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Safety Incentives: It's Not Just a Breakfast Anymore

Coffee and donuts are giving way to increasingly creative ways to motivate and reward employees for their safety and environmental management efforts.

Imagine watching your co-worker parade down a catwalk to the tune of "I'm Too Sexy." He's wearing safety glasses, a faceshield, gloves, steel-toed shoes, hearing protection, chemical protective garments and an apron, and strutting his stuff like a supermodel.

Amidst the laughter and fun, valuable lessons about proper personal protective equipment (PPE) are being taught and remembered.

"That was a hoot," says Theresa Childers of the PPE fashion show she staged at International Paper's Liquid Packaging Division in Plant City, Fla. "We made a list of the different tasks that required additional PPE than what we wear every day, which is steel-toed shoes, safety glasses and ear protection, and then dressed up the operators and crew leaders in the PPE for each task. Everybody laughed, and no one was sleeping during that safety meeting."

Childers, EHS coordinator at the facility, works hard to keep the safety program fresh at the Plant City location, which employs 230 management and hourly employees who manufacture juice and dairy cartons. At that location, which is a participant in OSHA's Voluntary Protection Program, rewards, recognition and fun are added to the foundation created by a strong safety program.

Childers' plan is a good one, say incentive experts. Incentives - rewards and recognition used to motivate employees - have been used for years to spark interest in safety. A recent trend finds more companies moving away from "rewarding" employees based on accident and injury statistics - for example, giving everyone a $20 gift certificate if the facility goes a month without a lost-time accident or awarding a truck to one lucky employee if no lost-time accidents are reported in a year - and utilizing new, innovative ways to recognize employees.

"It is easier to reward employees for 90 days working without a lost-time accident than to measure what employees did to support or improve safety," admits Bill Sims Jr., president of the Bill Sims Co. Inc., a Columbia, S.C.-based awards and incentives company. "But companies that develop recognition programs that are behavior-based - 'What did you do to make safety happen?' - are encouraging a proactive approach to safety."

Sims says his customers are using incentives not only to support traditional safety goals, like reduced injuries, but also to boost participation in wellness programs, promote suggestion programs, reduce absenteeism and turnover, eliminate waste and encourage attendance at safety meetings.

Do Incentives Work?

Safety professionals have argued over the value of incentives and incentive programs for years. Some say incentive programs encourage employees to hide injuries, while others contend that acknowledging milestones in the safety program or employee safety efforts is an excellent motivational tool.

According to the results of a study conducted by the Society of Incentive and Travel Executives (SITE) Foundation, the answer to the question "Do incentives work?" is a resounding "yes." The study, released last fall, is the most comprehensive examination ever undertaken of the $27 billion incentive industry. One of the key findings revealed that only 8 percent of the workers surveyed would have achieved their goals without an incentive program.

"The report ... cuts through the conflicts and controversies and shows that ... tangible incentives increase work performance by an average of 22 percent," claims Mike Hadlow, chairman of the research committee for the SITE Foundation. Hadlow is also president of USMotivation in Atlanta. "No CEO in the world can afford to ignore [the study]. Incentive programs are more powerful than we speculated."

Hadlow adds that "the role emotion plays in the workplace greatly influences commitment to a work task and can be positively redirected." Other interesting findings:

  • Incentive programs aimed at individual workers increase performance by 27 percent.
  • Programs aimed at teams increase performance by 45 percent.
  • Incentive programs have an equal, positive impact on quality and quantity goals.
  • Incentive programs structured with employee input work best; however, only 23 percent of incentive systems were selected with employee input.
  • Long-term incentives are more powerful than short-term (44 percent gain vs. 20 percent gain).

Buck Peavey, president of Peavey Performance Systems, Lenexa, Kan., notes, "In theory, we shouldn't have to have incentive programs to motivate people to work safely. In reality, rewards and recognition will boost safe behavior and motivate people."

Employers such as Marriott Hotels, Frito Lay, Hamilton Beach, Kraft Foods, Exxon and the U.S. Postal Service have motivated employees by using Peavey's Safety Jackpot program, which features scratch-off game cards that employees use to collect points they can redeem for prizes. He cites a number of testimonials to prove that motivational programs, when handled correctly, work. One example: A major Department of Defense contractor decreased accidents by more than 55 percent for a savings of $1.6 million annually.

Employers determine why and how the cards are distributed. Some use them to reward employees for attending safety meetings or for turning in suggestions to improve safety or housekeeping, Peavey says. Others pass them out for days worked without lost-time accidents or perfect scores on safety audits.

Safety First

Although their programs differ in size and scope, all the incentive experts we talked to agreed on one thing: Before you have an incentive program, you have to have a good safety program.

