Effective Motivation - OHS Magazine - October 2000
The Wall Street Journal - April 3, 2000
What inspires people to run marathons?
Safety Incentives Can Be Fun & Simple
1001 Ways to Reward Your Employees
Safety Incentives Programs:
Three Questions That Promote Success

Safety & Health Magazine
The Seven Secrets to a Successful Incentive Program
How do employees like the Buck Program?
A Collection of Case Histories
Florida Power Kicks Off Scratch Off Incentive Program
The Tampa Tribune
And The Wall Street Journal says...
How To Run an Effective Safety Incentive Program
Safety & Health Magazine



The Wall Street Journal - April 3, 2000

Many employers seek to replace cash bonuses with other work incentives.

Merchandise and travel awards are more memorable with employees, officials say. Diebold Inc, Canon OH, which makes automated teller machines, recently scrapped cash for sales people as lacking trophy value, says Jerry Bryan, marketing services manager. "Recipients tend to spend their cash incentives on routine expenses such as house payments or braces for their children", says the Society of Incentive and Travel Executives.

When American Express Incentive Services polled 1,101 workers, 29% said they used their cash rewards to pay bills and 18% couldn't remember what they did with the money.

MasterCard International, has replaced cash bonuses for its employees with hotel, show-ticket, and other gifts.

A customer-service rep for American Century Cos., a Kansas City, MO, mutual fund firm, refused to work on Y2k problems over New Year's after learning that $250-a-day bonuses were pretax, not after tax.



What Inspires People to Run Marathons?

It certainly takes more than a T-shirt at the finish line to encourage that level of commitment.

In the same way, it takes more than rewards---money, merchandise or travel---to inspire people to run your company's marathons. We believe incentive programs involve far more than incentives--results are what really matter. Ultimately, incentives are about people achieving results: how you can help your participants finish---better, win---their races, whether the distance is long or short.

Consider these three elements when you plan your program...

  1. The goal. Where there is no goal there can be no measurable improvement. The same can be said for a goal that does not elicit personal commitment from those expected to achieve it. We'll show you how you can best get participants' buy-in to program, team and individual goals.

  2. The motive. Your company has business reasons for setting goals, but the people who achieve them are more likely to do so for emotional reasons. To improve performance requires eliciting the emotions that cause people to care deeply about achieving an objective or goal.

  3. The results. When you purchase a program from us, you're buying results. Solid, Time-Tested, and effective.

So if you're considering cash as an incentive program, consider this....

Mazda Motor of America, Inc., wanted to accelerate sales of its light-truck series. They implemented an incentive program awarding one group of salespeople with cash and another with merchandise.

When the final results were tabulated, it was confirmed that all classes of dealerships in the MERCHANDISE GROUP had generated significantly better sales results than had their counterparts in the CASH GROUP. The data was compiled and analyzed by ViMarc, Inc., an independent research firm, and found to be statistically significant at a 95 percent confidence level.

Call us today to get your record-setting incentive program started--your people will be running circles around your competition in no time!



Safety Incentives Can Be Fun & Simple

By Bob Nelson, Author of the bestseller business book,
1001 Ways to Reward Your Employees
(Call 760-743-5030 to order a copy of Bob's book)

Here is an idea that has had much success in recognizing safety in operations of all types. Safety Bucks is a simple employee recognition tool, developed by Bill Sims, Jr., at the Bill Sims Company, Columbia, SC.

In the program, employees receive scratchoff Safety Bucks for meeting goals set for them, including attending safety meetings, and making suggestions, working safely for a month as an individual or as a team. Employees scratch off their Bucks to reveal prize amounts of $20, $50, or $100. Even a non-winning coupon is worth $1 in credit toward the purchase of select merchandise.

"The sense of excitement this program creates is really contagious," says Sims, "because employees see their co-workers earning 50 or 100 Star Perks and they know they might be next to win." Since every Star Perk is always worth at least one dollar, no one is demotivated by getting a loser.

Employees save their Bucks and order from a vast catalog offering thousands of gift options. Items in the catalog all bear a company Excellence logo and can be further customized for each company.

Better Than Cash
Sims initially started working with one company using cash as a motivation tool. Their $20,000 budget only put $11,000 in the pockets of their employees after taxes. And, eight out of ten employees who received cash couldn't remember when they got it last and weren't sure what it was for. In a revamp of their program, the entire $20,000 investment was able to be awarded tax free to their employees through Safety Bucks.

