How To Run an Effective Safety Incentive Program
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!
"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:
- Recognition
- Time off
- Stock ownership
- Special assignments
- Advancement
- Increased autonomy
- Training and education
- Parties and other fun activities
- Prizes
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 Star Perks. If the Star Perk contains matching symbols, employees can redeem it immediately for a prize. If not, employees can still accumulate Star Perks 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:
- Thank the employee by name.
- State specifically what the employee did to earn your recognition.
- Explain how you felt about this behavior.
- State how the behavior added value to the company.
- Thank the person again by name.
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).