Lessons Learned: Launching a Safety Incentive Program

Lessons Learned: Launching a Safety Incentive Program

Several issues can arise when working to launch a safety incentive program. Here’s how you can sidestep the problems to ensure an effective program.

For at least a century, safety incentive programs have often been misunderstood and misused. Many have delivered positive results, but some have produced unintended consequences.

Quite often, companies design their programs in reverse. They begin with the fun part—the “What will we give them?” question. Will it be gift cards, T-shirts, pizza parties or cash?

A more effective approach is to start with the “why” question, then the “how” question and finish up with the “what” question.

  • Why are you offering these awards? What are the critical behaviors?
  • How are you going to deliver your recognition program?
  • How are you going to communicate to employees the launch of a program and the reasons for it?
  • How are you going to ensure that it is equitable, that everyone receives positive consequences for achieving desired behavior change?
  • What type of incentive rewards are you going to offer?

From my thirty-year vantage point, the following are a few lessons I have learned.

Problem: Lack of Positive Reinforcement Leadership Skills

Another question that should be considered: “How will we present the award?” Without training in positive reinforcement skills, even the best gifts can fall flat on their face, doing more harm to the employee/leader relationship than good.

Three examples of this are:

  • Some years ago, a company hit a designated safety milestone, triggering an incentive reward. One of the company supervisors was instructed to present the gift to workers and thank them for their achievement. Instead, he told one employee, “Here’s your toaster, now get back to work.” He damaged not only the perception of that employee, but also the other 800 people who heard the story by that afternoon.
  • A large railroad firm reached a targeted safety goal and sent leather jackets to employees by mail. One of those employees complained, “If my boss doesn’t care enough about me to present this gift to me in person, it isn’t worth much to me.” He promptly tossed his $200 jacket in the trash.
  • “I’ll never ever hand out another safety incentive for the rest of my life,” said the corporate safety director for a large railroad company. Why? Well, when the company hit their milestone, One employee won an expensive television and he was eternally grateful, but the other 699 employees got nothing from the exchange.

These scenarios play out again and again. A company sets a safety goal, achieves it, holds a drawing or raffle and selects a winner. When one person wins, everyone else loses. It’s true that prize drawing incentive programs are inexpensive (since only one person wins), but what we know from behavioral science is that the most powerful consequences are positive, immediate, and certain.

The most successful recognition strategies tick all the boxes from behavioral science. The reward is positive (as perceived by the employee), immediate (occurs within ten seconds or less of the behavior) and certain (every time I repeat the behavior, I am certain something good will happen).

Solution: Conduct the WIIFM test

When an incentive program singles out one winner and punishes the rest of the workforce, it is doomed to fail. It fails the all-important WIIFM test: What’s in it for me? When the answer is nothing, when the incentive goes to only one employee, the effort to promote commitment to safety backfires. The unintended consequence: the workforce is less engaged in safety, attitude and morale sag, behaviors don’t change and apathy and resistance to safety efforts increase.

Problem: Tax implications & Gift Card Woes

Another common mistake is failing to understand the tax implications of the incentive award, which can doom an incentive program to an untimely death and also damage morale. For example, one company decided to give away an expensive Harley-Davidson motorcycle as the incentive for reaching a safety milestone. A raffle for the motorcycle would be held if employees worked six months without an injury. The goal was reached, the raffle was held and one employee rode away on his new Harley. When the payroll department got wind of the award, they said, “Wait a minute, who’s paying the income tax on that $15,000 Harley?” The company docked the winning employee for the tax. Furious upon learning that he suddenly owed the government several thousand dollars, he filed a grievance with his union. Ultimately, the company paid the tax for him, which cost them $11,000 additional dollars for the “payroll gross up.”

Another company gave away one million dollars in Visa gift cards, only to learn that their income tax hit would be $992,000 through a payroll “gross up.” Even worse, later they found research from Kiplinger which states that 30 percent of gift cards are never redeemed by the employee.

Solution: Do Your homework

Do thorough research and consider getting outside help to navigate around the potholes of unexpected tax implications and lack of gift card utilization.

Problem: Lagging Indicator Incentives

In the 1980s, the most common approaches by far were lagging indicator-based safety incentive programs. Simply put, the company rewards employees for going a period of time without any reports of injuries.

During the years Dr. David Michaels headed OSHA (2001 – 2009), the agency went public with its position that lagging indicator incentive programs were often counter-productive. The agency argued that more likely than not, injuries were not reduced—they were hidden. In my experience, the only real behavior change that occurs with safety incentive programs based on lagging indicators is what gets reported. Sure, your injury numbers will probably go down, but after the program ends, injuries will resurface and your case rate will spike back up.

Solution: Select the Right Leading Indicators

Most forward-thinking companies have transitioned away from lagging indicator incentives. They are using leading indicators to promote positive behavior change. Sadly, though, many end up rewarding the wrong thing.

Successfully completing a safety crossword puzzle is not a behavioral consequence that will reduce injuries. Just showing up for safety training class isn’t enough either. What knowledge gain can we measure? Did we engage in meaningful two-way conversation?

Be careful in choosing the behaviors you want to reinforce and reward. Perhaps you want employees to report more near-hit incidents—a viable goal. However, be careful not to focus only on employee behaviors and letting supervisors and senior leaders off the hook. You want to positively reinforce their safe behaviors, too, but leader behaviors are different. Leadership behavior matters more than worker behavior—it has a more widespread impact. You need positive behaviors top to bottom in an organization to create sustainable safety values, beliefs, norms and a positive safety culture.

Trapped by Old School Lagging Incentives

Many safety pros inherit safety incentive programs based on lagging indicators. They fear changing to leading indicators will result in an uptick in injury cases. This fear is unfounded. In more than 30 years and over 1,000 transitions from lagging to leading metrics, I have never seen employee injuries increase after removing a lagging indicator incentive system. I have, however, seen injury reporting increase, which is a good thing. If you get it reported, you can fix it. If it stays hidden, the alligator is just waiting in the swamp to find his next victim.

Often companies need outside help, a fresh pair of eyes from a third party, to identify what critical behaviors should be targeted for positive reinforcement. The view from inside the culture bubble is important, but equally important is the view from the outside looking in. To sum up these lessons learned, the most important part of planning for a successful safety recognition program is to address the why, the what and the how questions.

And remember, the WIIFM issue relates not only to employees, but organization leadership as well. Leaders reinforce critical positive behaviors for two reasons. First, they truly care about sending every employee home healthy and without harm every day. Second, safety is good for business. Many companies say for every dollar invested in an effective safety recognition program, the return on that investment is three or four times the initial outlay. Injuries and related costs are reduced, and productivity and quality increase, along with profits.

Think about these lessons learned before you launch your next safety incentive program. There’s no need for history to repeat itself. Spare yourself the problems and achieve the results you want.

To learn more visit www.beyondzeroinjuries.com.

This article originally appeared in the April 1, 2021 issue of Occupational Health & Safety.

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