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In Defense of Safety Incentive Programs

Dec. 10, 2012
A safety professional and VPP site manager examines the recent controversy surrounding safety incentive programs and defends such programs as they exist in VPP worksites.

Many VPP companies have been using some type of incentive or recognition program to reward employees when certain safety goals or milestones are achieved for many years. Now, OSHA suddenly seems to have a problem with this practice. But is there really a problem with the approach of engaging employees in safety and health by offering incentives, especially in VPP sites?

In 2009, the General Accounting Office (GAO) prepared a report on injury and illness recordkeeping that revealed employers were not accurately reporting and recording injuries/illnesses. However, the report did not directly address the effect of incentive programs and their possible relationship in the underreporting of injuries and illnesses.

OSHA’s response to the GAO report was to implement a National Emphasis Program (NEP) on recordkeeping. The NEP did not target incentive programs, but OSHA reviewed them as part of the inspection. The results were not surprising: One-third of the sites inspected had an incentive program tied to injury/illness performance.

OSHA’s Position on Incentives, VPP

OSHA VPP teams have been evaluating incentive programs for many years. The VPP Policies and Procedures Manual provide guidance to the on site evaluation teams:

“The review of incentive programs must focus on ensuring that any incentive programs in operation are not based solely on providing awards to employees for the reduction or absence of safety or health incidents. Instead, these programs should be innovative, positive, and promote safety awareness and employee participation in safety-related activities. The onsite evaluation will focus on the incentive program’s potential impact on the accuracy of reporting, injury and illnesses data.”

Dr. David Michaels, assistant secretary of labor for OSHA, expressed OSHA’s current stand on incentive programs at the VPPPA National Conference in Orlando, Fla., on August 23, 2010: “We disapprove of programs where managers receive large bonuses for driving down their DART rate. We have found that incentive programs based primarily on injury and illness numbers often have the effect of discouraging workers from reporting an injury or illness. We cannot tolerate programs that provide this kind of negative reinforcement.”

Subsequently, on June 29, 2011, OSHA issued revised VPP Policy Memorandum #5, which addressed how VPP applicants or approved site’s incentive programs would be evaluated. Programs that promote injury and illness reporting and employee involvement are encouraged and acceptable. Incentive programs that focus on injury/illness numbers are discouraged. The policy further states that existing VPP sites will not be reapproved if they have a numbers-driven incentive program; VPP applications will not be accepted if they have a numbers-driven incentive program. In either case, an incentive program can be changed to meet OSHA’s guidelines and allow a site to proceed through the application or re-approval process.

The Reality of Incentives

Recognition of good performance is a key element in an effective safety and health management system. This fact is recognized in the VPP Policies and Procedures Manual, as onsite evaluation teams were tasked with evaluating these programs to ensure they are effective.

So what is the problem? I’m not so sure. What is the danger in allowing a group of hourly employees to celebrate working a month without a recordable injury with a pizza lunch? The reality is there is no problem. What is the likelihood that an employee who suffers an OSHA recordable injury, such as a laceration requiring stitches, will not report it in fear of losing their pizza lunch? The reality of that happening is not very likely. What is the danger of including safety and health performance in a salaried bonus program, in which safety and health accounts for 5 percent of the total potential bonus award? The reality is there is no problem. What purpose is served by having an entire performance bonus system deemed inappropriate because a very small percentage is allocated to injury/illness performance? What is the likelihood that an employee that suffers an OSHA recordable injury, such as a fracture, will not report it in order for their boss to keep their small bonus? Again, I think the reality is that this is not very likely.

As a former OSHA Special Government Employee who has conducted over 40 VPP on site evaluations, I have not seen an incentive/recognition program that had awards of excessive value. I have conducted hundreds of employee interviews of both labor and management, and have never found a case where an employee felt influenced to not report an injury in fear of losing an incentive or recognition award. In fact, the interviews revealed, in the true spirit of VPP, there was no fear of coercion, intimidation or peer pressure to not report an injury. That is the culture of VPP worksites – do the right thing every day!

As a small business owner of a VPP Star Worksite, safety and health is a core value to my organization. As such, all of my employees are expected to demonstrate the highest level of commitment to our safety and health process. Part of that demonstration is to ensure we have conducted the appropriate analyses and implemented the necessary systems to eliminate occupational injuries and illnesses.

