Rewarding the Safety Process

March 1, 2000
"Nontraditional" incentive programs can improve safety -- without making OSHA nervous.

The power of incentives to affect behavior is at the core of the American Dream: the belief that hard work will be rewarded with material success. Yet, when it comes to safety, some incentive programs are loaded with controversy, while others appear to be building bridges between labor, management and OSHA.

Of course, the issue is not so much whether incentives affect behavior -- nearly everyone agrees that they do. The debate is about what kinds of incentives should be used and what sort of behavior is the result.

Traditional vs. Nontraditional Programs

The conflict burst onto the national stage two years ago when OSHA tried to stop Voluntary Protection Program (VPP) sites from using what it called "traditional" incentive programs. In a draft statement of policy, OSHA defined such programs as ones where employees are offered big monetary or merchandise rewards for reduced injury and illness rates.

OSHA argued that traditional programs were not cutting down on actual injuries and illnesses. Big cash rewards were only cutting down on the reporting of injuries and illnesses. According to the statement, the new policy was based on the fears of some agency stakeholders "that traditional incentive programs can provide an inducement for workers to underreport injuries and illnesses." Several safety experts said they believe the stakeholders in question are primarily national labor union representatives.

While the policy draft frowned on traditional programs, it smiled upon what it termed "nontraditional" programs. These efforts were described as follows: "Employees are awarded for attending safety meetings, demonstrating their safety and health knowledge or proficiency, identifying hazards, making suggestions for safety and health improvements at the workplace, or engaging in other safety and health-related efforts."

The difference between the two programs can be boiled down to one of results vs. process, according to safety consultant Marc Flanders, principal of WC Solutions Group of St. Louis. Traditional programs reward results. Nontraditional programs promote changes in the work and safety process by involving managers and rewarding worker participation in safety activities.

OSHA later backed away from the proposed policy of discouraging traditional programs after a tough letter from Lee Anne Elliott, executive director of the Voluntary Protection Program Participants' Association, accused the agency of "unfairly targeting the nation's safest worksites."

As if it were clearing up an unfortunate confusion that had arisen from some unknown quarter, OSHA later released a statement to "reaffirm the onsite practices for reviewing OSHA recordkeeping" at VPP sites. The focus of the onsite reviews, according to the statement, will remain what it has always been: the proper reporting of injuries and illnesses, not the design of a site's incentive program.

Cathy Oliver, OSHA's chief of voluntary programs, confirmed in an interview with Occupational Hazards that OSHA has no policy favoring any kind of incentive program. "If we go into a site," she said, "we wouldn't exclude them from the [VPP] program because they had a traditional program."

Oliver, like other safety experts, emphasized that no company should rely solely on any kind of incentive program to improve its safety and health program. At the same time, she praised incentive programs that appear to fit the nontraditional definition.

"Managers who are committed to safety and health in the workplace and meaningful employee involvement in a worksite safety and health program are the cornerstone of what has made VPP, or the VPP process, successful," Oliver said. "To the extent that incentive programs promote this commitment and promote employee involvement, that is a good thing."

The release of OSHA's proposed ergonomics standard has again stirred up the simmering dispute over incentive programs, according to safety consultant Tom Lawrence, principal of RRS Engineering. In an alert to the St. Louis Chapter of the American Society of Safety Engineers, Lawrence warned that paragraph "c" of Section 1910.912 in the proposal is a "Trojan horse" that will permit OSHA to intimidate employers who have traditional incentive programs.

Paragraph "c" is an answer to the question "What must I do to provide management leadership?" The paragraph states: "Examine your existing policies and practices to ensure that they encourage and do not discourage reporting and participation in the ergonomics program."

In Section 1910.912 of the preamble to the standard, OSHA discusses incentive programs, warning employers that traditional programs "may put considerable pressure" on workers not to report musculoskeletal disorders. Yet, the preamble also states that OSHA "is not prohibiting" the use of such programs and reaffirms the agency's policy of evaluating a company's recordkeeping system, not its incentive programs, during an inspection.

