OSH Assignment-12-15 Hours

Chapter 12

Reinforcing Strategic Safety Measures with Incentives, Rewards & Recognition Safety Wisdom: Reinforcement is a procedure using consequences to increase behavior; If the target behavior does not increase in frequency, intensity, or duration, the procedure was not reinforcement and the consequence was not a reinforcer. E. Scott Geller Using performance measures as the basis for providing positive, encouraging feedback will do more to boost morale and orient an organization toward improving performance and excellence than anything else. Will Kaydos Organizations commonly use incentives and rewards in an effort to enhance the effectiveness of their safety measures. This chapter explores the research, expertise and experience on this topic. An overview includes:

• Distinctions among recognition, rewards and incentives and when to use them; • The reinforcement strategies that are considered to be the most powerful for

impacting safety performance; • Common issues with rewards and incentives; • Guidelines for making reward and recognition programs effective; • Strategies for maximizing individual and team recognition; and • Developing safety metrics that motivate and reinforce performance.

Introduction An element of controversy surrounds the topic of rewards for safety, especially regarding incentive programs. Psychologists who have become involved in the area of safety vary greatly in their opinions about the effectiveness of safety incentive programs and safety rewards in general. Alfie Kohn wrote Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A’s, Praise, and Other Bribes and insists that motivation and incentives come from intrinsic sources, and that external rewards defeat the purpose of motivation. The book review states:

The basic strategy we use for raising children, teaching students, and managing workers can be summarized in six words: Do this and you’ll get that. We dangle goodies (from candy bars to sales commissions) in front of people in much the same way we train the family pet. Drawing on a wealth of psychological research Alfie Kohn points the way to a more successful strategy based on working with people instead of doing things to them. “Do rewards motivate people?” asks Kohn. “Yes. They motivate people to get rewards.”

Whether safety professionals agree with Mr. Kohn or not, other psychologists who concern themselves with safety appear to extend from one end of the spectrum to the other when it comes to the issue of safety rewards. Aubrey Daniels claims it doesn’t matter what some psychologists or people claim about incentives, these are only opinions. He states the empirical research and common experience in industry demonstrates that incentives do work – but the caveat is in how they are designed and implemented. The astute safety professional could read the works of various prominent psychologists who have delved into the safety field and discover they range from believing that no incentives should ever be offered under any circumstances, to espousing that rewards and incentives are highly desirable; the more the merrier. Other psychologists are more in the middle of the spectrum, and similar to the platitude expressed by Aubrey Daniels, believe that incentives can be effective. He cautions, however, that an organization must carefully consider the ramifications and potential side effects of implementing safety incentives prior to embarking on that journey. What are Incentives? In general, the term incentive involves some kind of award or reward, often including a variety of tangible items. Incentives are typically designed to encourage or influence people to do something they would otherwise be unlikely to do without the award. There is an aspect of incentives that can be unsavory. There are a number of derisive terms for incentives including bribery, gimmicks, and dangling a carrot. At the core of incentives is an “If/Then” understanding. If employees will take certain behaviors or have a specific accomplishment, then they will be rewarded for the improvement or achievement. So perhaps the main purpose of incentives is to incite employees to do better; such as improve the quality of a job they already do. What are Some Basic Ways to Incent Behavior? There is a difference between a reward and an incentive. Rewards may be given for performance and achievements even if the recipients had no idea they would be rewarded. Incentives, as noted, include the element of If/Then: If an employee

performs a specific behavior or makes a certain achievement, Then the employee will be rewarded. So the incentive pre-dates or is a precursor to the reward, and may influence individual behavior. Some of the basic methods to incentivize behavior include:

• Rewards – A reward is a tangible item of value that is intended to influence behavior in a particular direction.

• Recognition – Recognition is a symbolic way of showing appreciation for some accomplishment and includes items such as plaques, trophies or letters of commendation. Recognition may be provided in a group setting or given privately.

• Feedback – Feedback is information about behavior that allows the performer to change specific behavior.