Unlike cash and store certificates, where you can lose half of every incentive dollar to taxes, this program can be set up as tax free, delivering more bang for your buck.

Value of Personal Touch
Sims says many clients will give 10 Star Perks to each manager on one day of the month and ask them to go find 10 people doing something right and hand out the bucks. "Just having something to hand their employees helps these managers get over the hump and go out and recognize important behaviors," says Sims. The context of the award gives it far more value than it would otherwise have without a personal touch.

Safety Bucks Pay Off
Heartland Foods in Marshall, MN was experiencing 285 lost-time injuries every year doing turkey processing with workers from Somalia, many speaking no English. in just one year with the program, lost-time injuries were cut to 14. According to National Safety Council statistics, each lost-time injury cost an average of $27,000. Total direct and indirect savings were estimated at $7,317,000 based on a budget of only $25,000 per year.

Not Just for Safety
Many clients are renaming the program Star Perks and expanding it to address all types of performance, including suggestions, customer service, and health and wellness. For example, Southern Carolina Electric & Gas received only three Bright Ideas per year from 1,000 employees. Rewarding those ideas with Star Perks stimulated 137 ideas in just 9 months, with one idea saving $30,000.



Safety & Health
January 1997
By Doug Toft

SAFETY INCENTIVE PROGRAMS"
"Three Questions That Promote Success"

Synopsis: Though successful incentive programs differ widely in content, their underlying processes are consistent. Companies that succeed with such programs ask questions that lead to clear goals, meaningful incentives, and long-term follow-through. These factors can be more crucial than the type of incentives used.

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 one company offers steak dinners as an incentive to employees who go for a quarter with no lost-time injuries. Another offers gift certificates to Wal-Mart, and a third offers straight cash awards. The question remains: What incentives will work for my company?

This question is a powerful one-and not always the most important. People who are new to incentive programs often focus on the content of the program, e.g., what kinds of incentives to offer. Though this question is key, it's also crucial to ask the "how questions." Such questions reveal the processes that drive successful incentive programs. Though these programs differ widely in particulars, their underlying dynamics are surprisingly consistent.

Incentives-Everything from Bananas to Boats

Begin with a pause to consider how much the term incentive 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 Hewlett-Packard Company. 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 ten basic categories of employee incentives. Besides money, these include:

By asking the three "how questions" that follow, safety managers can narrow down this list and choose incentives that change employee behavior.

  1. How do we set goals for our incentives program?

    To say that safety incentives should relate directly to safety goals is a truism. Yet goals can be conceived in a variety of ways. Companies that succeed with incentive programs learn to state goals with care, knowing that different wordings of a goal can lead to different results.

    An obvious purpose of incentive programs is to raise safety performance. Given that overall goal, employees can receive incentives based on many different criteria: days without recordable accidents, months without lost-time injuries, 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.

    One basic choice is between change or maintenance. Some companies want to cut losses due to accidents and injuries, while others aim to maintain safety records that are already excellent.

    Heartland Foods, a Minnesota firm that processes turkeys, aimed for a big change. "We had a high level of people who were on workers compensation-employees out on a long-term basis," says Marie Huber, safety health and training director. "Now our numbers are way down." After 18 months with a safety incentives program, Heartland went from 785 lost-time injuries to 14. 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 eleven years without a lost-time accident-a million-and-a-quarter employee hours. Our recordables are typically one or two a year for a population of about 70 people. We would hope that incentives programs would drive our numbers even lower."

    Raising safety awareness is one goal that fits in almost any case. An incentive program can work simply by forcing people to pay attention. For example, Bar-S Foods Company 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 accidents and closely 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 accidents 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."

  2. 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. 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 accident. "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. "We put the emphasis on the program itself and how that motivates people rather than on the merchandise awards," says Peavey. "The merchandise award certainly is the catalyst. But we put most of the emphasis on how the program works-how it builds teamwork and motivates people outside of the awards."

    A related issue is 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. For example, employees who meet safety goals can receive scratch-off tickets called "safety bucks." If the buck contains matching symbols, employees can redeem it immediately for a prize. If not, employees can still accumulate the bucks and redeem them later for gifts or other rewards.

