Safety Incentives: Myths and Realities

The question we should be asking is: How can we capitalize on the motivational factors of incentives to more effectively market safety programs to employees?

• By Dennis R. Downing, Dr. J. Renae Norton
• Jan 01, 2004

DO safety incentive programs work? This is a multimillion-dollar question when you consider the costs that unsafe practices can have for your organization. The simple answer is, it depends primarily on the focus of your safety program and secondarily on how well you implement your incentive program.

Focus: Reactive or Proactive
Given that 96 percent of all workplace accidents are triggered by unsafe behavior, it is no wonder the focus often has been on reducing the number of accidents by eliminating unsafe behaviors instead of on preventing accidents by rewarding instances of safe behavior.

The problem with focusing on reducing accident rates by eliminating unsafe behaviors is it is reactive rather than proactive, e.g. once the problem is resolved and the accident rate goes back down, management tends to divert its focus and direct its resources toward other organizational issues. If the accident rate rises again--and it almost always does when the approach is reactive--management once again turns its attention to eliminating unsafe behaviors. Under these circumstances, the cycle will repeat again and again.

Conversely, when "safety behavior" is the focus of the incentive program, a collaborative, problem-solving approach involving both management and employees is adopted to identify critical sets of safe and unsafe behaviors. This allows for the creation of incentives for the specific behaviors or sets of behaviors that prevent accidents from occurring in the first place. It significantly reduces the incidences of behaviors that lead to accidents. It also creates a culture of safety.

There is considerable debate over whether or not safety incentives work. This is the wrong question. It is obvious that incentives do work. We all participate in incentive programs every day, some of which are more obvious than others. For example:

• Frequent flyer miles
• Coupons
• Discounts/sales prices
• Traffic fines
• Wages/salaries
• Overtime pay
• Production and sales bonuses

When Are Incentives Most Effective?
The question is not whether incentives work; of course they do. The question is when are they most effective at preventing unsafe behavior? But to answer that question, we must first ask why incentives work at all. Behavioral scientists tell us several important things about behavior change:

• Behavior that is reinforced (incentivized) will occur more frequently than behavior that is not reinforced. According to researchers, for every 330 unsafe acts, only one will result in a lost time incident (although 29 minor injuries also will occur). What actually gets reinforced, and is therefore more likely to occur, is the shortcut the person who is behaving unsafely took to save time. The only thing that will counter this effectively is to reinforce the safe behavior that would prevent the unsafe behavior from occurring.
• Punishment (reprimands, fines, dismissals) are ineffective ways of preventing unsafe behavior. What they do instead is reinforce non-reporting, which increases the likelihood the behavior will occur again--and along with it, the increased risk of injury or accident.
• It is easier to change behavior than it is to change people's attitudes because attitudes involve three elements (thinking, feeling, and intention to act) and behaviors involve only one element (the behavior). However, when safe behavior is rewarded and increases as a result, the attitude is more likely than not to change, as well. What this also means is that selling safety is much less effective than creating a culture where it is the norm to be safe.

Onward and Upward, or . . . ?
Safety is like a journey on an endless escalator. If you don't keep moving onward and upward, you'll be going backward as well as down and out. The question is, are you and your company on that journey and, more importantly, are your employees moving with you, or are you just dragging them along for the ride?

When attempting to motivate people to change, there is a factor called the "10-80-10 rule":

• 10 percent of the people will do it just because it is the right thing to do.
• 80 percent of the people will do it but require some motivating factor.
• 10 percent of the people won't do it no matter what.

The target of any incentive program should be the 80 percent. If you can successfully motivate this group, you will have 90 percent of your company involved in achieving your safety goals. Incentive programs should be designed to provide that level of motivation. The question we should be asking is: How can we capitalize on the motivational factors of incentives to more effectively market safety programs to employees?

Myths & Mistakes
Myth: Rewarding employees for something they should do anyway is a bad idea, isn't it?

This is a valid question. However, given what we know about human nature, "should do" does not necessarily equate to "will do." Are you willing to stake the safety of your employees (and, as a safety professional, possibly your career) on whether people will do what they should do?

Myth: Success is determined by the amount of money you spend.

The most critical factor is the manner in which the safety incentive program is designed and conducted. Most companies start by budgeting a certain amount for safety incentives, without a specific plan in mind. This is like giving your spouse $50 and saying, "We need groceries and this is all we have to spend." If your spouse doesn't know what you have and what you don't have, he or she will spend the money on what seems logical and right, rather than on the things that are most needed.

Likewise, the safety officer is often tasked with the responsibility of figuring out how to use the money that was budgeted most effectively--with very little thought as to what behaviors actually lead to accidents.

Myth: Success depends upon the effectiveness of the incentives.

Wrong! It is critical to remember that you must have a well-designed safety program before you can have a successful safety incentive program. The best incentive program cannot make a bad safety program better!

Myth: Rewarding employees for each month they work without a lost time accident, or giving every employee a bonus if the company/department goes an entire year with no recordable accidents, is a good practice.