What Incentives Are Not Most safety professionals recognize the limitations of safety incentives, but organizations still insist on relying upon incentives in the wrong way. Here are some explicit precautions about safety incentives that are likely widely recognized. 1. Safety incentives are not a replacement for a proactive safety process. There may be a place for safety incentives under certain circumstances, however, they should never be a replacement for a solid safety management system. At most, they should be used in an effort to enhance the safety management system; kind of like icing on the cake. But again, incentives are not the safety program. 2. Safety incentives are not a panacea to cure all problems in the safety effort. Incentives are not substantive solutions compared to actual efforts that organizations may take to reduce hazards and risks. The substantial solutions include those categories espoused in the Safety Hierarchy of Controls such as engineering controls, substitution of less hazardous materials, guarding, administrative controls, etc. Perhaps incentives fit in the category of a low-level administrative control – or an administrative motivation tool. 3. Safety incentives are not a quick fix for safety culture. It is possible that incentives could influence certain actions and habits that impact safety culture, but often the impact of safety incentives is short lived and become extinct once the incentive program is no longer in place.

Incentives are not substantive solutions compared to actual efforts that organizations may take to reduce hazards and risks.

Why do Organizations Implement Safety Incentive Programs? There are 3 basic reasons organizations implement Safety Incentive Programs according to research conducted by Goodrum and Gangwar in the construction industry and published in the Professional Safety Journal in 2004. They sampled 165 companies in 14 states for their study. The top 3 reasons organizations implement safety incentive programs from their research: 1. To change workers’ (safety related) behavior; 2. To improve workers’ awareness of safety; and 3. To reduce recordable injuries. One of Goodrum and Gangwar’s main conclusions is that a safety incentive program should not exist by itself. Rather, it should be part of an overall comprehensive SH&E program involving workforce training and integration of safety into the work process. Incentive Programs are a Form of Safety Intervention: an Effort to Influence Positive Changes Incentive programs are a form of safety intervention. As such, their function is to supplement a solid safety process rather than replacing it. As an intervention, incentives may or may not be effective depending on their design and implementation. One definition of the word intervene from Miriam Webster Dictionary is: To become involved in something in order to have an influence on what happens. There are countless ways to intervene in safety. Organizations constantly intervene in safety since an intervention is an attempt to step in and change the behaviors or circumstances to improve results. There are issues with safety incentive programs that safety professionals need to be aware of before deciding whether to develop or implement one. Common Concerns with Incentive Programs Perhaps the single biggest concern with incentive programs is incentivizing the wrong behaviors. As Alfie Kohn asked, “Do rewards motivate people? Yes. They motivate people to get the rewards.” When the motivation for employees is based on an external reward, then employees may not necessarily follow the intended behaviors that were the reason for the incentive program in the first place. The primary example of incentivizing the wrong behavior in safety is when incentives are based on injury rates, especially when a reward will be given based on no injuries. Then it is common

for false feedback to occur, or that employees fail to report minor workplace injuries so they will still be eligible for the prize. Some common problems with safety awards, especially when they are incentive based include:

• The rewards are not related to safe behavior • The reward is so large it overshadows the efforts to improve the safety process • The rewards are perceived by employees as an ongoing entitlement • A bunch of injuries are reported right after the incentive program ends

OSHA Classification of incentive Programs Safety professionals in some organizations mistakenly believe that OSHA does not allow incentive programs. This is not true. There is an important distinction between the kinds of incentive programs that OSHA frowns upon and the ones that are acceptable. The basic distinction is whether the incentive is based on injuries (or the lack of injuries) or based on behaviors. OSHA recognizes that incentive programs that are likely to encourage underreporting of workplace injuries. 1. Traditional Programs: These are programs with a results focus; based on lagging measures such as injuries and illnesses. They are often based on no or fewer injuries occurring. 2. Non-Traditional Programs: The focus in these programs is on active participation; leading indicators, such as behavior-based programs. In a well-known 2012 memorandum from then Deputy Assistant Secretary of Labor for OSHA, Richard Fairfax, to Regional OSHA Administrators and Whistleblower Prorgram Managers, OSHA’s position on incentives was disclosed as follows:

“…some employers establish programs that unintentionally or intentionally provide employees an incentive to not report injuries. For example, an employer might enter all employees who have not been injured in the previous year in a drawing to win a prize, or a team of employees might be awarded a bonus if no one from the team is injured over some period of time. Such programs might be well-intentioned efforts by employers to encourage their workers to use safe practices. However, there are better ways to encourage safe work practices, such as incentives that promote worker participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents or ‘near misses.’ ….Incentive programs that discourage employees from reporting their injuries are problematic because, under section 11(c), an employer may not "in any manner discriminate" against

an employee because the employee exercises a protected right, such as the right to report an injury.”

