Safety Incentive
Programs

Beware Of Dysfunction/
Destroy Old Myths

Wayne G. Pardy
January 1997

Beware Of Dysfunction

But some caution that you should be careful what you wish for in creating these incentive schemes. One of the most high profile cases of an incentive program gone bad took place in 1992 when Sears Auto Centres in California came under severe criticism for making unnecessary repairs to cars brought in by Sears customers. The Auto Centre reward system was based in part on the number of parts service managers sold. Supposedly, the service manager put pressure on the service mechanics to install parts which were not needed. The company was eventually charged with defrauding customers and, reportedly, the settlement by Sears was in the area of $15 million. Incentive programs can, as this example shows, result in some very powerful consequences, not necessarily positive. 27

There are any number of ingenious ways in which managers and employees can come up with to "save the record" or fix the numbers, none of them having anything to do with improving safety performance. Krause notes one of the reasons why 'incentive' awards should not be centred on injury rates is that this measure is too unreliable and subject to manipulation, thereby resulting, possibly, in dysfunction of your award program. Krause and others feel there are six very important reasons why accident data should not be used as the primary indicator of safety performance: This approach is reactive rather than proactive Random variability is misread As a consequence of random variability and its negative effect, management overreacts Safety incentives based on frequency rates amount to false feedback - you may actually be rewarding unsafe behaviours which, through luck, happen to result in a low frequency or severity rate. The emphasis on frequency rates encourages mere numbers management, not improvements in policies, procedures, training or behaviour expectations. The net result of the first five factors is an erosion of the credibility of the safety effort. 28

The focus, say those who support these views, should be on day-to-day activities, not simply yearly highlights which may have been achieved through luck. More specifically, those day-to-day activities can be narrowed down to measurable 'behaviours'. We now start to move into the realm of the behaviourists, and the behaviour modification approach to safety. In other words, behaviour modification forces management, supervisors and employees to focus in on specific areas that need improvement. With a behavioural approach to safety, the organisation: defines what types of behaviours are necessary for safe performance trains employees in safe behaviour establishes a system to observe proper behaviours uses positive reinforcement and feedback when an employee displays those behaviours

Destroy Old Myths

John Blogg feels one of the reasons why the traditional incentive and recognition programs became so popular was due in part to the lack of understanding of safety people on how those programs worked. Says Blogg,
"It came from a lack of understanding. I think it was opportunism on the part of some safety people years ago to try and get some credibility with the work force. I think management inability to relate health and safety to doing the job added to the credibility of the program." 29

Says Simoneau,

"Clearly the focus has to be changed from frequency and severity to something which is quality. They're fine if they're used to define exemplary performance. Something that's performance-based, where you have objectives that are clearly defined - things that are specific. They're not based on having no lost time accidents. They're based on pro-active activities, of things which everybody can work together to achieve." 30

The recent shift in thinking on how to structure a performance-based safety recognition or incentive program has been due in part to the relationship which some in the safety movement have made with the total quality management movement. Jargon such as "process", "measuring performance" and "continuous improvement" have become just as important a part of the modern safety vernacular as frequency and severity used to be. Yet the emphasis on what some are calling the "process" seems to be creating more opportunities to not only modify and influence safe behaviours, but to recognise them as well. It's been suggested that one of the strengths which a TQM approach has over a behavioural approach to safety is in the realisation that TQM, or whatever the 'buzzword' is for this improvement process, focuses on 'systematic' changes in attitude, which, in turn, result in changes in behaviour.

The quality approach has its focus on safety processes, including the safety systems developed by an organisation directed towards accident prevention. Some suggest a TQM approach to safety offers more long-lasting results, but behaviour modification gives quicker impact, especially with specific, observable problems. The strength in the quality or effectiveness approach is that it emphasises employee participation, uses internal controls that reinforce both attitude and behaviour change, and has the capacity to sustain systemic safety improvement. The weakness of behaviour modification, some suggest, is that it focuses on specific behaviours, which may cause a company to ignore the need for an emphasis of its safety management system. 31

John Blogg would like to see a more professional focus to the issue of safety incentive and recognition programs. Says Blogg, "I think what should happen, relative to rewards, is that they should be general rather than specific. In Ontario we have the NEER experience rating and there's an opportunity for rebates. I think if you make the supervisor and the people in charge have financial accountability for the compensation record, and give them a percentage of the rebate to share among their staff, that might be a way in which management people can ensure the policies and procedures are adhered to." 32

There's no question that the possible cost of implementing these programs may be a factor which is causing some to take a second look at how much of a return on investment they actually bring. Pat Watson of Fisher Gauge notes,

"Typical of companies today, they're cutting back to the point where they're cutting back in every area. You're cutting your spending. Companies are on a tight budget, and obviously these things cost money."

Obviously some programs cost more than others, depending on the maturity of the approach and how deep the pockets of the corporate coffers are. Yet some programs have been so extravagant that they border on the ridiculous. John Blogg makes reference to one major Canadian corporation which had a safety incentive budget of over $500,000.00. Says Blogg, "That was just for the incentive part of the program. It included trips, televisions, winter ski outfits. It was obscene." 33

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