According to Flanders, the ergonomics preamble appears to be broadening the definition of traditional incentive programs by including in the category programs that offer financial rewards. "Now they are talking about the rewards as well as what is being rewarded," he said.

Whatever the outcome of all the wrangling, it is clear that OSHA has no problem with nontraditional incentive programs, and most safety experts believe such programs can be an important component of a company's safety effort.

Getting Started

Flanders and Oliver rejected a "one-size-fits-all" approach to designing a worksite's incentive program. "What really determines the type of incentive program you should have depends on your safety culture," Flanders said.

According to Flanders, a company with few lost-time injuries is going to benefit the most from a nontraditional incentive program.

Jackie Nowell, director of the Occupational Safety and Health Office at the United Food and Commercial Workers Union, agreed. "Incentive programs are not a way to transform a workplace," she said. "It can't be where you start."

The programs cannot work, Nowell argued, unless there is already trust between workers and managers. "Workers must trust that managers will not fire them for reporting unsafe conditions, for being a troublemaker or for slowing down the production," she said.

Flanders offers six tips on setting up a nontraditional incentive program:

  • Call it a reward and recognition program, not an incentive program.
  • Top management should lead in the structuring of the effort; however, employees should provide input on implementation and monitoring.
  • Clear objectives should be identified that reflect the safety culture of the worksite. Everyone should understand this is a process approach that promotes employee interest and awareness of safety.
  • The reward and recognition component should be designed with the same care as other components of the safety program.
  • Establish effective communications between management and employees to support a mutual commitment to the program.
  • Concentrate on consistent and timely administration of the program that meets the participants' expectations.

Several safety experts indicated that facilities already using a traditional incentive program should make a slow transition to a nontraditional program. An abrupt termination of large cash rewards for safety performance, for example, can hurt morale. In addition, if OSHA is correct, ending a traditional program may lead to an increase in reported injuries and illnesses.

One plant that made the switch from a traditional to a nontraditional program is Potlatch Corp.'s Consumer Products Division in Lewiston, Idaho. A VPP site, the facility made the transition over a three-year period starting in 1996.

Stephen Brown, a union safety representative at the plant and a 1999 winner of Occupational Hazards' Champions of Safety contest, said the impetus for the change came from management and employee members of the central safety committee. "We asked ourselves, 'How could we recognize people who were doing more than just putting in their time and not getting hurt, who were actually contributing to making this a safer mill?" he said.

During the transition, the rewards given to employees did not really change, but what they were rewarded for did. Before the change, anyone without a recordable injury or illness received a $50 bonus. More cash was awarded if the entire shift was injury-free. Brown agrees with OSHA's suspicions of traditional programs. "In my mind, it fosters nothing but underreporting," he said.

Nevertheless, when the Lewiston plant abandoned its traditional incentive program for a nontraditional one, the number of reported injuries declined.

The plant adopted a point-based system during the transition, awarding points for such things as membership on safety committees, doing a job safety analysis or performing hazardous housekeeping tours. At the end of the year, an accumulation of 500 points means a $50 gift certificate redeemable in local stores. In 1999, Brown said, an average of $70 to $80 was awarded to each worker.

Brown believes the program has been successful, and the numbers back him up. "If you have people in their own work areas keeping that area safe, and if you have that throughout the whole mill, then you have a safe mill," he said.

Recognizing Safe Behavior

There were 16,000 behavior-based safety observations last year at the International Paper plant in Mansfield, La. According to workers at the plant, this was the result of their nontraditional safety program.

Yet, Mansfield does not have an "incentive program," said Bob Church, the plant's safety manager.

"This is clearly different from an incentive program," he said, "because we concentrate on recognition, rather than relying purely on material incentives." The focus of the program is face-to-face positive reinforcement and peer interaction, rather than cash rewards.