OSHA further bolstered and reiterated this stance on incentives with the very controversial language used in the Preamble to the Final Rule to “Improve Tracking of Workplace Injuries and Illnesses,” also commonly referred to as the “Electronic Recordkeeping Rule.” (See 81 Fed. Reg. 92, 29671 – 29674.) The bottom line is that OSHA does not approve or disapprove designs or effectiveness of Safety Incentive Programs. However, OSHA does not look favorably on safety incentive programs that may encourage underreporting of workplace injuries. What Are the Most Powerful Incentives to Encourage Employees to Work Safely? Based on research and experience, the two most powerful incentives that tend to lead to improved behaviors and performance over time are feedback and recognition. There are substantial benefits to incenting behavior with feedback and recognition, and they include: 1. Feedback and recognition are not expensive to do. 2. Feedback and recognition do not tend to become entitlements. 3. Feedback and recognition clarify safety expectations and responsibilities for employees. 4. Feedback and recognition may have a positive impact on workplace morale. 5. Feedback and recognition can improve relationships in the workplace. A few things to consider in planning for effective behavior feedback and recognition:

• Feedback is most effective when it is immediate or soon after the behavior or achievement, versus feedback that occurs days, weeks or months later;

• Feedback is more effective when it is given regularly such as on a daily basis versus weekly or monthly or less often; and

• Although there are exceptions, feedback should generally be given privately. Feedback and Recognition for Improving Safety Performance Can Be Administered by Peers in the Workforce Positive reinforcement for safety performance does not need to come solely from management and supervision. Many organizations do not take advantage of the opportunities for peer-related reinforcement. According to research conducted by Aubrey Daniels, peers are the most effective source of reinforcement at work. Yet, a paradox remains that peers are generally the most under-utilized source of reinforcement at work.

Organizations may want to consider the use of peer reinforcement for safety performance. Peer-related reinforcement can be highly effective and tends to:

• Lead to more frequent improvements • Make improvements occur much faster (versus management reinforcement) • Improvements made through peer reinforcement appear to last much longer

Management-related Reinforcement & Coaching Along these lines of positive reinforcement, psychologists tell us that management has a greater influence on employees’ discretionary behavior when they use positive reinforcement and coaching rather than the more traditional “command & control” style of management. Aubrey Daniels defines discretionary behavior and explains it this way:

Discretionary effort is defined as that level of effort people would give if they wanted to, but which is beyond what is required. In other words, since the discretionary effort is above and beyond what is expected, demanded, paid for, planned for, there would be no punishment if they didn’t do it. Discretionary effort is what is possible. In many organizations today, management is happy just to get what is expected.

For any safety professionals who may be interested in delving further into this topic of positive reinforcement, Aubrey Daniels’ excellent book is recommended – Bringing Out the Best in People: How to Apply the Astonishing Power of Positive Reinforcement. A Two-Factor Theory of Motivation Frederick Herzberg’s Two-Factor Theory is useful for understanding the factors that motivate people, specifically as we contemplate workplace safety. Herzberg theorized that satisfaction and dissatisfaction are not opposites as traditionally thought. His theory included the two factors of hygiene and motivators on two separate continua. Rather, satisfaction and dissatisfaction are on different continuum altogether. Herzberg conceived that hygiene factors include dissatisfaction and no dissatisfaction are on one continuum, and no satisfaction to satisfaction are opposites on the other motivation continuum. In Herzberg’s theory, hygiene factors are those things that keep people from being dissatisfied and include things such as:

• Working conditions, • Level and quality of supervision, • Company policy and administration,

• Interpersonal relations, • Job security, and • Salary.