"We tell people who don't have a good safety program, or who think an incentive program will improve, rather than enhance, their safety program, 'You're buying gas for a car that doesn't run,'" says Seth Marshall, president of Safety Pays Inc., Cashiers, N.C., which offers a bingo-type game that allows employees to participate in cash awards.

"The recipe for an accident-free workplace is a good safety program that includes workplace audits, management support, proper training and the correct personal protective equipment, and has a motivational element," he adds. "The point of motivational programs is to make the work force pay attention to the safety infrastructure."

Safety is a corporatewide value at International Paper, which helps explain why the motivational programs at Plant City are so successful: They're the icing on the cake, rather than the cake itself.

Employees participate in a "gainsharing," or profit-sharing, program at the facility. They earn a monetary bonus for certain activities related to quality, production, environmental management, waste reduction and safety.

Each month, employees are expected to conduct four safety observations of their co-workers. Two of the observations are general, related to workplace conditions, and include some 30 items that must be inspected. The other two observations, which have about 10 items, are task-specific. A sample question might be, "Did the operator change the blankets on the press?"

If an employee conducts his or her four observations each month, he or she receives an additional 5 percent toward the gainsharing amount. If everyone at the facility conducts their four observations, all employees receive another 5 percent. "If one guy doesn't do them ... well, there's a lot of peer pressure. We've never had a repeat of someone forgetting, let's just put it that way," Childers says.

Results of the safety observations are entered into a database and are shared with employees at their bimonthly team meetings. Crew chiefs use the results to reinforce the importance of safety-related tasks. If work orders result from the observations, a member of the safe behavior steering team double-checks to ensure the work is done and the area is made safe.

Rewarding Environment

Incentives aren't just a way to motivate safe behavior. Cathy Atkinson used incentives at West Valley Nuclear Services, West Valley, N.Y., to get employees fired up about the company's environmental management efforts.

As an environmental remediation contractor for the Department of Energy, the company was under a presidential mandate to promote pollution prevention through energy conservation, waste stream reduction and the purchase of recycled products. Atkinson, who recently left the company but at the time was administrator of the Pollution Prevention Program, came up with the idea of using incentives to spice up an employee suggestion program.

Employees received points for coming up with a pollution prevention idea, more points for developing a plan to implement the idea and additional points for doing the implementation. A small committee made up of employees from all areas of the company - secretaries, engineers, hourly employees and management - evaluated the suggestions. Often, employees were invited to the committee meetings to discuss their ideas.

"Our motivation program was extremely successful," Atkinson says, "and the payback was substantial."

"Astounding" might be a better word than "substantial." In the 18-month period between October 2000 and February 2002, employee suggestions helped West Valley save $2.2 million. "One idea suggested saving energy by turning out the lights," Atkinson remembers. "The electricians went through the facility and installed timers on the light switches. We saved $20,000 to $30,000."

Atkinson says that of the 185 ideas submitted, the company implemented more than 80 of them. Other submissions included using recycled copy paper, buying "green" software and suggesting ways to limit water usage. "It didn't matter if the idea saved the company $50 or $1 million, and we had a couple of those," she says. "We wanted to let all the employees know that we valued their ideas, and we wanted to do it in a way that their families could enjoy."

Employees were able to use the points they earned to "buy" products such as gas grills, coolers and sporting equipment out of a catalog. Every quarter featured a drawing for a grand prize, such as a cruise or other type of trip.

Atkinson says the key to the success of the West Valley program was to make the goals very clear to employees. "You have to define what success means to you, why you are trying to sell this particular program and what results you want," she says.

The company held big kickoff events and publicized the program through posters, meetings and newsletters. "We made it fun," she says. "Employees were skeptical at first, but then some people started to participate, and we really talked up the successes. For a program like this to succeed, you need to tell people when they're doing great things."

Incentives at International Paper

At International Paper's Plant City location, Childers is working on a new safety incentive program that recognizes team performance utilizing injury and illness rates - "We'll never get away from that," Childers says - but it's only about 20 percent of the whole program. Structured like a horse race, teams will "race" each other for points, and prizes will be awarded for first, second and third places.

The other part of the program is related to safe behavior and features team-based awards. It probably will award teams points for 100 percent attendance at bimonthly safety meetings and give points to divisions that have 100 percent compliance for training for the quarter.

Childers also plans to reward employees on an individual basis for completing a variety of safety-related tasks. She hopes to change the list of rewarded tasks monthly to keep it interesting for employees. For example, employees will be awarded points if they offer safety tips for a safety topic of the month, complete a quiz or crossword puzzle using safety-related words, mentor new employees, participate in safety meetings, conduct safety audits or participate on a safety committee.

