Page 44 - OHS, April 2021

INCENTIVES
Launching a Safety Incentive Program
Here’s how you can sidestep problems to ensure an effective program.
FBY BILL SIMS, JR.
or at least a century, safety incentive programs have often been misunderstood and misused. Many have delivered positive results, but some have produced unintended consequences.
Quite often, companies design their programs in reverse. They begin with the fun part—the “What will we give them?” question. Will it be gift cards, T-shirts, pizza parties or cash?
A more effective approach is to start with the “why” question, then the “how” question and finish up with the “what” question.
■ Why are you offering these awards? What are the critical behaviors?
■ How are you going to deliver your recognition program?
■ How are you going to communicate to employees the launch of a program and the reasons for it?
■ How are you going to ensure that it is equitable, that everyone receives positive consequences for achieving desired behavior change?
■ What type of incentive rewards are you going to offer?
From my thirty-year vantage point, the following are a few lessons I have learned.
Problem: Lack of Positive
Reinforcement Leadership Skills
Another question that should be considered: “How will we present the award?” Without training in positive reinforcement skills, even the best gifts can fall flat, doing more harm to the employee/leader relationship than good. Three examples of this are:
■ A company hit a designated safety milestone, triggering an incentive reward. One of the company supervisors was instructed to present the gift to workers and thank them for their achievement. Instead, he told one employee, “Here’s your toaster, now get back to work.” He damaged not only the perception of that employee, but also the other 800 people who heard the story by that afternoon.
■ A large railroad firm reached a targeted safety goal and sent leather jackets to employees by mail. One of those employees complained, “If my boss doesn’t care enough about me to present this gift to me in person, it isn’t worth much to me.” He promptly tossed his $200 jacket in the trash.
■ “I’ll never ever hand out another safety incentive for the rest of my life,” said the corporate safety director for a large railroad company. Why? Well, when the company hit their milestone, One employee won an expensive television and he was eternally grateful, but the other 699 employees got nothing from the exchange.
These scenarios play out again and again. A company sets a safety goal, achieves it, holds a drawing or raffle and selects a winner. When one person wins, everyone else loses. It’s true that prize drawing incentive programs are inexpensive (since only one person wins), but what we know from behavioral science is that the most powerful consequences are positive, immediate, and certain.
The most successful recognition strategies tick all the boxes from behavioral science. The reward is positive (as perceived by
40 Occupational Health & Safety | APRIL 2021
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the employee), immediate (occurs within ten seconds or less of the behavior) and certain (every time I repeat the behavior, I am certain something good will happen).
Solution:
Conduct the WIIFM Test
When an incentive program singles out one winner and punishes the rest of the workforce, it is doomed to fail. It fails the all-important WIIFM test: What’s in it for me? When the answer is nothing, when the incentive goes to only one employee, the effort to promote commitment to safety backfires. The unintended consequence: the workforce is less engaged in safety, attitude and morale sag, behaviors don’tchangeandapathyandresistancetosafetyeffortsincrease.
Problem: Tax Implications & Gift Card Woes
Another common mistake is failing to understand the tax implications of the incentive award, which can doom an incentive program to an untimely death and also damage morale.
For example, one company decided to give away an expensive Harley-Davidson motorcycle as the incentive for reaching a safety milestone. A raffle for the motorcycle would be held if employees worked six months without an injury. The goal was reached, the raffle was held and one employee rode away on his new Harley.
When the payroll department got wind of the award, they said, “Wait a minute, who’s paying the income tax on that $15,000 Harley?” The company docked the winning employee for the tax. Furious upon learning that he suddenly owed the government several thousand dollars, he filed a grievance with his union. Ultimately, the company paid the tax for him, which cost them $11,000 additional dollars for the “payroll gross up.”
Another company gave away one million dollars in Visa gift cards, only to learn that their income tax hit would be $992,000 through a payroll “gross up.” Even worse, later they found research from Kiplinger which states that 30 percent of gift cards are never redeemed by the employee.
Solution:
Do Your homework
Do thorough research and consider getting outside help to navigate around the potholes of unexpected tax implications and lack of gift card utilization.
Problem: Lagging Indicator Incentives
In the 1980s, the most common approaches by far were lagging indicator-based safety incentive programs. Simply put, the company rewards employees for going a period of time without any reports of injuries.
During the years Dr. David Michaels headed OSHA (2001- 2009), the agency went public with its position that lagging indicator incentive programs were often counter-productive. The agency argued that more likely than not, injuries were not reduced—they