A key point Herzberg made about hygiene factors is they do not motivate. When they are in place, they keep people from being dissatisfied. The second continuum is based on things that motivate people. The scale goes from no satisfaction to satisfaction. The following factors tend to satisfy and motivate people:

• Nature of the work, • Sense of achievement, • Recognition, • Responsibility, and • Personal growth and advancement.

It’s important to understand that both hygiene factors and motivators are necessary for people to be fully motivated. For example, if hygiene factors are lacking in some manner, then motivators by themselves are not enough to bring out motivation. The hygiene factors are foundational, and intrinsic motivators must be present. Essentially the two-factor theory is about job enrichment. It isn’t simply about expanding job responsibilities, but rather making the job richer and more satisfying. In many ways this may be beyond the scope of the safety function. However, the astute safety professional may note that an organization that establishes an engaging and empowering safety process can affect a number of the motivator factors through safety. The last four elements listed may all be affected by a good safety process: employees may feel a sense of achievement for safety, the team may be recognized for safety accomplishment, there is a sense of personal responsibility for safety, and knowledge gained in the area of safety may serve for personal growth and future advancement. This is one way some organizations decide to develop their company culture by starting with job enrichment as part of the safety effort. What to Measure in Safety Incentive Programs? First, it is important to note what not to measure in incentive programs. Do not use lagging measures for incentive programs. Do not use injuries or injury rates for incentive program measures – these are the very measures that can lead to underreporting and failure to report minor injuries, or injuries that are capable of being hidden or falsified. Unfortunately, lagging measures are very common and have traditionally been used in safety incentive programs. Since safety incentive programs

that focus on injuries typically lead to underreporting, OSHA does not “look favorably” on traditional Safety Incentive Programs. The basic recommendation is to measure the things that people can and are actually doing for safety. These include safety behaviors, activities, and team projects. Terry McSween makes a distinction between Type One and Type Two Behavioral measures. Type one measures are primary and measures if the work is being done safely. A common metric in Behavior-Based safety programs is the percent safe determined from behavioral observation data. In most cases, it is the hourly workers (the working population) who may be measured in this manner. Typically, management will not be evaluated on type one measures unless they take some time to perform the work, of if they are in the work area and required to wear PPE or follow other safety rules. Type one measures are the ones that are being evoked when an organization states “Safety is a condition of employment.” Type two measures evaluate the support for safety such as providing resources, completing job hazard analyses and incident reports or assisting in safety meetings. Management is commonly evaluated for type two measures that demonstrate their support for the safety effort. Type two measures tend to be more voluntary, whereas type one measures are usually mandatory, i.e., the requirement to lock out electrical sources prior to repairs. It is recommended that employees also be evaluated on type two measures, and that these kind of measures serve as the basis for safety incentive programs. How to Increase Employee Engagement in the Safety Process? Most organizations appear to recognize the importance of having employees engaged in their safety process. The key challenge and question is how to gain meaningful safety engagement? Ideally, employee engagement encompasses the following elements:

• The engagement is meaningful and perceived as such by employees; • The engagement is voluntary; • The engagement involves substantial activities and projects that have the

potential to reduce hazards and exposures to hazards; and • The engagement is recognized and rewarded in some manner.

Here are three simple suggestions for increasing employee engagement in the safety process:

1. Establish clear roles and safety responsibilities for employees; the basis for this is the expectation that employees work safely and follow safety rules and procedures. However, the deeper and more meaningful engagement involves specific ways that employees are encouraged to support the safety efforts, and preferably these elements are measured on a regular basis. These engagement opportunities could include a wide variety of activities supporting the safety efforts. Examples include participating in:

• safety meetings, • safety training, • safety inspections, • safety audits, • IH inspections, • Leading stretching sessions, and, but not limited to, • Leading brown bag safety meetings

2. Celebrate even small achievements that are related to the measurable behaviors and actions taken to improve safety performance. 3. As appropriate, recognize teams and individuals for their safety efforts, in much the same manner they might be recognized for production excellence or cost savings ideas. The expected benefits from taking these simple steps include:

• Employees are crystal clear regarding the expectations the organization has for them regarding their engagement and support for safety.

