting—tracking safety issues is an integral part of making a workplace safer!

• By Jerry Laws
• Sep 01, 2017

At the Incentive Marketing Association’s annual Summit, held in Orlando this July, OH&S was able to speak with Sean Roark, CPIM, who was just completing his term as president of IMA. We took the opportunity to catch up with Sean, who is a regular contributor to OH&S.

OH&S: Sean, have there been significant changes in the safety incentive landscape in the year that you’ve been president of IMA?
Sean Roark: Yes, several, and on many different levels. Some are ongoing, some will have huge long-term impact, and others have had an immediate effect on how incentives support safety.

OH&S: What issue has had the most immediate impact?
Roark: I would definitely have to say, the recently implemented OSHA guidelines regarding safety incentives. As most folks in the industry already know, for many years now, OSHA has been very supportive of performance-based awards, such as identifying a potential hazard or volunteering to serve on a safety committee. They are, however, equally strong in their criticism of outcome-based incentives, such as rewarding a month, quarter, or year of exceptional safety by a group with a celebration or reward.

OH&S: So is it your impression that OSHA does not agree that a low accident rate is a valid measurement of safety that justifies a reward?
Roark: I don't want to appear overly critical of the agency as a whole; I have some good friends who genuinely are out to make the world a better, certainly safer, place through their dedication to their jobs at OSHA. I believe that their talented staff can recognize, as most who have studied these programs would agree, that these types of behavioral performance improvement programs consistently improve safety. The inclusion of outcome-based rewards is a very effective and ethical part of any behavioral modification incentive program, such as a safety incentive program. The proof of this is borne out by even a cursory evaluation of white papers and actual program results. There is a wealth of empirical data reflecting the high success rate of similar outcome-based programs in diverse areas such health and wellness, customer service, and sales achievement incentive programs. OSHA policy makers, however, do not share this conclusion. If anything, OSHA seems to be more critical of the possible misapplication of the means to achieve the end, rather than the implied proactive thinking that positively applies knowledge and skill as a highly ethical and effective means to produce that end.

OH&S: But as a government regulatory agency, part of their job is to be sure that the rules of play keep the game honest. Have they always been unhappy with outcome-based incentive programs since Congress legislated the agency into being back in 1970?
Roark: Not really. For the first 25 years or so of its existence, OSHA policy had been favorable toward an aggressive safety incentive program to support positive behavioral change and promote participants in adopting best practices in safety and health, including celebrating and rewarding positive results by individuals and groups. Around the turn of the century, their policies started positioning that any reward which recognized a terrific safety record (or other "accident-free" outcome) represented some sort of an agenda of hidden intimidation by employers.

OH&S: What did that change in point of view by OSHA look like?
Roark: For example, an employer might want to say, "To celebrate everyone being safe for the whole year, we want to give each of you a nice gift!" OSHA took the much darker position that there was an implied threat. OSHA proposed that the message inferred in that scenario really was a subterfuge along these lines: "Here is a nice gift," the employer would say in the OSHA scenario, dangling the sparkling reward gift or cash bonus in front of the employee, "but you will not get the gift if you file an accident report or do anything that reveals you did not have a perfect safety record. Oh, and one other thing," the employer murmurs in a menacing tone, "if you report an accident, none of your friends you work with will get the shiny gift, and they will all blame you!"

They hold out that anything which rewards great outcomes is actually an implied bribe, with an inferred message that anyone who "plays ball" and doesn't report an accident or injury will benefit by getting a reward of some kind. To use their terminology, it is "encouraging under-reporting." This position completely disregards all of the independent studies that show that engaging an employee by showing gratitude and appreciation after the fact for excellent performance is one of the single greatest game changers in improving morale and changing behaviors.

OH&S: Is this just your point of view?
Roark: I reached my conclusions independently, but also find myself in the good company of some very smart people who are of the same mind. For example, the Incentive Federation, which takes point for the incentive industry on litigation, legislation, and lobbying on incentive matters. The IMA is one of the keystone members of the IF and recognize their stand to promote the goals of the safety industry, rather than subvert them. Many members of the Incentive Federation, and folks from IMA and other industry groups that have examined the Incentive Federation research on this, have reached similar conclusions to me.

