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Reprint from Occupational Health
& Safety Magazine–
The Magic
of Incentives
by Jerry Laws
Management at Boise Cascade’s White Paper Division
in Wallula, Wash. installed Peavey Performance Systems’ Safety Jackpot
program last year with a lofty goal: exceed the best safety record
in the history of the paper mill, which racks up 1.5 million man
hours annually and began operating in 1959.
Achieving the goal required the mill’s 540 employees to better their
1994 safety performance by 33%. As the year wound down, they
were on track for a 50% improvement—spurred by a program
that cost the company $25,000.
“I believe we’ll make it with flying colors,” said Dallas L. Russell,
the mill’s maintenance manager. “And if we do that, it’ll be the
best year we’ve ever had by far.”
Russell said management at the mill drives home its commitment to
safety by using an unusually stringent yardstick. Rather than measure
by counting lost-time injuries, as many workplaces do, the mill
tracks its workers’ safety by counting “incidents,” which its mangers
have defined as any injury where even a single stitch is required
to close the wound.
Safety incentives are a hotly competitive and growing segment of
the highly profitable corporate incentive industry. Spiegel Rewards
has been offering incentives for nine years, for example, but the
company got into safety incentives only two years ago, said business
development manger Rich Burke. “We got wind of the big dollars
being thrown around in safety, and we wanted to get a piece of that,”
he said. “We do about $20 million a year. We’re probably the
second—or third—largest retailer in the business.”
The whole idea of awarding prizes or cash for workplace safety rubs
some people the wrong way. After all, staying alive and healthy
should be its own reward, critics say. The incentive companies and
outside observers say that outlook misses the point.
“Unfortunately, human nature being what it is, we all like to be
given some kind of carrot. We all like to be recognized in some
shape or form,” said Cary Kuykendell, director of incentive and
commercial sales at Service Merchandise Co. in Nashville, Tenn.
“It’s the fact that if we’re careful, I’m going to get something
for nothing. And that I didn’t get hurt,” said James Parnell, a
construction management professor at Colorado State University in
Fort Collins, Co.
Choose Appropriate Rewards
An espresso machine, watches, binoculars and a short-wave radio
are some of the top prizes available at the Boise Cascade mill where
Russell works. The only safety incentive offered by the small city
of Port Lavaca, Texas, is money, which proved to be an ideal and
immediate motivator.
Port Lavaca has 100 employees, yet it paid $290, 125 on 43 claims
filed by its workers in the year that ended Sept. 30, 1990, city
manager C.J. Webster said. “We went through the process of
putting in safety programs, safety manuals and doing training, and
all those sorts of things. We made a little impact, but not much,”
he said. “We took another step and put in an incentive program,
a financial incentive program. Our number one goal was reducing
lost-time accidents.”
Webster recalled that when he joined the city staff in 1990, “we
had several employees then who were off on workers’ comp and never
came back. We were like in a constant battle with these employees.
Which could never be positive.”
The city paid $230,000 for workers’ comp coverage that year. In
1995, the third year of its financial incentive program, the city’s
premium was down to $82,000, Webster said. The money saved is the
equivalent of 7¢ of the municipal tax rate, making it politically
popular in the city of 12,000 residents.
Port Lavaca bases its incentives on a full year’s behavior. Employees
must attend safety meetings and submit reports that identify potential
hazards. Obeying a cardinal rule of the incentive industry, the
city’s reward setup is easy to understand: An employee who had no
lost-time accidents in the fiscal year earns a 5¢ bonus for
every hour he worked. He gets 10¢ more if his entire department
had no accidents and another 5¢ if all departments qualified.
Safe employees received a bonus check of $450 to $550 two weeks
before Christmas in each of the first two years, with the money
coming directly from the city’s reserve fund for paying injury claims.
Many of the city’s employees are paid $7 or $8 an hour, Webster
said.
With the reward system in place, accidents dropped by more than
half virtually overnight. “We’ve just made a huge, huge impact,
a huge shift, and so both the citizens—with the impact it
has on our tax rate—and the employees have benefited,”
Webster said. “What really helped us was that those employees
that did get injured, they were very conscious that they would let
down the other employees if they didn’t get back to work.”
Traps to Avoid
Port Lavaca’s experience in 1995 illustrates two of the pitfalls
some programs encounter. One serious injury and a handful of claims
in the $7,000 to $9,000 range wiped out everyone’s year-end bonus,
because there was no money available. “That was disheartening to
the organization,” Webster acknowledged.