The fact that workers at the plant are in charge of developing the rewards has been crucial to the program's success, Church said. "If they write it, they'll underwrite it," he said.

The emphasis on doing safety observations is an important component of the plant's safety program, but it is only one piece of the puzzle. The safety observations support the other parts of the safety management system. For example, the observations encourage workers to report close calls and fix hazards.

The plant made the switch to a nontraditional program more than 10 years ago. Because it still puts some value on numbers, employees described it as a mixed program. "We still use the numbers as a measuring stick toward our ultimate goal of an injury-free workplace," Church said. "However, the meat of our program is promoting the activities that will help us achieve these results." That means giving people the tools to work safely in their daily jobs, he added.

In a recent interview, employees, called "members," and managers at the nonunion VPP Star plant appeared most enthusiastic about employee involvement and management support that has resulted from their program.

"It had to do with recognizing the fact that, to create a safe work environment, you had to have the involvement of those working on the floor," Church said. "So it was a psychological change in management systems -- a shift to a more process-oriented approach."

Members of the plant agree. "When I realized that I had a say-so in the safety of the facility and management listened, yes, it made a big difference," said Randy Fair, an environmental, health and safety (EHS) coordinator in the finished products and shipping department. "I'm not afraid to report an injury if I have one, and I work safer because I know management will back me."

The plant started a "Thank-you for Working Safe" program last year, and it appears to have been quite successful in encouraging safe behavior.

"Traditionally, you only hear when things go wrong," said Jimmy Tiner, EHS coordinator in the utilities and quality assurance program. "In our system, you hear when things go right. We recognize safe behavior and give positive reinforcement."

Workers are informed ahead of time of the observations, and the observer is always familiar with the job being performed. If the job is being done safely, the member is given a "thank-you" card. Every month, each department holds a drawing of all the cards. The winner is awarded a parking space near the front gate.

The plant's members agree with Church that having the power to determine how people will be rewarded is important to them.

"We empower our people," Tiner said. "The recognition program is all created by the people who work here."

The committee has made some changes to the recognition program for 2000. There is a limit of four entries per month per worker. Some workers got so excited about the program that they were doing lots of observations and "stuffing" the box with their safety cards.

The goal for this year is to double the amount of observations. Also new this year is a change intended to encourage members to do observations. Henceforth, those doing observations will be awarded safety cards, making them eligible for the monthly drawing.

Although the Mansfield plant is no longer directly focused on numbers, the program appears to be achieving results. In 1999, the plant's total incident rate was the lowest it has ever been, down 50 percent from the previous year, according to John Perkins, safety captain in the primary products department.

Final Rewards

One payoff of programs like the one used in Mansfield may go beyond increased safety: The program can increase trust and cooperation between management and labor.

Management involvement in the program has helped convince workers that management is sincere when it says safety is more important than production. "We do have member involvement. We also have management support," Fair said. "So when they tell us to work safely, we know they mean it, that safety comes before production. It's been a growing process on the part of management."

Church believes the nontraditional program is helping workers at Mansfield internalize the values and practices of safety. "We think the idea of doing safety observations can develop its own momentum," he said. "What happens is that everyone in the mill realizes they can make a difference every day, and that begins to translate into everything they do."

About the Author

EHS Today Staff

EHS Today's editorial staff includes:

Dave Blanchard, Editor-in-Chief: During his career Dave has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. In addition, he serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Adrienne Selko, Senior Editor: In addition to her roles with EHS Today and the Safety Leadership Conference, Adrienne is also a senior editor at IndustryWeek and has written about many topics, with her current focus on workforce development strategies. She is also a senior editor at Material Handling & Logistics. Previously she was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck?, which made the Cleveland Plain Dealer's best sellers list.

Nicole Stempak, Managing Editor:  Nicole Stempak is managing editor of EHS Today and conference content manager of the Safety Leadership Conference.

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