A majority of U.S. businesses use some sort of safety incentive. Nevertheless, the debate continues as to their effectiveness. Learn how such programs are designed, their pros and cons, caveats to implementation, and possible alternatives.
The effect of rewards on motivation and performance is a well-studied subject in both management and safety literature. A majority of U.S. businesses use some sort of safety incentive, and most safety professionals believe that they are an important element in any safety and health program. Still, there is a vocal minority viewpoint contending that the ideologies surrounding the concept of safety incentives are based on flawed premises.
Three parallel debates have been underway for the past 4 years over the use of safety incentives:
Proponents feel incentives are an essential tool for any organization, regardless of size or industry, in promoting safe work practices. Incentives build and maintain employee interest in working safely and act as a motivator for employees to work safer. However, opponents feel safety incentives are to be avoided like the plague. This minority viewpoint holds that incentives reward the wrong behavior, and over time become toxic to the effective functioning of a safety and health program.
This article discusses how safety incentive programs are designed, the pros and cons of such programs, caveats regarding implementation, and recommendations for a path forward.
There are five critical steps for crafting an effective safety incentive program that must be addressed before implementing an incentive program in the field.
Structure the incentive program. Set goals, select rewards, and develop the administrative process. The goals are important because if set too high (such as an all-or-nothing approach), early failure will discourage participation; if too low, there is no effort required (thus, no change in actions) to gain the rewards. Goals must be clearly defined and easily measured.
Rewards should be tailored to fit the workforce. If not, it's unlikely the incentive program would motivate anyone. The rewards must have value to the workers, not management. The power of money is strong, however, many other things, such as gift certificates or time off, can be just as powerful (if not more so, under the right circumstances).
There are two additional aspects to consider when structuring an incentive program. First, workers must be required to take an active role in some elements of the program. A passive approach requires less worker involvement, resulting in a lack of required action and, hence, no change in behavior. Second, it is essential to determine how the program will be run and maintained. This final step involves determining how records will be maintained, the methods of performance measurement, reporting and monitoring, and the process by which rewards are provided. These elements must fit together and be viewed as fair by he workers or resentment may result.
Failure to establish proper guidelines and administer programs fairly is usually cited as the primary reason for incentive program failure. The larger (number of participants) and longer (in duration) the program, the more critical this step is. The importance of administration cannot be overemphasized. Workers will judge the program on how well and fairly it is administered. This is no simple task. Administering a safety incentive program is a complicated process that occurs just at the point enthusiasm is dimming and time is running out, often resulting in the administration process being thrown together in a haphazard manner.
Advocates of safety incentives believe use of a "carrot" encourages and promotes appropriate safe behavior. It is a way for companies to show they care for their employees and will recognize those who work safely. Long-term behavior can be changed by creating heightened safety awareness and providing financial rewards for proper behavior. The result can be improved morale and reduced workers compensation costs.
Proponents agree that to be effective, safety incentive programs must be properly developed, implemented, and maintained. Any failure of an incentive program to create the desired change in behavior is usually attributable to mistakes made in the implementation process. The most common failures are a loss of management commitment (leading to a breakdown in enthusiasm and eroding funding) or the improper administration (usually related to an over-burdened administration system struggling to cope with immense paperwork requirements).
Finally, those advocating incentive programs stick with them in the belief that such programs do no harm (even if they do not help), and that discontinuing them would create even more difficulties; safety incentives "are too woven into our culture."
A primary concern with incentive programs is that they are a form of bribery. As manipulative attempts at control, they are demotivators, creating significant motivation to "cook the books" (underreporting) than they do for changing actual in-the-field behavior. This minority holds that incentives are relied on for two primary reasons: (1) safety professionals do not really know how to reduce accidents so they have to resort to bribery, or (2) management wants feel good, and nothing accomplishes that faster than giving things away ("playing Santa Claus").
There are three primary reasons that undermine any benefit envisioned by safety incentive plans.
The primary concern of those who dispute the efficacy of safety incentives is the long-term toxic effect they can have on behavior within an organization. Employees, subcontractors, and contractors are quick to learn the rules and how to manipulate the system, to minimize the changes needed while maximizing their gains, at the expense of the sponsor.
Actual practices have shown that employees become disillusioned with incentive plans when they feel exploited because the expected rewards are not forthcoming. The criteria and performance evaluation must be seen as objective and within the performer's control. The recipient should consider the reward equal to the effort that produced it. Too insignificant, and the incentive will be insulting and ineffective; overdone, and the balance of fairness will be upset. Extensive human behavior research has shown that when people are led to think about what they will get for doing a task (the reward), they typically do it less well and/or lose interest in it.
Those against incentive programs believe that, at best, reward programs are difficult to establish and administer, and are fraught with pitfalls that can undermine the desired outcome. No matter how good the intentions of the program, an improperly administered program can have significant adverse impacts on performance. At worst, these type of programs reward the wrong kinds of behavior and distract management attention from other, high-value actions.
Many people firmly believe that improved safety performance is the product of an effect safety incentive program. Yet, when you examine individual programs in-depth (the author of this study studied more than 2 dozen contractor safety incentive programs), you find that incentives alone are not the reason for safety success. An effective safety management process is crucial to improved safety performance.
There simply is no direct correlation between efforts and returns. This is due to the fact that most programs have not been formally evaluated, examined. or measured. Effectiveness, in the few situations where it has been gauged, is generally based on anecdotal evidence.
Incentives are part of the traditional command-and-control paradigm. The primary basis for utilizing incentives is that everyone else is using them and they report improved performance. Thus, popularity, rather than documented evidence of impact, is the logic supporting decisions. Even research of best practices within the Construction Industry (conducted by the Construction Industry Institute, as part of its Zero Accident study) indicate that the inclusion of incentive programs among the top ten practices was based on popularity of use, not on demonstrated effectiveness. This creates a murky and confusing research base on which to base a decision affecting the economics of a substantial construction program.
The impact of rewards is very ambiguous. At best, incentives can be said to make people "feel" good; in the most likely case, they do no harm; and at worst, they are very damaging to long-term performance. Given the level of effort required to establish and properly execute a safety incentive program, and this high level of uncertainty regarding the return on investment (ROI), it makes more economic sense to dedicate resources toward those activities which have clear and unambiguous positive effects on safety performance. A safety incentive program should only be implemented when there are no remaining high-impact actions left to implement.
The following are some other safety-oriented activities that should be given priority:
On a short-term or individual-case basis, safety incentives may appear to influence outcomes, the intended consequences. However, over the long term, rewards have seldom demonstrated any significant influence in generating lasting behavioral changes. In addition, the unintended consequences and side effects provide incentive for the wrong behaviors and produce the wrong results.
The usual counter to this reality is that the program was improperly administered, and that another layer of complexity—refining the program more precisely—would address the negative results. Even those in support of these incentive programs recognize that if rewards do not possess reinforcing characteristics (an ability to influence future behaviors or actions), they cannot be effective. Over time, this method creates a large, complicated, and cumbersome process, where the administrative burden grows exponentially. The reality is that training programs have demonstrated a substantial, unequivocal impact on improving safety in the field, while incentive programs have not.
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