• Employees recognize the organization is serious about safety by engaging employees in meaningful ways to support the safety process.

• When this kind of safety engagement is well planned and effectively implemented it tends to result in greater motivation.

Incentive Programs Can be Challenging to Administer Incentive programs are more complex and complicated than simply presenting awards for an achievement. The complexity and variables involved in incentive programs means that even though incentive programs may be developed with the best intentions, they can result in unintended side effects. Generally, the problems start when incentive programs are based solely on results such as the requirement that no injuries are incurred. Some issues may be avoided if incentives are focused on specifically defined behaviors.

Numerous negative effects may result when incentives are based on injury data. Examples include:

• The primary concern is that large incentives based on injury data commonly result in underreporting.

• The credibility of the safety effort can be eroded especially if some employees are hiding injuries in order to maintain the incentive program, and other employees are aware of what’s happening.

• Employees think management does not care about them, only about the numbers.

• Management tends to overreact to random changes. • Expectations may be unrealistic and distorted, for example when an organization

with a large population and numerous injuries each year suddenly bases their incentives on zero injuries.

• The incentive program may influence the wrong behaviors; the prime example is that instead of influencing employees working more safely, the behavior that is incentivized is not reporting minor injuries that occur.

• Employees may ridicule safety incentive programs that are not based on substance and improvement of processes, systems and behaviors at all levels.

• Employees may “game the system” in order to achieve rewards, even if little has been done to focus on actual safety improvements

• Incentive programs that are based on injury data may do little if anything to build or improve an organizations safety process

An issue that can affect morale is when groups are penalized for an individual’s failure. Incentive Horror Stories If one has worked as safety professional for even a short period of time, he/she has likely become aware of some safety incentive programs that ended up producing negative, unintended consequences. A couple of examples illustrate this unfortunate possibility: 1. An industrial facility in Pennsylvania set up an award program that involved a grand prize drawing of a large screen TV. In order to be eligible to win the TV, employees simply had to avoid experiencing a recordable injury during the prescribed time period. If an employee experienced a recordable, that employee’s name was withdrew from the drawing. A welder at the site received a small second-degree burn on his forearm which was a recordable injury, and accordingly disqualified him from the drawing. This injury kept his name out of contention for the prize. The unfortunate twist to this story is the injured welder sustained the burn because one of his nearby co-workers was engaging in horseplay with a torch. The injured worker exhibited no at risk behavior; unlike his

co-worker. As one might imagine, and with much disdain, the horse playing co-worker won the TV. The damage to employee morale such an incentive program caused is readily and easily perceived. 2. One of the authors related this Pennsylvania case during safety training with employees at a paper mill in Florida. During a break in the training, an employee shared an example of another story with a similar result. He stated:

“We had a safety incentive program at the paper mill with a grand prize of an all expenses paid trip to Disney World. Similar to the Pennsylvania case, employees had to not experience any injuries to be eligible for the prize. A maintenance employee at the plant won the grand prize. However, prior to taking the trip to Disney World, the employee violated one of the cardinal safety rules at the site. The violation was not severe enough to warrant termination, however it was enough to require disciplinary procedure of 3 days off without pay. It was perfect! The employee took the 3 days off and went to Disney World!”

These are examples of incentive programs that are established with good intentions, but the end result is harmful to the safety effort. Guidelines for Designing Safety Incentive Programs 1. Focus: Incentive programs should focus on prescriptive behaviors and the safety process. This is contrasted to many traditional safety incentive programs that focus on the proscriptive - which is about what people should not do. Safety isn’t simply about a lack of injuries, it’s about what an organization does to ensure that no one gets injured. 2. Rewards: In general, many small rewards are better than one large reward. One reason many small rewards are better than one large reward is because everyone has a chance to be a winner compared to a Lotto style drawing with one winner for a large reward. Also, when many small rewards are available and based on behaviors, then the focus is more likely to be on actually improving the safety process rather than the attention being based on the large reward. 3. Message: Tangible rewards with a message are better than cash rewards. Tangible rewards with a message help people relive and remember what they’ve done for safety, and to take pride in their safety efforts.

