Set SMART goals for incentive programs

As a consultant who frequently helps companies incorporate safety into their performance management systems, I have long been an advocate of clear performance goals. Clear performance goals, whether focused on safety, productivity, or any performance metrics, give employees a direct look into management priorities and objectives and allow them to track progress in their own performance. When employees reach for and achieve performance goals, they feel more satisfied and are more likely to persist when faced with tough workplace situations.

However, performance goals must be designed properly or they can do more harm than good. Goals should be challenging enough to require real behavioral change but not so difficult that workers give up and don’t bother to try. For any kind of performance management system, the metrics and thresholds selected for performance goals must be SMART — specific, measurable, attainable, relevant and timely.

Specific
Employees need to know specifically what metric(s) they will be measured by and what the thresholds are for achieving the incentive. For example, the foundation of a safety incentive program cannot be based on vague metrics such as “number of injuries” without specifying whether this includes only OSHA recordable injuries, trips to first aid, or other categories.

Balancing the number of metrics is critical to an effective safety program. Having too many can have a negative impact on productivity levels because employees may be unable to concentrate on each one and still do their jobs. On the other hand, when incentive metrics are defined too narrowly, they can cause inattention blindness to other important behaviors. Employees can become so focused on not violating a particular safety rule that they forget about general good practices like housekeeping, equipment maintenance or general vigilance for unexpected events and hazards.

One of the challenges of being specific is to make sure employees see their own obligations as equal and fair compared to their coworkers. This becomes an issue when some jobs have more hazards or safety requirements than others. Often the best way to resolve this is to invite employees to participate directly in the goal-setting process.

Measurable
The threshold for achieving an incentive has to be objectively measured. Telling your delivery drivers to “drive safely” is not helpful if it is impossible for you to know how they are driving. They need to know what constitutes “safe driving.” Is it a particular speed limit, or is it following a comprehensive set of defensive driving guidelines covered in a certification course? Without specifics, your employees are likely to ignore the incentive program because they don’t know what is expected.

When goals are not measurable, it is possible for supervisors to apply thresholds subjectively, thus opening themselves to accusations of playing favorites by conveniently “not noticing” violations of preferred employees. Perceived fairness and objectivity are key components of performance management systems, especially when dealing with safety and other less quantitative domains.

Attainable
The threshold for achieving an incentive must be realistic. If the current OSHA recordable incidence rate for a team of employees is 20 per year, setting the incentive at zero or one will not be effective because employees will assume that they can never attain this level and so will have little motivation to try.

Unattainable thresholds encourage two types of unethical behavior. First, employees are motivated to hide violations to avoid losing out on an incentive. Hidden violations may seem innocuous because you don’t have to pay for unreported injuries. But small injuries have a habit of growing into serious injuries later, with greater medical costs. Second, when employees find themselves in a situation where a small violation may be the safest way out of an unforeseen situation, they may use a more risky approach to avoid losing out on the incentive.

But you don’t want an incentive to be too easy to attain either. The purpose of safety incentive programs is to motivate employees to improve their performance. If the goal is set too low, you will get levels of performance employees could have delivered even without the program.

Relevant
The metrics used as the basis for safety incentive programs must measure behaviors that really affect safety, or employees will see through them. Employees’ performance improvements are greatest when they recognize the importance of the goals and become committed to attaining them. This can lead employees to pursue the safety metrics for intrinsic reasons, even if they do not earn tangible incentives.

The opposite is also true. When employees pursue goals they view as irrelevant, their performance is directed exclusively toward earning the reward. This creates a transactional frame of behavior and decreases employees’ intrinsic motivation or loyalty to management objectives. When the incentive is removed, so is the increased effort.

Timely
Thresholds must be set using meaningful time frames. At the start of the year, an annual incentive may be so far off that workers may not be motivated to increase their effort. Using annual injury rates may not affect the behavior of seasonal workers because they won’t be around to earn them. Similarly, if incentives use too short a time frame, employees may ignore long term safety issues because they are unlikely to cause a problem until after the incentive has been earned.

Some concerns about safety culture
Even with SMART incentives, there are other challenges that can reduce the effectiveness of safety programs. In general, when management commits time, attention, and resources into safety, it improves the safety climate. Developing a comprehensive safety incentive program is a good way to demonstrate commitment, which can have positive implications on behavior. But some negative consequences of safety incentive programs include the following:

• The emphasis on specific safety behaviors can focus employees’ attention too much on quantitative performance and away from the intrinsic motivation to work hard and achieve a job well done.
• Quantitative performance goals have in some cases been shown to decrease job satisfaction, hurt interpersonal relations among workers, and increase employees’ levels of occupational stress.
• When incentives are set competitively, they can create a culture of unhealthy competition where employees are less likely to assist each other if it could take away from attaining incentives.

These cultural issues are not guaranteed consequences for any safety incentive program, but must be kept in mind to avoid damaging your overall workplace safety culture.

All of this is not meant to scare you away from safety incentive programs. You need to develop the metrics, thresholds and other components of a solid program with these challenges in mind. And never be afraid to ask for help when you get stuck.