Safety Incentives - An investment that Can Improve Your Bottom Line
 Nov. 18, 2010

There are key elements of your Injury and Illness Prevention Program that are essential to reducing workers’compensation losses. Generally, those components focus on training employees to work productively by avoiding unsafe acts. Employers spend considerable time and money on these programs, but with varying results. Understanding why a program works or doesn’t work is critical to crafting a program that will essentially help you achieve your safety goals.

Working safely is a behavior. Behaviors can be modified by reward or punishment. Positive behavior is most effectively motivated by reward. Accordingly, the use of incentives to focus worker attention on safety has been a prominent part of sound risk management programs for decades. But, the results and opinions regarding the effectiveness of safety incentive programs are mixed. Risk managers and safety directors supporting these programs believe that success lies not only in the incentives themselves, but also in developing a comprehensive plan that incorporates:

  • Specific goals
  • Measurable results
  • Communication
  • Feedback mechanisms
  • Tools for evaluating return on investment

  • All too often incentive programs are abandoned by companies because they are deemed ineffective. Why is this? Frequently, it’s because communication efforts are sporadic and inconsistent. Key results, such as reaching milestones, are oftentimes not celebrated or promoted. Ultimately this leads to a stale program with little relevance to your employees.

    Safety Program Objectives
    The individual reasons for employing a safety incentive program will vary among
    employers. An evaluation of successful safety incentives for both small and large
    employers point to three common objectives shared by all:

    1. Reducing Accidents and Injuries
    An unsafe act is an undesirable behavior. One of the benefits of a program with
    individual rewards is that it can empower individual employees to set behavioral examples for others to follow regarding safety procedures and safe working practices. Employees are rewarded for their individual safety
    contribution. On the other hand, group programs can be effective in keeping individuals from breaking rules or performing unsafe practices for fear of
    spoiling any reward opportunities for the rest of the team. There is peer
    pressure in group incentive programs to keep everyone working safely in order to avoid accidents so they can achieve the group reward.

    2. Cost Improvement
    The potential losses from accidents and injuries go beyond workers’compensation benefits. Accidents and injuries result in lost productivity, as well as, the extra expenses to replace and train new employees. These indirect costs of workers’ compensation claims can be more than the direct costs or benefits.

    3. Boosting Morale and Boosting
    Motivation Studies have shown that employees need an occasional pat on the back. After all, they are the company’s foundation. It is widely accepted that employees have a higher degree of loyalty to companies that reward them above their expected paycheck for helping to achieve company objectives. When employees work
    together toward a common goal, such as an excellent safety record, they
    experience a degree of camaraderie and become motivated to be productive and cautious regarding safety procedures. Employees who have high morale tend to have more respect for their employer and are less likely to place a false claim. This translates into fewer exaggerated claims of injury or illness.

    Strategies for Success
    Once you decide to implement a safety incentive program there are a few basic considerations you need to address before kicking the program off:

    Plan to Recognize Employees Publicly
    Not everyone likes attention from the crowd, but most people feel a sense of pride when recognized in front of their peers and superiors for their accomplishments. Give verbal recognition along with a tangible reward. Consider using company
    newsletters, internal e-mails or the company intranet to recognize safety conscious employees.

    Cash Has Little Value
    It may seem surprising, but cold hard cash is a low motivator for employees. Studies show that employees begin to view cash rewards as part of their regular compensation and end up using financial rewards to pay bills. Employees quickly forget how the money was earned, which in turn defeats the program’s intentions.

    Make Rewards Value Added for Employees
    Employees need to feel that the reward for helping to maintain a safe work
    environment has value. It needs to drive them beyond performing their duties for paychecks and influence them to perform safe behaviors. Many larger employers use a 2% rule of thumb in rewarding employees. Employees are given a non cash incentive worth approximately 2% of their annual compensation.

    However, companies do not need to make rewards a costly expenditure to make safety incentive programs successful. As long as the reward has value to employees it will be effective in motivating safe behavior.

    You may want more information on safety incentives or help in developing a program for your company. If so, contact CMTA Workers’ Compensation Group at (918) 498-3340 or <a href="mailto:aviglietti@cmta.net">aviglietti@cmta.net</a>.

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