Page 24 - Occupational Health & Safety, January 2018

INCENTIVES
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Occupational Health & Safety | JANUARY 2018
www.ohsonline.com
grams reward workers when no or low incidences of accidents or injuries are reported over a spe- cific period of time, and OSHA had supported such programs for many years. OSHA later changed course and began to cite indus- try experts’ opinions that workers might under report injuries or ac- cidents in order to receive a prom- ised reward for an accident-free workplace. This was a rule, which OSHA is allowed to promulgate, but Congress, which can overturn arbitrary agency rules, did just that in 2001.
In 2009, OSHA asked the Gov- ernment Accountability Office to study the issue of accident and injury reporting, and in its 2010 report, the GAO stated, “Little re- search exists on the effect of work- place safety incentive programs and other workplace safety poli- cies on workers’ reporting of in- juries and illnesses.” In the GAO’s research review, they discovered that “researchers distinguish be- tween rate-based safety incentive programs, which reward workers for achieving low rates of reported injuries or illnesses, and behavior- based programs, which reward workers for certain behaviors, such as recommending safety improve- ments. Of the six studies GAO identified that assessed the effect of safety incentive programs, two analyzed the potential effect on workers’ reporting of injuries or illnesses, but they concluded that there was no relationship between the programs and injury and illness reporting.” (Emphasis added)
Nonetheless, the GAO and, lat- er, OSHA, concluded that “experts and industry officials, however, suggest that rate-based programs may discourage reporting of inju- ries and illnesses. Experts and in- dustry officials also reported that certain workplace polices, such as post-incident drug and alcohol testing, may discourage workers from reporting injuries and ill- nesses. Researchers and workplace safety experts also noted that how
safety is managed in the workplace, including employer practices such as fostering open communication about safety issues, may encourage reporting of injuries and illnesses.”
OH&S: Okay, so we understand that OSHA does not recommend “outcome- based” incentive programs. Still, you mentioned that the rule affecting that was overturned by Congress in 2001. Why is that a concern now?
Roark: Here’s my opinion: Because the folks at OSHA, like many other clever folks who deal with Congress, have noticed some lack of cooperation and coordination with- in the two houses that makes the passage of even a simple bipartisan resolution a chal- lenge. Taking advantage of that, or perhaps by simple coincidence, OSHA re-intro- duced a “guideline” as part of their “Safety and Health Program Guidelines,” which went into effect [in December 2016]. This particular guideline states, in summary, that any outcome-based incentive criteria constitutes a rule violation. In implement- ing this guideline, they engineered a shift in perception and legal presumption. Previ- ously, a company that thought its incentive program was fair could assert that, and it was up to OSHA to prove that the company was wrong and the program was not fair. OSHA could not meet this legal standard in many cases where a well-designed program clearly emphasized the need to properly report and penalized any participant who failed to meet that requirement.
Now, OSHA has set a guideline which essentially stipulates that any outcome- based award is presumed to be a violation, and the burden of proving it is not shifts to the company. It has had a serious damp- ening effect on safety incentive programs, to the point that many managers who do not recognize the spectacular efficacy and integrity of a well-designed safety incen- tive program have either severely cut back or completely discontinued safety incen- tive programs.
OH&S: Will following this guideline be ef- fective in keeping compliant companies out of trouble?
Roark: With OSHA, perhaps. The cost to the employer may be hard to measure, but will be there. In the end, a poorly de- signed incentive program is almost always
better than no program. About a third of the time it’s worse, but let’s stay on track with the fact that a well-designed incen- tive program produces way better results than a poorly designed one. Finally, a well- researched incentive program that custom- fits the needs of the client and maximizes the engagement of the participants can save lives and actually improve the bottom line of the offering company, through a su- perior ROI. So, if you accept the premise that outcome-based awards are an incred- ibly effective engagement tool, then you have to downgrade the program that is of- fered which specifically excludes that tool to good or fair, which using the yardstick I laid out above, will have a cost in ROI, employee health, and morale—and, regret- tably but statistically almost certainly, lives. This conclusion is in direct contradiction to OSHA’s mission.
OH&S: Why are some companies continu- ing to include outcome-based awards in their programs?
Roark: I’d start with my previous an- swer. Some economists recognize it will generate more value in ROI than is at risk by offending OSHA. Ethicists will take a high ground that if a company genuinely wants its employees to be safe, then it will employ the most effective and proven means to achieve that goal. Folks who fol- low this sort of thing at a high level will of- fer outcome-based awards because they be- lieve that time is on their side. Those people think that OSHA has exceeded its authority in even promulgating the guideline and that the faulty logic will not stand up when it is ultimately challenged in court.
OH&S: Why hasn’t it been challenged already?
Roark: Now there’s an interesting ques- tion. I don’t have access to “inside OSHA’s head” but have been told by some very re- liable folks whose past observations have ended up to be validated that there is an actual OSHA procedural directive to their regional offices to not cite this rule unless it is a clearly indefensible case, preferably in- cluding either a loss of life or serious injury. If this is true, then OSHA senior policy staff recognizes that the chilling effect of the un- tested rule is going to effectively discourage result-based criteria (which we have estab- lished they are not fond of), and the great-