Reprint from Safety & Health Management Magazine
How to Run a Successful Safety-Incentive Program
By Doug Toft
Any manager who decides to start a safety-incentive program faces a bewildering array of options. The goal seems clear enough: to promote safety on the job. Yet, while one company offers steak dinners as an incentive to employees who complete a quarter with no lost-time injuries, another offers gift certificates to a discount store and a third offers straight cash awards.
The question remains: What incentives will work for your company?
This question is a powerful one, but may not be most important one. People who are new to incentive programs often focus on what kinds of incentives to offer. Though this question is key, it's even more critical to ask the "how questions":
1. How do we set goals for our incentive program?
2. How can we get the most "bang" for our incentives buck?
3. How can we sustain the incentive program?
Such questions reveal the processes that drive successful incentive programs. Though these programs differ widely in particulars, their underlying dynamics are surprisingly consistent.
Everything from Bananas to Boats
Think about the term "incentive." It includes almost any item that human beings value. In his book, "1001 Ways to Reward Employees," Bob Nelson illustrates this point with a story about the Hewlett-Packard Co.
An engineer at the company solved a problem that had plagued his team for weeks. Burning with enthusiasm, he burst into his manager's office and blurted out the solution. Thrilled by this idea, the manager offered the only reward he could find at the moment- a banana left over from his lunch. The incident started a trend, and the Golden Banana.
Award is now a coveted employee prize.
Though cash awards are an obvious choice for incentives, safety managers often use gifts as well: pens, key chains, personal stereos, compact disc players, televisions, fishing boats, recreational vehicles and more. The price tag for some incentives runs into five figures. Others, such as a pat on the back and a compliment, cost nothing.
Management consultant Michael LeBoeuf lists 10 basic categories of employee incentives. Besides money, these include:
• Time off
• Stock ownership
• Special assignments
• Increased autonomy
• Training and education
• Parties and other fun activities
By asking the three "how questions," safety managers can narrow down this list and choose incentives that change employee behavior.
How Do We Set Goals for Our Incentive Program?
An obvious purpose of incentive programs is to raise safety performance and awareness. Given that overall goal, employees can receive incentives based on many different criteria: days without recordable incidents, reporting near-miss incidents, months without lost-time injuries, making safety suggestions, decreases in workers-compensation claims and more. A successful program could get any of these results, each with a different impact on a company's bottom line.
As you develop your program's goals, keep in mind the basic choice between change and maintenance. Some companies want to cut losses due to injuries and illnesses, while others aim to maintain safety records that are already excellent.
Heartland Food Co., a Minnesota firm that processes turkeys, aimed for a big change. "We had a high number of injuries, people on workers compensation and employees who were out on a long-term basis," says Marie Huber, safety, health and training director. "Since we started the safety-incentive program, our injuries and incidents have been drastically reduced." In fact, Heartland went from 108 lost-time injuries in 1994 to 14 in 1995. The program has more than paid for itself.
Other companies slant their safety goals toward maintenance. This is true for W. R. Grace, a specialty chemical manufacturer in Atlanta. Vic Anapolle, plant manager, says that incentives help to sustain a record that is already impressive: "We went 11 years without a lost-time incident-1.25 million employee hours. Our recordables are typically one or two a year for a population of about 70 people. We would hope that incentive programs would drive out numbers even lower."
One goal that fits in almost any case is to raise safety awareness. An incentive program can work simply by forcing people to pay attention. For example, Bar-S Foods Co. in Arizona cut its workers-compensation costs in half between 1988 and 1993. During that period, the company's main strategy was to carefully record lost-time incidents and watch the numbers.
In a similar way, Heartland employees use "close-call" forms to report situations on the plant floor that could lead to recordable incidents and injuries. With an incentive program in place, says Huber, "all of a sudden there is a reason to pay attention, because you're going to get something back for noticing."
How Can We Get the Most "Bang" for Our Incentives Buck?
Managers commonly assume that the most potent incentive for employees is money. Yet an extra $25, $50 or $100 added to an employee check can quickly vanish, eaten up by taxes or mundane expenses.
For this reason, many successful programs rely on low-cost gifts with high perceived value and tax-free status. According to Bill Sims, whose company designs and administers incentive programs, gifts that reinforce corporate identity can spark high interest. One of Sims' clients, a trucking firm that transports new cars, centered its program on a one-of-a-kind jacket imprinted with a special crest. To win the jacket, employees had to drive for three months without an incident. "On the last day of the contest, one driver backed his truck into a light pole and damaged the back window of a new car," Sims recalls. "He asked if he could buy that car. He didn't want to lose out and be the only guy at his terminal without a jacket."
W. R. Grace's experience is similar. Anapolle notes that no employee is going to get rich through the company's incentive program. Instead, the program's goals are to promote safety awareness, generate safety suggestions and routinely recognize employees for safe behavior.