  3. How can we sustain the incentives program?

    Creating a successful incentive program involves a willingness to experiment and learn by trial-and-error. One way to reduce the learning curve is find out what other companies are doing and consult the recent literature on incentives (see sidebar).

    Anapolle sees advantages in designing a cohesive program and then giving 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 that it's going 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."

    A related suggestion from both Huber and Anapolle is to change the incentive program periodically 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"-one part of an overall program that emphasizes safety at every point from hiring to training and daily supervision. Asking "how questions" can restore the needed perspective and lift a safety manager's eyes to this larger horizon.

Sources: Vic Anapolle, plant manager, W.R.Grace; Marie Huber, safety health and training director, Heartland Foods; 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 Company.


Sidebar Article:
Guidelines for a Successful Incentives Program
An Emerging Consensus

When creating an incentive program, safety managers don't need to start from scratch. An rich and extensive literature on incentives-based directly on the experience of companies with successful programs-is now available. Despite the diversity in this literature, a few common themes dominate. Some examples follow.

Decide What Behaviors to Reward -And Reward Them Consistently

Michael LeBoeuf, management consultant, suggests that anybody planning how to reward employees begin with one question: What behaviors do we want to reward? The thesis of his book The Greatest Management Principle in the World is that "the things that get rewarded get done." Sounds simple enough. Yet day-to-day practices and unwritten codes of behavior might reward undesired behaviors. For example, an official goal might be company loyalty; yet the highest salaries may go to employees most recently hired, or to those who threaten to quit.

Offer Meaningful Incentives

Meaningful incentives are tied to specific behaviors or results. In addition, these incentives are 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 meet.

Customize Incentives to Your Company

Beware the "canned" incentive program. What works for one company might not work for others. Company cultures differ radically; that means successful incentives differ also. Before choosing incentives, consider employee demographics-factors such as age, rate of turnover, geographic location, and racial and ethnic diversity. Nelson suggests distributing 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:

Sources:
Bob Nelson, 1001 Ways to Reward Employees (New York: Workman, 1994). Joan P. Klubnick, Rewarding and Recognizing Employees: Ideas for Individuals, Teams, and Managers (Chicago: Irwin, 1995). Michael LeBoeuf, The Greatest Management Principle in the World (New York: Putnam's, 1985).

Callouts:

Contact information:
Anapolle, plant manager, W.R.Grace, 5225 Phillip Lee Drive, Atlanta, GA 30336, 404-691-8646.
Marie Huber, safety health and training director, Heartland Foods, PO Box 263 Marshall MN 56258, 507-532-5234.
Bill Sims Jr., president, The Bill Sims Company, 102 Lake Vista, Chapin SC 29036, 800-690-1860.



The Seven Secrets to a Successful Incentive Program

After helping Chatham County Government reduce their injuries significantly, we were asked to speak by PRIMA, the Public Risk Managers Association, to speak at their 1997 Annual Conference in Albuquerque, New Mexico.

Here's a synopsis of what we covered, call for a free video if you'd like one...

Title: Seven Secrets to a Successful Safety Incentive Program

You've read about the miracle tool of the '90's risk manager--the incentive program. You've heard the success stories from factories and service businesses in your locale. Now you're ready to try it. Where do you start? How do you make sure that your first attempt doesn't fall flat?

The right incentive program can significantly reduce the number and severity of your accidents. But like most tools, fantastic payoffs require skilled and committed use. Used incorrectly an incentive program wastes money and time and casts a pall over any future programs.

Creating and running a successful safety incentive program requires learning seven simple -but critical- secrets:

  1. "If you don't know where you are going any road will get you there." Start your planning process by knowing where you are. Look at your accident record over the past two to three years. Is it getting better? Worse? Staying the same? How do your accident rates compare to your peers?

    What do your "average" Lost Time and Recordable accidents cost and how does this compare with your peers?

  2. Read a year's worth of accident reports. What do your employees REALLY need from you? Basic information on safe work practices? An incentive to work safely when no one's looking? Recognition for working safely? All three?

    Over time, successful incentive programs shift emphasis from education to performance and recognition of safe behavior. Knowing when to shift your focus is crucial. In the early stages (the first year or two) of a program you might reward employees who participate in your educational efforts: contributing to safety meetings, serving on a safety committee, helping with safety inspections. Once participation becomes the norm then you shift focus to reward safety achievement: working one month, one quarter, and one year safely.