Excellent safety and health performance is important not only to me, my employees and our business, but to our clients as well. As the president of the company, it is my responsibility to measure all business related performance indices and hold employees accountable for their performance. Injury and illness performance is just one of many key performance indicators I measure.

Why is it acceptable to OSHA for me to recognize and reward good performance in areas such as productivity, quality, professional development and attendance but not safety and health? I think OSHA’s answer is somewhat anecdotal, something that has taken on a life of its own and become urban legend. Are there really companies that award pickup trucks to employees for not suffering an occupational injury or illness? I think not.

Small tokens can be effective in helping to recognize good performance. Sometimes, the smaller awards (such as the pizza lunch) are the ones that have the biggest impact. I’m sure many of us remember that gold star we received on our homework assignment back in grammar school, even after all these years. Although small in monetary value, it had a long lasting impact as we tried even harder on our next assignment as we wanted more recognition, another gold star.

A Path Forward

Is it really harmful to employees if injury and illness performance is included as a small part of an overall comprehensive employee incentive/recognition or bonus program that includes other proactive criteria such as participation in safety committees/work teams, conducting inspections or helping to develop job safety analysis? I don’t think so.

VPP worksites are leaders in safety and health – the best of the best in their particular industry. VPP worksites want to do the right thing, and are proud of being designated a VPP site. I find it hard to believe they would jeopardize their VPP status by encouraging their employees to not report an injury or illness. If one were to dig a little deeper, the facts about recognition/incentive programs at VPP sites are quite the contrary – many worksites recognize and reward employees for reporting near misses, minor injuries and accidents.

Is it possible there is a rogue company out there somewhere that would have a recognition or incentive award of such high value that an employee might feel pressured not to report an injury or illness? I guess it is possible. But should all VPP worksites be treated disproportionately in case this rogue workplace actually exists? I think not.

An effective overall comprehensive incentive/recognition or bonus program should include injury and illness performance as well other lagging indicators and proactive measurements. They key considerations are to ensure that the injury/illness component of the incentive/recognition or bonus program is not the primary measurement and does not have an award of significant monetary value so as to send the wrong and conflicting message to employees. I think most would agree that a pizza lunch, coffee mug, or t-shirt is examples of acceptable awards that  have minimal monetary value.

The best solution is for OSHA to continue with their past practice – let VPP companies continue to award incentives/recognition and bonuses to their employees in appreciation of excellent safety and health performance. Let the VPP onsite evaluation teams do what they have always done – review the programs to ensure they are reasonable and listen to what employees have to say during the interviews. If there is a problem, then it can be resolved by the evaluation team through a recommendation, 90-day item or Merit goal on a case-by-case basis in the VPP report.

Let’s not take a step backwards. A properly designed and implemented incentive/recognition or bonus program can help reduce injuries and illnesses, foster increased employee involvement, and improve the overall safety and health management system.

This article was originally published in a slightly different form in VPPPA's The Leader Magazine, Autumn 2012 Volume 21 Issue 4, under the title, “Safety Incentives – Is There Really a Problem?”

About the author: Brian Bennett, Ph.D., CSP, CHMM, has worked as a safety and health professional for 28 years. Currently, he serves as the president of EHS Excellence Consulting LLC, a full service safety and health consulting company, which is a VPP Star Worksite. He has been involved with the VPP since 1990 and has managed VPP sites at the facility and corporate level. Bennett was a Special Government Employee from 1996-2009, and served on over 40 VPP on site evaluations. He was the first non-government VPP Team Leader, having conducted the VPP on site evaluation for OSHA’s Appleton, Wis., and Milwaukee Area Offices. He was an SGE Instructor, and has been a workshop presenter at every National and Region 2 VPPPA Conference since 1995. Bennett won the VPPPA Mentoring Award in 1995, the VPPPA Outreach Award in 2001 and 2006, the Region 2 SGE of the Year Award in 2004 and 2007, the National SGE of the Year Award in 2006, and OSHA’s Outstanding Service Award in 2006. He has served on the Board of Directors of the VPPPA Region 2 Chapter since 1999, and was Chairman of the Board of Directors from 2002-2010. Brian is the co-author of the textbook, Preparing for OSHA’s Voluntary Protection Programs: A Guide to Success published by John Wiley & Sons in 2010.

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