A wake-up call from OSHA last year has many safety managers thinking hard about their incentive programs.by Bill Sims, Jr.
A little more than a year ago, the Occupational Safety & Health Administration gave every safety director a wake-up call when it fined a company called USA Waste $65,000 for having a safety incentive program. And what a call that was!
OSHA cited USA Waste Management of Ohio under 1904.2(a) of the recordkeeping standard (the OSHA 200 Log reporting requirement). USA Waste Management has a bonus pool that rewards employees with excellent safety records. The pool also includes good attendance and good work practices. The citation suggests Waste Management coerced employees to go against medical authorities in order to falsify records. USA Waste Management is contesting the citation.
Many factors cause under-reporting besides poorly designed incentive programs. These include sloppy recordkeeping, lack of management, and more.
OSHA takes the position that "Traditional Incentive Programs" that link rewards to injury reduction "can provide an inducement for workers to under-report injuries and illnesses." Some members of the National Advisory Committee on Occupational Safety and Health (NACOSH) initiated an investigation by OSHA in 1998 to determine whether incentive programs lead to under or non-reporting of injuries. In October 1998, a firm commissioned by OSHA, Dennison Associates, submitted a draft report entitled "Review of the Literature on Safety Incentives." It was finalized in early 1999.
Twenty-seven incentive programs were formally reviewed, consisting of 16 non-traditional (safe work practices), nine traditional (results focus), and two programs dependent on several measures. This was considered empirical research. The remaining literature reviewed was anecdotal and for the most part described programs that linked employees to financial incentives to reduce the number of reported injuries. This was considered non-empirical data.
The review states, "There is, however, no empirical evidence that such incentive programs (Traditional) have an effect--either positive or negative. We are aware of no empirical studies that evaluate whether incentives exaggerate differences, if any, between reported and actual injury rates."
In earlier articles, we have clearly explained the root causes of injury-hiding and have shown that there are many, many causes of under-reporting besides poorly designed incentive programs. These include sloppy recordkeeping, lack of management, and more. Even OSHA recognizes there are very helpful "non-traditional" incentive programs that are effective, while avoiding the problem of injury-hiding.
But the USA Waste episode has produced a whole new way of looking at safety rewards and recogntion.
The Silver Lining Behind OSHA's Dark Cloud
Many safety managers for the first time are questioning their safety incentive programs. They're asking some healthy questions, such as:
Does our incentive program promote injury-hiding? Is our program doing us any good? Is it effective? What behavior changes can we point to and measure as a result of this program? Are we vulnerable to an OSHA fine in the area of injury-hiding? Isn't there some way we can shift to rewarding good behaviors that make safety happen?
The goal: shift to a totally proactive mentality instead of a reactive one. Safety managers are abandoning the age-old practice of rewarding solely for working a period of time without injury, and instead are rewarding for behaviors that make safety part of the process.
There is an enormous fraud factor attached to worker's compensation.
One safety director summed it up this way: "For twenty years we've rewarded departments that worked 90, 180, and 360 days with no lost time. We'd hand out their cash bonuses, but our hearts weren't in it. I know several cases where some of the most unsafe departments got an award, while those that tried harder didn't make it, because of something beyond their control. We need a way to reward safe behavior because that, in the long run, will put our numbers where they need to be."
It was in response to this that we developed a manual-based system some 20 years ago to provide a simple way to reward and recognize employees for following safe procedures, wearing PPE, and other proactive behaviors. This system is a way for a manager to stop, look an employee in the eye, and say, "Thanks, you're doing a great job, putting safety first. Keep it up!"
A new step in that progression is a system allowing a manager to scan an employee's bar code and then scan off all the safe behaviors and unsafe behaviors that employee demonstrates. The unit accumulates the data and provides management reports to show which individuals, teams, and departments are exhibiting safe behavior on a daily basis. Incentive awards are then made based on how proactive you are at safety. This is a new paradigm in safety incentive design. Instead of rewarding a team because those workers simply didn't have an injury, you can measure and reward individuals, teams, and sites based on what they did to make safety happen! Award points are given because you were observed working safely, or because your team has met its improvement goals in key safe behaviors.
But carefully rewarding safe work achievements is still a viable factor. Smart safety managers know there is an enormous fraud factor attached to worker's compensation. In this area, the incentive program is the only effective counterbalance to this abuse. It works where training, behavior-based safety, and all other approaches fail, because the unscrupulous employee thinks twice before ruining an award for other employees.
Emphasizing Proactive Behaviors
One company I spoke with had tried training, behavioral safety, and other techniques with some success--and finally was ready for incentives. I asked the manager whether he felt incentives really were needed.
"Absolutely!" he said. "Last month, we had a lost time injury. The employee was out of work for a week. He claimed that he hurt his knee at work, getting a splinter in it, didn't report it, and that later it had gotten infected and swollen up, resulting in a lost time injury."
Incentives work where all other approaches fail, because the unscrupulous employee thinks twice before ruining an award for other employees.
After investigating the injury, this safety manager discovered:
The injury occurred while the employee played basketball on his own time (the splinter was from the wooden basketball court). He decided he'd report it as a worker's comp case because his medical cost was lower.
The worker's compensation system creates an environment where this kind of abuse flourishes. Unfortunately, neither training nor the best behavior-based safety program can eliminate this type of abuse. But incentives can, and do, stop fraudulent abuse of worker's comp. This safety director was convinced an incentive program was the only answer for him.
"Before our incentive program, people ran to the doctor when they got any excuse," said Marie Huber, former Safety Director at Heartland Foods. "After our program, they thought twice about it and would let us treat many injuries in house, which drastically lowered our medical costs."
In conclusion, the trends we see in incentives are these:
Continued rewards for periods of safe work, but using proper techniques to eliminate injury-hiding. Greater emphasis on proactive safe behaviors and tying reward programs to this.
Safety incentives are alive and well in the year 2000. We applaud managers who vigorously question the status quo and are not afraid to shake things up as they look for other ways to improve their safety process.
As someone once said, "Sacred Cows make the best hamburgers."
The Bill Sims Company is located in Irmo, South Carolina, USA. They specialize in developing tax free incentive programs that reduce accident rates without injury-hiding. For more information call or visit http://www.1-800-224-2548.com.