  3. Picking the right incentive is one of the most difficult choices most managers make. Historically monetary awards have been the choice of most managers. That's changing. A recent survey conducted by Simmons Market Research Bureau and reported in Incentive Magazine found that cash had fallen from first to fourth place as the incentive used. Nearly twice as many companies use merchandise instead of cash.

    Managers are realizing that the cash amounts awarded in safety incentive programs do not motivate people to change their behavior. They spend the award on a tank of gas or the phone bill, and weeks later have forgotten where the money went. Awarding more money doesn't help -as the prize increases so does the likelihood of an employee hiding an injury so he doesn't lose his award.

    Smart executives build their programs around awards with "trophy" value -items that recognize the contribution for months or years. A well-designed incentive program will make certain that the incentive is never so great that an employee will risk hiding an injury.

  4. Reward frequently. Effective incentive programs reward participation and performance frequently: at least monthly.

    Rewarding individuals ensures that the people who work for you safely day-in day-out are recognized. Rewarding groups encourages positive peer pressure.

    Rewarding supervisors for their group's performance gets them fully behind the program-and their support is critical.

  5. Pick the right agency. If you are traveling to a new and exotic location chances are you'll buy your ticket from a travel agency -not directly from the airline. You'll want the agency's knowledge and expertise, which comes free when you buy from them. Successful incentive managers develop a similar relationship with an incentive agency. They look for someone with experience in safety incentive programs, committed to improving their accident record, not just selling products and services.

    Search for someone who can create an incentive program that supports your safety program. A well-designed program blends seamlessly with your current educational and promotional efforts. Look for an agency that will custom design it's system to you, providing training advertising aids that fit your work force.

  6. Plan for the "long haul." Maintaining enthusiasm months after you've started your program is challenging. A program is doomed to fail when managers treat it in an indifferent or casual way. Employees turn their backs on programs when managers forget to report January's performance until March or hand out April's awards in June.

    Meet the challenge by creating a list of tasks you'll need to do and when you'll need to do them. Delegate judiciously: have department managers present awards, have safety committee members track and report performance data. But follow-up, follow-up, follow-up!

  7. Measure your progress. Between the first six and nine months of a program take a critical look at how it's being accepted. Are employees talking about the program? Are they looking forward to their awards? Are you beginning to see a reduction in the number of accidents and their severity?

Two or three years into an incentive program you'll want to think seriously about changes. Even the best program loses it's effectiveness over time. Is it time to change the emphasis from education to performance? From individual recognition to group? Here's where your agency can be a big help. A good agency will work with you to find the root causes of the accidents you're having and they'll present a number of plans that address those causes.

Incentive programs are an increasingly valuable tool in the Risk Manager's tool kit. Once you know the secrets to successful use of this tool you can get those miraculous results too.



How do employees like the Buck Program?

Some Comments From Satisfied Employees About The Buck Program...

Ronald Horinek
"I have been with the same company for 9 years and have seen many safety programs come and go. But, with Safety Bucks I have found something more special. I work second shift so a miss a lot of quality time with my wife. So what I have done is wait 'til my wife gets home to scratch off my Safety Bucks so we can have some fun, quality time together. Accidents have decreased in the plant....and the program helps bring families and employees together".

Rick Winters
"I like the Safety Buck program because it's an incentive to work safely. You can save up your Safety Bucks and get good, quality merchandise. Everyone in the company works together!"

Gary Wieck
"I think your program has helped a lot to bring production up and injuries down. It's always nice to receive something for doing a good job!"

Duane Lund
"What I like most about the Buck Program is the fact that it maintains awareness for all employees to work more safely and that everybody is a WINNER"!

Wayne Trelka
"What I like best about the Safety Buck Program is I can earn Safety Bucks at a variety of levels. If someone else gets hurt and I'm not involved, I don't lose my Safety Bucks that I've accumulated".

Dennis Jackson
"The Safety Buck Program has always impressed me because it helps all of us think about safety in our jobs. When I see someone who is not using proper safety methods, I no only remind them about safety, but it refreshes my memory and keeps me working safely. It also reminds us of how important it is to be safe off-the-job. I hope the program continues to reward us for doing what we all agree is important, and that is, to work safely every day!"