The injury occurred when a wheel that stirs the effluent mix at
a sewage plant rolled onto the arm of a woman who was distracted
while spraying down the plant, he said. The employee pulled her
arm free and later had to have skin grafts on the arm; she even
eventually returned to work but had to be off the job again for
physical therapy. The city’s incentive setup dictates that all employees
can lose their reward because of one person’s mistake, and also
that months of accident-free behavior might go unrewarded because
a serious injury occurs near the end of the year.
Still, Webster said he has never seen anyone try to hide an injury.
“I worried about that a little bit, but I never saw an incident,”
he said. “If you’re really hurting, everybody’s going to see it
anyway. And there’s nothing to prevent you from going down and getting
treated; we just want to get you back to work.”
One of the biggest hurdles in any incentive program is getting the
attention of the individuals involved and getting them to participate,
said Robert Ruth, a Colorado State University construction management
student who has worked as a foreman in a Colorado military contractor’s
plant. “A good program gets workers to take the time to observe
small and large possible safety problems and report them,” he said.
“As someone once said, motivation is no big deal, you can motivate
a baboon. But if you don’t back that motivation with tools, skills,
training, counseling and leadership, then all you have is a highly
frustrated, motivated ape that cannot get the job done.”
Even meager incentives can change workers’ attitudes. Parnell, the
construction management professor, watched summer workers in Fort
Collins, Co., suddenly start driving safety when the city began
offering the incentive of small coolers for carrying lunch or water.
He said he rode in one morning with a crew of cement finishers at
Denver’s Stapleton Airport and listened as one earnestly reminded
his co-workers that they were just two days away from winning a
monthly bonus.
“It was absolutely a piddly little bonus. It was the equivalent
of a couple of six packs of beer, in dollar terms,” yet it
produced big cost savings for the employer, Parnell said.
Besides failing to follow up, two other common mistakes have been
taught by experience:
Not knowing where you stand. Don’t jump into the incentive
game unless you can accurately measure both your current safety
situation and your operations’ progress, advises Service Merchandise’s
Kuykendall. “Any program, large or small, you have to have
some very good quantitative and qualitative measurement program,”
he said. “I’ve seen a lot of frustrations with a lot of customers
who don’t have a good measuring system in place — to measure
results and be able to report accurately to participants.”
Being buried under paperwork. Russell, the Boise Cascade
maintenance manager, loves the fact that Peavey’s Safety Jackpot
lets participants keep track of their own points, and he winces
at the memory of past incentive programs that required someone on
his staff to keep a separate points log for every worker in the
mill.
“Don’t get a program in your plant, or office, or whatever,
that requires a lot of bookkeeping because it loses its emphasis.
People get sick and tired of keeping track of those points,”
Russell said.
Jerry Laws is editor of Occupational Health & Safety.
………………………………………………………………………
How to Get Management and Employees On
Board
Bulova Corp. of Woodside, N.Y., offers step-by-step guides to setting
up a successful safety incentive program. These are the company’s
checklists for enlisting management’s full support and communicating
goals clearly to participants in the program:
Get the full support and involvement of management by proving
the cost benefits. Safety programs cost money. In order to make
the investment worthwhile, you must prove to management that the
dollars saved will far outweigh the dollars spent.
Begin by establishing just how much accidents are costing your company
each year.
The total cost picture must take this into account:
| • |
Workmen’s compensation claims and
premiums |
| • |
Legal suits |
| • |
Equipment downtime |
| • |
Equipment damage, replacement
and/or repair |
| • |
Medical insurance |
| • |
Training new employees |
| • |
Slowdowns by new workers |
| • |
Cost of temporary help |
| • |
Loss of employee productivity |
| • |
Employee downtime |
| • |
Absenteeism due to injury |
| • |
Administrative paperwork and processing |
| • |
Damaged or improperly made products/services |
If you cannot calculate out these costs, consider
agencies and organizations that may have specific accident figures
in your industry: your insurance agency, the American Insurance
Association, the National Safety Management Society or your own
industry trade association.
Communicate your objective clearly and promote your program heavily.
To communicate your goals, you have to set up rules that are simple.
In a safety program, your objectives are easy to state — no
on-the-job accidents or injuries. But making that into a program
takes a little effort on your part.
• First, ask yourself what educational opportunities
the program represents. Do your workers need more safety training?
Do they understand how and why to use safety equipment, etc.?
Perhaps you need to conduct some safety training sessions. If so,
attendance at these sessions could count toward earning their awards.
• Next, you should have some printed material that lists
the safety measures you expect your workers to take. Once your materials
are in place, you can just announce the program start and sit back
and wait for results.
• This is the part that most people ignore or fall short
on: Promote. Promote. Promote! Begin with a bang. Announce the program
at a special workers meeting. Explain the objectives, the rules
and the point system clearly. Make management’s support highly visible.
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