George Delta, executive director and general counsel of the Incentive Federation, who has been involved at the very highest level of all of these developments for years longer than I have, summed up the apparent faulty logic used by OSHA to all of this very succinctly. Here's what he said in a May 2016 letter to OSHA:

"Given the considerable benefits of well-designed safety incentive programs, there is no justification for OSHA to place a stigma all such programs merely because it believes that some programs might lead to the underreporting of workplace injuries. Doing so is unwarranted, unjustified, unsupported by empirical (rather than anecdotal) evidence, and would not produce the result that OSHA desires—the reduction of injuries in the workplace. If anything, eliminating or discouraging the use of well-designed safety incentive programs is likely to lead to a more dangerous workplace."

OH&S: So are you saying that OSHA's position is groundless?
Roark: Regretfully, not entirely. My opinion is that their reaction is too broad. The fact is, there have been some bad programs which were purely designed to discourage reporting, but that doesn't mean that effectively designed safety incentive programs, even with outcome-based rewards, don't work. Here's a parallel: Everyone generally pays for things they want using cash. It would be an extreme over-response to suggest that no one should cash because of the acknowledged fact that there are counterfeiters out there; instead, we design controls and safeguards to ensure that with reasonable precautions, cash is a safe and effective business tool.

If we can all agree that if an outcome based program is poorly or malevolently designed, it can produce a less-safe work culture rather than the desired more-safe environment, then OSHA should promulgate guidelines that prevent the abuse of otherwise-ethical outcome-based awards, rather than arbitrarily asserting that outcome-based criteria are by definition an abuse of the system. The current OSHA position is very heavy-handed and designed to force compliance without permitting discussion.

No ethical incentive provider would create a program to discourage reporting—tracking safety issues is an integral part of making a workplace safer! In fact, most programs I implement include performance-based bonus points for promptly and properly reporting an injury or accident, and many actually impose severe penalties for not filing a required report. Even though we are in the "Carrot," not the "Stick," business, we justify this penalty to our program participants as not being a negative because it is part of the employee's standard operating procedures to properly report any accident or injury, so the penalty will never apply unless someone is violating the company policy, which happens to completely affirm OSHA's desire that all such events be properly recorded and/or reported.

My good friend Brian Galonek, CPIM, president of Massachusetts-based All Star Incentive Marketing and board member of the Incentive Federation, has a really great position on this. He says, "Poorly designed programs can produce poor results, but OSHA has not spent enough time considering what a properly designed program should look like. Stating that they like leading indicators is fine, but they fall way short of advising on what a proper program is. For that they should turn to us and to our customers that use well-designed programs to create a broader understanding. OSHA should encourage the use of properly designed programs, so that innovation can produce the best possible results (financial and safety wise) for companies and workers. When it comes to hard hats as a parallel example—OSHA should (and I'm sure does) state what standards should be met, but then leave it to the companies that make hard hats to meet or exceed those standards while creating innovative new products."

OH&S: You mentioned long-term changes in the safety incentive world that occurred this year. What is the best example of that?
Roark: A long-term development is the International Standards Organization forming a Technical Advisory Group to establish a measurement definition for worldwide Human Capital Standards. I can assure you that many of your colleagues are following ISO and this issue closely, as it portends to bring a paradigm shift in international business, and by inference, certainly every company in the industrialized world that is conscious of a fundamental need to promote safety.

The managers of ISO 9000, followed by 1.35 million companies worldwide and 25,000 in the U.S., have recognized engagement as critical to quality management and have already issued Standard 10018, outlining best practices for engaging the organization to focus on quality every day. ISO has now created a working group to create formal engagement standards applying to all businesses. There is now an unprecedented amount of research showing that rewards and recognition, when used correctly as a part of a comprehensive engagement process, are critical to success, so much so that ISO has included rewards and recognition in its engagement framework.

IMA has been accepted as a member of the Technical Advisory Group developing the recommended criteria for this new ISO standard. Working with other aligned organizations, such as the Enterprise Engagement Alliance and Incentive Research Foundation, as well as individual enlightened companies, we will provide incentive perspectives, statistics, and experiences for consideration by the formulating advisors. In doing this, we will advocate for standards that include employee appreciation, recognition, and motivation as integral modalities. I believe that in coming years, these standards will be a basic requirement for conducting commerce, and that the inclusion of standards and guidelines for safety incentive programs will elevate the specialty and create a paradigm shift in how the C-suite and our employees view and implement safety best practices.

Sean Roark is immediate past president of the Incentive Marketing Association, treasurer of the Incentive Federation, and chairman of the ASSE Downtown Houston chapter. He was the first person named as a Fellow of the IMA and also was in the initial class of inductees as a Fellow of the Promotional Products Association International, making him the only person to hold both honors.

This article originally appeared in the September 2017 issue of Occupational Health & Safety.