Scott Miller
"The Buck Program is an excellent program because it gives employees the incentive to work more cautiously. It is a superb way to keep accident rates down......"

...."I feel more secure knowing other employees feel the same way I do about safety. I know that they are looking out for my safety as well as their own...The Safety Buck Program has helped us to do this."



A Collection of Case Histories

"To say that our Disney Trip winner was excited is an understatement! I'm not sure we've got him scraped off the ceiling."

Case History: Dorsey Trailers

In 1985, Dorsey Trailers had a problem. Dorsey was experiencing record turnover and absenteeism in its two plants. Like many other firms, Dorsey had a program rewarding one year of perfect attendance with cash. But employees simply weren't involved. Only five percent of Dorsey's employees recorded one year of perfect attendance. The Buck Program was used to recognize and encourage good safety & attendance habits. Employees earn Dorsey Bucks for each month of perfect attendance & safety. In merely three years, absenteeism has dropped from 7 percent to just 1.7 percent, the lowest rate EVER! This program saved Dorsey tremendous sums through better productivity and quality, and increased efficiency.

And in the four year period before the Buck Program was implemented, Dorsey Trailers' Elba, Alabama plant averaged 68 Lost Time Injuries per year. Once the Safety Buck and Safety Is...programs were instituted, Dorsey has experienced less than 10 lost time injuries each year.

Poultry Processor Safety Manager

"I feel it has helped to significantly improve our safety awareness in the plant: so much so that we had a record-setting year again last year with only six percent of our employees having a doctor-case accident -- A FORTY PERCENT DROP! I am looking forward to another great year."

Case History: V.C.Summer Nuclear Station-South Carolina Electric & Gas, VC Summer Nuclear

Station had a problem. The Summer Station was suffering from a shortage of employee suggestions for its ALARA Program. Employee ideas for reducing radiation exposure for given operations and jobs are a crucial part of maintaining low radiation exposure and reducing nuclear waste. From its 1,000 employees, the Summer Station in 1989 received just 3 suggestions for ALARA improvement. After implementing the Buck Program they received over 117 ALARA Bright Idea Suggestions during only one year of running the Buck Program. Just one of these ideas saved them $30,000!



Florida Power documented over $100,000 in savings using the Buck Program, as you can see here! Here's the article as it appeared in The Tampa Tribune...

Florida Power Kicks Off
Scratch Off Incentive Program

By Dean Solov-Tampa Tribune Staff Writer

CRYSTAL RIVER- Radiation is one of those things where less is better. Dental hygienists know it: they clear out of the room during X-rays. But working around radiation is so commonplace for nuclear plant workers that it's sometimes useful to remind them. So, Florida Power Corporation has embraced an incentive program aimed at doing just that. Company supervisors have been handing out prize winning, scratch-off Star Perks(tm) to workers who go the extra mile reducing their exposure and that of their fellow workers.

"When you're working around radiation, you can't see it, you can't smell it, you can't taste it," said William L. Rossfield, Manager of Site Nuclear Services. Unlike a traditional lottery type program, every ALARA Star Perk is a winner, and radiation conscious employees can redeem them for prizes that include Florida Power T-shirts, Baseball caps, and even CD Players. "ALARA", an industry acronym, stands for "as low as reasonably acheivable."

The ALARA bucks, handed out during the recent maintenance outage, serve as "little pats on the back for our people out there to be a little more ALARA conscious," Rossfield said. Among those who got the pat was Eddie Pike, a mechanical superintendent for Fluor Corp. who, with Fluor pipe fitters, made about 100 welds outside the radiation area rather than inside.

"It could have been done inside, and he had wherewithal to go outside the radiation area," Rossfield said. Florida Power has fared well at staying within federal guidelines for radiation exposure, but Rossfield said the utility can always try to do better. He credits the program -- along with other ALARA efforts -- with helping cut exposure in half during the outage. In addition to safety, less exposure means more savings because of costs involved in protecting employees working in radiation areas. The program -- prizes and all -- cost about $5, 000, and has probably saved about $100,000.

The ALARA Bucks and prizes all come out of the Bill Sims Co., a Columbia, SC, company that specializes in programs to motivate employees. Bill Sims, Jr, President, at Bill Sims, said the Crystal River Nuclear Plant is one of dozens that have begun using the incentive program -- with its transferable "money" -- since 1990. The programs have saved those plants more than $2 million in two years, he said. The company develops tax-free incentive motivation programs for companies of all sizes, including Dupont, Milliken, and General Motors.

