Incentives are no panacea

October 1, 2010
KEYWORDS incentives
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In today’s economy it is more important than ever to determine the potential return on investment (ROI) of any safety incentive program your company might be considering. While the standard ROI formula is simple enough:

ROI = Gain from Investment – Cost of Investment / Cost of Investment,

the ROI of a safety incentive program can be difficult to measure because the results will vary depending on what factors are included as gains and costs. The formula merely attempts to measure the monetary benefit of a program and is only as good as the input used. Because ROI measurements are flexible and easily manipulated to meet the demands of the user, the inputs need to be thoroughly understood by all before such a measurement tool can be effective.

Make a long-term commitment

Before offering tangible prizes you must first determine if your budget will enable you to sustain an incentive program over the long haul.

Once you’ve made a long-term commitment, begin by conducting a safety culture survey with a large sampling of the employee population. The employee population includes everyone - management, supervision and primary employees. These surveys are best done anonymously and should be tabulated by an outside resource to ensure objectivity. Building trust is critical in any safety process.

Allowing employees to pinpoint safe practices is smart management because it fosters employee involvement and a feeling of ownership. This in itself is a safety incentive. Questions designed to determine employees’ likes and dislikes as well as their sense of program satisfaction need to be an integral part of an initial cultural measurement. Subsequent surveys designed to measure change in culture will require the same type of queries.

Create measurable objectives

Only when a facility has a good grasp on the existing safety culture and environment can a change such as introducing an incentive program be considered. Once this has been determined, specific objectives need to be identified that the incentive program can support. These objectives should be those that offer the greatest opportunity for improved performance.

Rewarding safety results such as low recordables, lost-time accidents, etc., while nice, is based on bad things not happening. These statistics do not indicate how you achieved the desired result. On the other hand, rewarding improvement in practices such as reporting near misses, occurrences of pinpointed safe behaviors and improvements/solutions in the safety environment and practices are just a few of the behaviors that should be recognized and rewarded. Measurable objectives and criteria are important - what can be measured usually gets done.

Know when to use tangible and intangible incentives

Tangible incentives cannot be considered a panacea for a broken safety process. All parts of the safety process must be solid before adding incentives to ensure that you will be able to measure the success of the incentives. While tangible incentives are fun and appreciated, they need to be controlled and applied carefully to measurable goals.

Tangible incentives should not be used exclusively but should be coupled with intangible incentives such as employee recognition and sincere appreciation. People will exert higher discretionary effort on the job when personally recognized. Recognition is invaluable and takes little time and effort.

Measure your success

Basic concepts (not all inclusive) to remember when considering a safety incentive program and measurement are:

Money available for the long-term? Make sure there is a sustainable budget when considering tangible rewards.

Evaluate the safety culture as it exists before introducing an incentive program.

Assign pinpointed goals with specific, measurable leading indicators.

Seek employee input. Know the dislikes and likes of those rewarded, and make sure your safety goals are aligned.

Utilize intangibles to reinforce as well. The best reward is “Thank you.”

Return-on-investment data should be easily understood and communicated to all.

Evaluate the culture again and again in order to track continuous improvement.

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