Passive programs are those that reward employees based on whether or not they had an accident over a period of time. The only real advantage to conducting passive programs is that they are easy to administer, requiring little or no planning or preparation. You don't even need to have your goals defined. Indirectly, nearly all the burden for safety is placed on the employees. The disadvantages are that such programs do not address any specific safety issues; they do not, in themselves, change the company's safety culture; nor do they produce long-term benefits. The most critical disadvantage, however, is that they encourage the practice of not reporting accidents.

Proactive programs, on the other hand, reward employees based on activities, achievements, and/or behavioral changes that result in increased safety awareness, identification and/or elimination of risk factors, and resolution of specific safety issues. The advantages of proactive programs are that they encourage maximum employee involvement, have the potential to produce long-term safety culture and behavioral changes, and do not encourage non-reporting of accidents.

When conducted properly, they can be integrated into a safety program in a way that fosters a team atmosphere involving everyone from the top levels of management down. The main disadvantage is that proactive programs require the high degree of commitment and planning mentioned earlier.

We have found proactive, points-based incentive programs to be the most cost-effective way to achieve safety goals. These are programs where participants earn points for various activities and achievements and accumulate them in an account to be redeemed at a later date for reward items of their choice. In addition, with points-based programs you can incorporate several incentive programs (safety, attendance, production, quality, cost reduction, etc.) into one rewards system. This in itself can reduce your budget substantially because the different programs complement one another rather than competing with one another.

Points-based programs provide a high degree of flexibility, allowing employees to be rewarded for even small contributions. Each employee selects the specific rewards that will motivate him, that he believes he can achieve.

Myth: Incentive programs are easy to administer.

Along with the many advantages comes the disadvantage that points-based systems require a fairly extensive recordkeeping and redemption system. The good news is that many of the full-service incentive companies provide their clients with incentive tracking and points redemption systems that are designed to reduce this recordkeeping burden.

Taking the Next Steps
1. The first step is to determine where you would like your company to be regarding safety, both in the short term and in the long term. Prepare a Safety Mission Statement. It is important to do this without considering your current safety status (it may seem like Mission Impossible).
2. Define what it will be worth to you, your company, and your employees when you achieve your safety goals, both monetarily and for the good of everyone involved. This step is frequently left out, making your safety and incentive programs very difficult to sell to the people who control the budget. They need to be able to see what their return on investment will be.
3. Next, do a critical and honest evaluation of the current status of safety within your company. If there are problem areas, acknowledge them. Don't worry about how the problems came about or who was responsible for creating them, only that they are there and need to be addressed for your safety program to move forward.
4. Once you know where you currently are and where you want to go, then you can start to put together plans to move in that direction. Make a list of specific areas that need to be addressed and set short- and long-term goals in each of those areas. Determine what will be required and who will need to be involved to achieve those goals. Now, determine where to apply the incentives that will motivate employees to become involved in achieving each of your specific safety goals.
5. The next challenge is to determine how much to budget for your safety incentive programs. You will need to make this determination yourself based on what you have done in the past, what you expect to achieve, and how many employees need to be involved.

Secrets to Success
We have found the best incentive programs are designed to reward everyone who participates and achieves the desired results. If you are stuck with a small budget, you may need to resort to more competitive programs. One way to get the most out of your incentive budget is to allow employees to carry over points from year to year. We frequently see employees who will set goals for a reward that will take them more than three years of total involvement to achieve.

In order to be effective, incentives must have perceived value to the recipient, something worth working for. The most motivational rewards are items that the recipient cannot, because of cost or other factors, simply go out and purchase. Here are some guidelines for budgeting:

• The industry standard is 1-2 percent of an employee's salary.
• From our experience, about $10 to $20 per month is a good starting point; you can adjust from there when you start reaping the benefits of your program.
• Don't forget to budget some for overhead costs (taxes, recordkeeping, promotional materials, etc.).
• Avoid incentive programs that are more luck than effort (drawings, bingo, poker, etc.). Although they provide a fun factor, they also may convey the message that safety is more luck than effort, and we all know that is not true.

As for what to use for rewards, the important thing is not to forget that, to be motivational, an incentive must have perceived value to the recipient. If asked, employees frequently will say they want cash incentives; however, research has proven that it takes $7 in cash rewards to equal the motivational value of $1 in non-cash rewards. Nearly all cash rewards are used to purchase things that are used up within a matter of days, and the recipient has little or no recollection of what the money was used for. Cash has no trophy value.

The most motivational rewards are ones that the recipient can pick out ahead of time and set as her own personal goal. It needs to be something she can see or visualize, something she would not normally purchase for herself or her family. Once she has it, she has something she can be proud of (trophy value).

Don't forget the most important and least expensive reward of all: recognition. Whether we admit it or not, all of us like to receive recognition for our accomplishments. You can triple the value of a reward item by presenting it to the recipient in front of a group of his peers. It not only motivates the person receiving the award; it also motivates others to want the same recognition.

A Final Note
The secret to the success of a safety incentive program will be how well you promote it.

This article originally appeared in the January 2004 issue of Occupational Health & Safety.