"We develop each program custom for every client." says Sims, who goes on to add, "We start by looking at areas a company can save money through improved employee performance. Then we develop a custom solution that is easy to administer and really works." The Sims Company has documented over $500,000 in savings in Safety Improvement for Dorsey Trailers, and similar achievements in other areas like Bright Idea Suggestions, Absenteeism & Turnover Reduction, Scrap Reduction and Quality Improvement.

One Minnesota poultry processor has had even more spectacular results--reducing injuries from 785 Lost Time Incidences per year to 14 per year. Sims comments, "They were very skeptical about incentive programs at first--worried that incentives would cause injury hiding. Minor cuts, if not treated, become very serious injuries due to bacterial infections from turkey processing. So we took great care to develop rules that would not promote injury hiding. In fact, we received over 212 Safety Suggestions from employees who helped us find and correct unsafe conditions before injuries occurred."

Another client of Sims is a large bakery firm with over 3500 employees in 10 locations. "One of the worst plants at this firm has 800 employee and has average 8 Lost Time Injuries per month for the last 10 years. This marks their third month in a row with ZERO Lost Time Injuries", says Sims, who adds, "the entire company has had a 50% reduction across the board in injuries." But Sims has a word of caution, too. "Don't make the mistake of thinking incentives are a substitute for a well managed total safety program. Incentives are part of the solution." Experts also suggest that you choose your incentive supplier carefully. What results can they show? What is their track record? How much do they learn about your business before recommending a solution? Every company is different; and what works one place often may not work as well at another. Building a successful incentive program is complex, and it requires lots more than just pretty pictures and flashy gift items. The company has a website at www.billsims.com.




And The Wall Street Journal says...

In the August 13, 1996 issue, a recent article entitled "Kentucky Plant Workers are Cranking Out Good Ideas", Robert Lee Rose, Staff Reporter, writes....

"Jason Moncer has earned a nickname at a Johnson Controls Incorporated auto-parts factory in Georgetown, Kentucky.

Co-workers call him Mr. Kaizen, a reference to the Japanese word for continuous improvement. In June alone, Mr. Moncer came up with 30 suggestions for improving the plant. "I go on sprees," says the 21-year-old, whose latest ideas involve better ways to organize the metal seat components in his work area before he and others insert them into the foam used to make car seats.

In factories across the country, workers are suggesting ways to make their companies more efficient. But nowhere is the art practiced better than at Johnson Control's FoaMech factory, a key supplier to Toyota Motor Corporation's auto assembly plant in Georgetown. Out of 631 employee suggestions last year, the company found 221 good enough to implement. It says that each of the 230 workers provided at least one suggestion, either individually or as part of a team.

By saving money for the company workers improve their collective chances of getting bonuses at the same time they work toward individual awards. Mr. Moncer, for example, is saving up "FoaMech Bucks" to get a large screen TV.

Now we're not promising that you'll be written up in The Wall Street Journal, but, who knows?




And the January 1997 Safety & Health Magazine features two of our clients W.R. Grace & Heartland Foods in this article…
Please call for a reprint of this!

"How To Run an Effective Safety Incentive Program"

"Safety & Health", January 1997, By Doug Toft

Synopsis: Though successful incentive programs differ widely in content, their underlying processes are consistent. Companies that succeed with such programs ask questions that lead to clear goals, meaningful incentives, and long-term follow-through. These factors can be more crucial than the type of incentives used.

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 one company offers steak dinners as an incentive to employees who go for a quarter with no lost-time injuries. Another offers gift certificates to Wal-Mart, and a third offers straight cash awards. The question remains: What incentives will work for my company?

This question is a powerful one-and not always the most important. People who are new to incentive programs often focus on the content of the program, e.g., what kinds of incentives to offer. Though this question is key, it's also crucial to ask the "how questions." Such questions reveal the processes that drive successful incentive programs. Though these programs differ widely in particulars, their underlying dynamics are surprisingly consistent.

Incentives-Everything from Bananas to Boats

Begin with a pause to consider how much the term incentive 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 Hewlett-Packard Company. 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 ten basic categories of employee incentives. Besides money, these include:

By asking the three "how questions" that follow, safety managers can narrow down this list and choose incentives that change employee behavior.