The incentive program will include quarterly grand prizes, "probably a cruise," according to Childers, who still is working out the details. "I can't tell you how much we're going to spend on it, but it's substantial. The rewards are worth it."

Cost of Programs

Peavey estimates that for companies to break even on effective incentive programs, which generally are not cheap, they must see an 8 percent to 10 percent reduction in workers' compensation claims.

"Every safety manager needs to think about that, their break-even point," he says, "because everyone sitting behind the CEO's desk or the plant manager's desk is looking at one thing - the cost of the program."

Peavey says that while many incentive programs are quite effective at motivating employees to work in a safe manner, thereby reducing injuries and workers' compensation costs, he's seen almost immediate reductions in workers' compensation claims of more than 50 percent in some cases. "That indicates one thing," he says, "that a lot of accidents are truly fraud."

While some would argue that it doesn't indicate fraud so much as employees hiding injuries, Peavey disagrees. "You can't hide fatalities," he says. "You can't hide serious injuries. Nonreported injuries are probably minor injuries. If you handle the program well, you'll reduce injuries without encouraging employees to hide them."

Sims says he encourages his customers to base their programs on something other than injury and illness reporting or statistics. Programs based only on numbers "can damage the safety culture," he believes. "What you're saying is, 'We don't care if you conduct safety meetings or audits or remediate problems, all we care is that there isn't an injury reported during the quarter.' That's not an effective program."

The Value of a "Thank You"

While incentive programs at some companies cost hundreds of thousands of dollars and feature expensive awards like cruises and cars and large gift certificates or monetary rewards, an employer doesn't always have to spend big bucks to get good results. Never underestimate the value of a simple "thank you" and public acknowledgment of a job well-done.

Sims remembers a conversation he had with the manager of a large transportation company who told him about a retirement dinner they held for a driver who worked for the company for 25 years. They gave the driver a certificate and a nice watch.

The next day, his wife called the manager, and she was very upset. She asked if he knew how many years her husband had driven his truck without an accident. "I was embarrassed to admit that I didn't know," the manager told Sims. "She then told me how disappointed she was that we failed to mention her husband drove 25 years perfectly, without a single accident or injury."

All the driver wanted was an acknowledgment of his accomplishment. "I felt terrible," the manager told Sims. "What could I say?"

While there are dangers to poorly designed incentive programs, this story illustrates that employees appreciate an acknowledgment of their efforts by their employers. Well-designed and well-structured incentive programs can motivate and educate employees and, most importantly, thank them for a job well-done.

Sidebar: The Pitfalls of Incentive Programs

Bill Sims warns any safety director who's thinking of starting an incentive program to remember four common pitfalls, calling them "the iceberg that sinks the Titanic":

Employee Taxes. Employees must pay taxes on incentives that are awarded to them, or the company must pay it for them. In one case, a South Carolina life insurance company awarded employees $65,000 worth of $5 and $10 gift certificates, assuming they wouldn't be taxed because it wasn't cash. Wrong, said the Internal Revenue Service, which declared that the gift certificates are disguised compensation. The company picked up the tab for the interest, penalties and legal fees to the tune of an additional $180,000.

Sims says one of his customers rewarded employees with $100,000 in gift certificates, only to learn about the income tax issue. So the company picked up the tax tab, which was an additional $90,000. Talk to your incentive providers and find out how to set up tax-free programs, he suggests, otherwise the cost of the program to your company could likely double.

Hidden Injuries. Injury hiding causes trouble with the Occupational Safety and Health Administration and is one reason the agency appears to frown on incentive programs based around injury and illness statistics. Injury hiding also masks underlying problems with the safety program, Sims says.

"Develop recognition programs that are behavior-based if you want to avoid injury hiding," he suggests. "Base the program on what employees did to make safety happen."

"Unfair" Programs. Use a consistent, well-thought-out approach that encourages all employees to be winners through such activities as attending safety meetings, answering safety quizzes, conducting audits and participating in training. When a program is based on a concept such as a year without a lost-time accident, the program and employee morale go down the tubes when an accident occurs in April and the program is over before it really got started, Sims says. Employees perceive the program as unfair and become resentful.

Insufficient Budget. Sims says the average amount per employee per year should be somewhere in the $100 range. "Can you really expect to change behavior by spending $2 per person per year? I don't think so," Sims says.

If interested in finding out more about safety incentive programs, contact Buck Peavey of Peavey Performance Systems at (800) 235-2495, Bill Sims Jr. of the Bill Sims Co. Inc. at (800) 690-1860 and Seth Marshall of Safety Pays Inc. at (800) 942-1022. The Society of Incentive and Travel Executives can be reached at (212) 575-0910.

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