Buck Peavey, president of Peavey Performance Systems, makes such concerns a top priority in the incentive programs he creates. "Merchandise awards alone will not make a successful program or create a safety-conscious environment," he says. "Programs tend to be much more effective when you build an environment of safety awareness through weekly reinforcement, team building, group interaction, positive peer pressure and constant communication."
You should also consider how to distribute incentives. Sims advises against contests that reward only a few people and reinforce the view that safety is a matter of chance or luck. Heartland Foods and W. R. Grace favor lottery-style programs that can potentially make everyone a winner.
Such programs provide employees who meet safety goals with scratch-off game cards. In some programs, the cards reveal points that the participant collects and redeems for merchandise in the program catalog. In others, employees scratch off cards to see if they have matching symbols, which they can redeem for a prize.
GUIDELINES FOR A SUCCESSFUL INCENTIVES PROGRAM
As you develop an incentive program for your company, remember, you don't need to start from scratch. A little research will lead you to a rich and extensive assortment of literature on incentives based on the experience of companies with successful programs. Despite the diversity, a few common themes dominate. Some examples follow.
DECIDE WHAT BEHAVIORS TO REWARD AND REWARD THEM CONSISTENTLY
Michael LeBoeuf, management consultant, suggests that anybody who wants to reward employees should begin with one question: What behaviors do we want to reward? The thesis of his book, "The Greatest Management Principle in the World," is "the things that get rewarded get done." It sounds simple enough, yet day-to-day practices and unwritten codes of behavior might reward undesirable behaviors. For example, an official goal might be company loyalty; yet the highest salaries may go to the newest employee or to those who threaten to quit.
OFFER MEANINGFUL INCENTIVES
Meaningful incentives are tied to specific behaviors or results. Such incentives are also timely and appropriate to the level of accomplishment. "An employee who completes a two-year project should be rewarded in a more substantial way than the one who simply does a favor for you, " writes Bob Nelson in "1001 Ways to Reward Employees." And to boost the impact of an incentive, give it soon after the goal has been met.
CUSTOMIZE INCENTIVES TO YOUR COMPANY
What works for one company might not work for others. Company cultures differ radically; that means successful incentives differ also. Before you choose an incentive, consider employee demographics-- factors such as age, rate of turnover, geographic location, and racial and ethnic diversity. Nelson suggests that you distribute a "reinforcer survey" to find out what kinds of rewards employees actually want. Incentive programs thrive on employee input.
KEEP IT SIMPLE
Joan Klubnick, author of " Rewarding and Recognizing Employees," notes that managers and supervisors often fail to give recognition for a simple reason: They don't know what to say. Klubnick offers a "recipe" for recognition-- basic guidelines to use on a daily basis:
1.) Thank the employee by name.
2.) State specifically what the employee did to earn your recognition.
3.) Explain how you felt about this behavior.
4.) State how the behavior added value to the company.
5.) Thank the person again by name.
How Can We Sustain the Incentives Program?
To create a successful incentive program, you need to be willing to experiment and learn by trail and error. One way to reduce the learning curve is find out what other companies are doing and consult literature on incentives.
Anapolle recommends that you design a cohesive program and then give it time. "We took a lot of separate programs that were giving out premiums and various small cash awards. Then we added up what we were doing and said, let's roll these all into one program and see how that works for the next three or four years."
Huber adds that consistency and follow-through are key. "You can't start an incentive program and then walk away and expect it to run itself. You have to have safety meetings and give away incentives every month. Programs work when you implement employee suggestions and correct safety problems as they happen."
Buck Peavey agrees, adding that you need to build a strong communications campaign within your incentive program. "Posters, memos, program updates, materials for companies with multilingual environments and videos help keep the program at the forefront of the employees' minds."
A suggestion from both Huber and Anapolle is to change the incentive programperiodically so that it stays fresh. Even a relatively minor change, such as a new gift item, may be enough to sustain employee interest.
Keep the Focus on Recognition and Safety
Among the "how questions," perhaps the most important is how to keep the focus on fundamentals. After reviewing the relevant research, Nelson argues that incentive programs work when they tap into the reward that employees favor most: a manager's on-the-spot, public recognition of a job well done. He quotes Mary Kay Ash, founder of Mary Kay Cosmetics, on this point: "There are two things people want more than sex and money… recognition and praise."
Huber, Anapolle and others who've succeeded with incentives also report that these programs are simply the "icing on the cake"-- just one part of an overall program that emphasizes safety at every point from hiring to training and daily supervision.
Reprint from Safety & Health Management Magazine.
Sources: Vic Anapolle, plant manager, W.R. Grace; Marie Huber, safety, health, and training director, Heartland Food Co.; Michael LeBoeuf, professor of management, University of New Orleans; Bob Nelson, management consultant and author; Buck Peavey, president, Peavey Performance Systems; Bill Sims, president, The Bill Sims Co.