1. How do we set goals for our incentives program?

To say that safety incentives should relate directly to safety goals is a truism. Yet goals can be conceived in a variety of ways. Companies that succeed with incentive programs learn to state goals with care, knowing that different wordings of a goal can lead to different results.

An obvious purpose of incentive programs is to raise safety performance. Given that overall goal, employees can receive incentives based on many different criteria: days without recordable accidents, months without lost-time injuries, 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.

One basic choice is between change or maintenance. Some companies want to cut losses due to accidents and injuries, while others aim to maintain safety records that are already excellent.

Heartland Foods, a Minnesota firm that processes turkeys, aimed for a big change. "We had a high level of people who were on workers compensation-employees out on a long-term basis," says Marie Huber, safety health and training director. "Now our numbers are way down." After 18 months with a safety incentives program, Heartland went from 785 lost-time injuries to 14. 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 eleven years without a lost-time accident-a million-and-a-quarter employee hours. Our recordables are typically one or two a year for a population of about 70 people. We would hope that incentives programs would drive our numbers even lower."

Raising safety awareness is one goal that fits in almost any case. An incentive program can work simply by forcing people to pay attention. For example, Bar-S Foods Company 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 accidents and closely 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 accidents 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."

2. 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. 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 accident. "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.

Sims makes such concerns a top priority in the incentive programs he creates. "We put the emphasis on the program itself and how that motivates people rather than on the merchandise awards," says Sims. "The merchandise award certainly is the catalyst. But we put most of the emphasis on how the program works-how it builds teamwork and motivates people outside of the awards."

A related issue is 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. For example, employees who meet safety goals can receive scratch-off tickets called "safety bucks." If the buck contains matching symbols, employees can redeem it immediately for a prize. If not, employees can still accumulate the bucks and redeem them later for gifts or other rewards.

3. How can we sustain the incentives program?

Creating a successful incentive program involves a willingness to experiment and learn by trial-and-error. One way to reduce the learning curve is find out what other companies are doing and consult the recent literature on incentives (see sidebar).

Anapolle sees advantages in designing a cohesive program and then giving 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 that it's going 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."

A related suggestion from both Huber and Anapolle is to change the incentive program periodically 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 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"-one part of an overall program that emphasizes safety at every point from hiring to training and daily supervision. Asking "how questions" can restore the needed perspective and lift a safety manager's eyes to this larger horizon.

Sources: Vic Anapolle, plant manager, W.R.Grace; Marie Huber, safety health and training director, Heartland Foods; Michael LeBoeuf, professor of management, University of New Orleans; Bob Nelson, management consultant and author; Bill Sims, president, The Bill Sims Company.


Guidelines for a Successful Incentives Program
An Emerging Consensus

When creating an incentive program, safety managers don't need to start from scratch. An rich and extensive literature on incentives-based directly on the experience of companies with successful programs-is now available. Despite the diversity in this literature, a few common themes dominate. Some examples follow.

Decide what behaviors to reward-and reward them consistently

Michael LeBoeuf, management consultant, suggests that anybody planning how to reward employees begin with one question: What behaviors do we want to reward? The thesis of his book The Greatest Management Principle in the World is that "the things that get rewarded get done." Sounds simple enough. Yet day-to-day practices and unwritten codes of behavior might reward undesired behaviors. For example, an official goal might be company loyalty; yet the highest salaries may go to employees most recently hired, or to those who threaten to quit.

Offer meaningful incentives

Meaningful incentives are tied to specific behaviors or results. In addition, these incentives are 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 meet.

Customize incentives to your company

Beware the "canned" incentive program. What works for one company might not work for others. Company cultures differ radically; that means successful incentives differ also. Before choosing incentives, consider employee demographics-factors such as age, rate of turnover, geographic location, and racial and ethnic diversity. Nelson suggests distributing 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:

Sources:
Bob Nelson, 1001 Ways to Reward Employees (New York: Workman, 1994). Joan P. Klubnick, Rewarding and Recognizing Employees: Ideas for Individuals, Teams, and Managers (Chicago: Irwin, 1995). Michael LeBoeuf, The Greatest Management Principle in the World (New York: Putnam's, 1985).