4. Activity Based: Base safety incentive programs on activities that are measured and that reduce the risk in the workplace. 5. Variability: Periodically change the focus of the specific behavior for the award. 6. Integration: Link your incentive programs to a leading metric the organization already measures. This is a good way to integrate your incentive programs with ongoing efforts that have already been identified as priorities. A Case Study from Professional Safety Journal Sheehy published an article in Professional Safety Journal about an organization that developed a pilot Safety Incentive Program (SIP) to replace their traditional safety incentive program. The workforce included union and non-union workers in warehouses and repair shops. One of the strategies included integration of the safety incentive program into an existing safety effort. What they did was link the safety incentive program to a Risk Reduction Metric that had already been in place a couple years – it was titled Report Review Committee – RRC. The SIP was funded at $50 per employee, then divided by workgroups according to merit points earned in reports of Near-incidents and Unsafe Conditions. The metrics for risk reduction included: 1) A Quality Scorecard 2) Risk Matrix 3) An Effectiveness Worksheet reviewed by the RRC One of the points Sheehy made is “In safety the emphasis often is not on easily measured things employees do or produce; instead, it is on accidents that do not occur.” This is not the recommended focus for safety incentive programs. As noted earlier, the focus needs to be on what employees do for safety, on safety-related activities that measurably reduce hazards and exposures, and on team projects to impact safety performance. The design for this pilot SIP was based on these proper metrics. There were a few drawbacks of the pilot program noted by Sheehy:

• Some “game playing” was noted. This involved reports that were submitted that did not meet the quality standards established.

• The program was relatively complex. Sheehy noted that another way of viewing the program was that it was sophisticated, but recognized the complexity. In general, the more simple and straightforward the design of the SIP, the better.

• There were some complaints received about the Pilot SIP. For example, some employees complained that while they were having to do specific work to be eligible for safety incentives, the other departments (not in the pilot program) were awarded the traditional way (for not being injured). Some of the

supervisors complained about the added workload to review the Risk Reduction Reports.

Results of the case study included:

• The number of reports increased. • The quality of most of the reports increased. • A number of easily corrected, yet significant risks, were mitigated.

Regarding the risks that were identified and mitigated, a couple of significant examples included:

• It was discovered that faulty hot-sticks were still being carried on some service trucks, and this created a potentially severe hazard that could have resulted in electrocutions and fatalities. Controls were set in place to ensure defective tools were removed from service.

• Employees had to climb onto above ground tanks with curved sides to check the oil level. Again, this created a hazard of injuries from falls from heights that could have resulted in disabling injuries or fatalities. Standing, eye-level gauges were installed to eliminate the need to climb to check the oil levels.

CHAPTER REVIEW QUESTIONS

1. What is an overall proper purpose of safety incentives?

2. Distinguish the terms incentive, reward and recognition.

3. How can linking incentives to traditional, lagging indicators (i.e., injury rates and workers’ comp costs) be problematic?

4. Employee engagement is generally accepted as a driver and key performance

indicator (KPI) of safety. How can leading metrics be linked to an incentive program to improve employee engagement? (Give two, brief examples/illustrations.)

5. If properly designed, implemented and managed, how can incentives improve

safety performance?

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McSween, Terry, The Values-Based Safety Process: Improving Your Safety Culture with Behavior-Based Safety (2nd Ed.) John Wiley & Sons: 2003 Nelson, B., 1001 Ways to Reward Employees, Workman Publishing, 2005 Petersen, Dan, Authentic Involvement, National Safety Council: 2001 Pfeffer, Jeffrey & Robert I. Sutton, Hard Facts, Dangerous Half-Truths & Total Nonsense: Profiting from Evidence-Based Management, Harvard Business School Press: 2006 Ozer, I., Tangibly Rewarding, Occupational Health & Safety, Sept. 2006 Ray, B. Reward Cards Motivate, Occupational Health & Safety, June 2003 Sheehy, E.J., Effective Safety Incentives: A pilot program based on risk reduction, Professional Safety, February 2004 Toellner, Jack, Improving Safety & Health Performance: Identifying and Measuring Leading Indicators, Professional Safety, September 2001.