Success Dispels Skepticism for Companies with Incentives Programs - 04/13/2005

Last month, our panel of motivational experts offered seven fundamental precepts upon which a successful incentives program can be built. This month, we talk to several companies that have put those principles into action.

by Josh Cable

Before Knoxville, Tenn.-based Denark Construction Inc. started a safety incentive program in 1999, safety manager Kaye Love-Dodgen was skeptical.

"I talked to several people about incentives programs and thought to myself, 'We're actually going to pay people to work properly and not get hurt?'" Dodgen said. "The concept of having to pay people for what they're supposed to do bothered me."

Dodgen was circumspect for other reasons: She believed safety incentives programs cause employees and supervisors to hide or not report injuries.

Five years later, though, Dodgen – who believes the "proof is in the pudding" – has changed her tune.

She's watched the company's incident rate plummet from 18.97 in 1999 to .83 in 2004.
She's seen exaggerated and false injury claims virtually disappear.
And she's observed a palpable change in the company's safety culture.
Today, Dodgen beams when she talks about employees not only helping their fellow Denark employees work safely but also helping Denark's subcontractors work safely, all with the goal of "making sure they go home to their wife and kids."

When it comes to employees' attitudes toward safety, Dodgen says it's simple: "They've changed."

When Employees Talk, Denark Listens

In employee meetings before and after the inception of Denark's incentive program, workers have been able to vote on how they'd like the program to be structured. Bonus checks won every time by a landslide.

Every quarter, Denark's hourly employees receive a bonus check if their particular project avoids:

Any serious OSHA citations issued to the company;
Individual violations of company safety policies; and
Accidents on that project.
Violations or accidents caused by Denark's subcontractors do not affect Denark hourly employees' bonuses, although they do affect project superintendents' bonuses, which are based on a number of criteria, including safety.

Denark distributes bonus checks at the company's quarterly employee breakfast, which is held at a banquet hall in Knoxville and attended by top executives, who update employees on company news, preview upcoming projects and review the company's overall safety performance and objectives.

Employee breakfasts, luncheons and similar gatherings provide built-in opportunities to dole out prizes, emphasize upper management's commitment to safety and keep workers updated on new developments in the program.

As for the employee breakfast and safety incentive distribution at Denark, "They love it," Dodgen said. "It's something everybody looks forward to."

The introduction of an incentive program at Denark coincided with several major safety developments in the company, which in the period of about 2 years expanded its employment ranks from 80 to 120 as a result of its booming business.

The company in 1999 split up human resources and safety into two separate departments, making Dodgen its first full-time safety director. Dodgen – who in her former role as Denark's human resources manager also had been the de facto safety director – said she then was able to concentrate all of her time and energy on the company's longstanding goals of eliminating accidents while making safety a permanent, everyday part of the company culture.

At that time, Denark formed what it called a tactical safety committee comprised of supervisors and hourly employees from each of its construction projects, which are spread across several states in the Mid-South. The new committee, working in conjunction with Denark's existing safety committee, conducted a comprehensive study of the company's accident data and produced new safety policies, mandating everything from 100-percent eye protection to a 50-pound limit for lifting objects unassisted, Dodgen explains. Violations of the new safety policies resulted in discipline ranging from verbal reprimands to dismissal from the company, depending on their severity and frequency.

"It was a zero-tolerance policy," Dodgen said.

The zero-tolerance policy extended to injury hiding: Employees were required to sign a waiver that said if they failed to report a work-related injury, they could lose their job. While injury hiding was one of her major concerns prior to starting an incentives program, Dodgen now believes it's not an issue.

Today, Dodgen is a believer in incentives programs.

"We've had one minor accident in the past 17 months," she said. Dodgen may have been skeptical at first, "But I've had the privilege to watch the past 5 years fly by successfully."

Fontaine Specialized

Springville, Ala.-based Fontaine Specialized is in the business of manufacturing low-bed, heavy-duty trailers for the construction industry and the military. Consequently, the company's approximately 175 production workers encounter some heavy-duty hazards.

"The average trailer has a carrying capacity of 55 tons," said human resources manager Max Dover. "We're dealing with some heavy steel."

Like Kaye Love-Dodgen of Denark Construction, Dover once was wary of incentives programs, owing to a prior "bad experience" with incentives at another company. But after implementing a safety incentives program at Fontaine Specialized in 2000 to help achieve the ambitious goal of zero lost-time accidents – "period, point blank, none" – he now swears by the company's program.

Dover points to some gaudy figures to state his case: He estimates workers' compensation costs at Fontaine Specialized have dropped from $300,000 in 2000 to about $20,000 in 2004. As for the goal of no lost-time accidents, he said there's been one in the past 3 years.

"It's just changed the attitude of the workers," Dover said. "They work for each other now. If one worker sees someone doing something hazardous, he'll stop him and offer to help or even suggest a better way to do it. They look out for each other now."

To achieve its ambitious goals, Fontaine Specialized turned to Bill Sims Jr., whose Columbia, S.C.-based performance improvement company offers safety incentives services and strategies.

In the first year of its program, Dover explains, Fontaine Specialized employees earned scratch-off cards – redeemable for prizes ranging from fishing gear to Florida vacations – for every month they worked without a personal injury (defined by Fontaine Specialized as any injury requiring a doctor visit). Employees also received a scratch-off card if their department collectively worked a month without a personal injury. All plant-level employees and supervisors were eligible.

In the second year of the program, Dover added one more component: Employees also could earn scratch-off cards for working a month without a lost-time accident.

Dover, chastened by his previous experience with incentives programs, noticed employees were reluctant to buy into the program in the beginning. But he said it "caught like wildfire" when they started getting the gifts they'd ordered from the Bill Sims Co. catalog, which has close to 100 pages of prizes in its most recent edition.

Whatever route you take to implement your incentives program – whether your company creates its own program or seeks the counsel of a consultant – motivational experts have noted that awards must be genuine, meaningful, important and worth achieving to the worker.

The potential dividends of an incentives program that applies that principle, as Dover explains, are "healthier, happier workers."

"They're not afraid to work and you're not spending the money elsewhere," Dover said. "I'd rather give the money to my people than spend it on doctors."

Last month, our experts also talked about the importance of upper management commitment to a successful safety incentives program. Often, that starts with the safety or HR manager making a sales pitch to top brass.

For Dover, that turned out to be a snap.

"I had someone run some numbers for me: For every dollar we lost off the bottom line [from costs associated with a workplace injury], it took $25 in sales just to make that up," Dover said. "It was a sales proposition by me, and it was easy when I got to 25 to 1."