Understanding and maximizing incentive programs

By: Ray Chishti

Publication: Employee Safety Management Today

Date Posted: 04/07/2020

Safety incentive programs

Incentive programs are common, but to provide a return on investment, they must serve a specific purpose, such as using commissions to encourage sales. Typically, employers implement incentive programs for one of these reasons:

  • Improve retention of existing employees,
  • Help recruit new employees, and/or
  • Motivate a desired behavior or outcome.

Safety incentive programs generally fall in the third category, with dual goals of increasing employee focus on safety and reducing unsafe conditions and behaviors. However, safety incentive programs can also increase employee retention.

Most employees want to feel valued by their employer and showing them that their safety is a value (and getting them more involved by soliciting their input) can help increase their engagement and desire to remain with the company. Essentially, the incentive program rewards their involvement and participation.

Showing appreciation for employees' efforts

Part of increasing involvement requires showing appreciation for employees’ efforts. Surveys of workers indicate that employees prefer a job they enjoy and where they feel appreciated, compared to a job that pays more, so not all incentives need to be financial. Employees always appreciate monetary rewards, of course, but money alone is not a good motivator. The cash delivery is mostly symbolic; it’s the tangible portion of the intangible appreciation.

For that reason, it’s generally better to pair a monetary reward with a strong showing of recognition and appreciation, even if the award is smaller. To illustrate, compare these two alternatives:

1. All employees could receive a $500 bonus at the end of the year if the company achieves a specified safety goal, such as staying under a determined DART rate.

2. Individual employees are given a $25 gift card on a discretionary basis whenever the supervisor sees them doing something correctly (from sanitizing PPE to reporting possible safety hazards).

In the first option, employees get a substantial reward, but only after a significant lag time from the desired activity. This lag time delays the reward and recognition for the behaviors you want to incentivize, and the bonus is often delivered via direct deposit, limiting the connection (in employee’s minds) between their efforts and the outcome. Simply put, a safety incentive program that launches at the start of the year and finishes with a bonus check won’t be as effective.

In the second scenario, the reward is immediate and tied to specific behaviors. Immediate rewards (minimal lag time) are usually more effective at showing recognition and appreciation. In addition, unless each employee gets 20 of the $25 gift cards every year (which is unlikely), the total cost of the program is less. This program requires an ongoing effort from supervisors, but the employer is likely to get more “bang for the buck.”

Determining goals for safety incentive programs

When creating a safety incentive program, set one or two primary goals, rather than trying to focus on everything at once. Also, plan to deliver rewards for positive outcomes, like wearing PPE when required or reporting hazards. Some employees view safety as “following the rules” with punishments for violations. The purpose of an incentive program is to encourage positive outcomes and drive those behaviors. As a safety manager, you know that safety is its own reward, and with an ongoing program, employees should begin to feel that way also.

Regarding costs, the primary consideration should be how effective the program would be a motivating (incentivizing) employees to focus more on safety. Once you’ve worked out that methodology, the company can evaluate which goal (or goals) are primary. Then, determine the resources available for devoting to the program.

Upper management all too often focuses on the potential costs of an incentive program, but once you’ve set an achievable goal and outlined the benefits, the company can decide how much they’re willing to pay for that outcome.

Key to remember: When setting up a safety incentive program, consider factors such as lag time between behaviors and awards, and personalizing the award to show appreciation. A program with a defined goal for a positive outcome should justify its own costs.

About the author
Ray Chishti - EH&S Editor

Ray is an editor at J. J. Keller & Associates, Inc. and has over 12 years of EH&S experience in a variety of industries, including EPC projects, fossil fuel power plants, gas distribution and transmission, and electrical transmission work.

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