Safety Scratch Offs

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Easy-to-implement program where you distribute scratch off cards worth points toward trips and prizes. Learn More

 

Online Points Program

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Warning!! Safety Incentive Programs Under OSHA Scrutiny

Learn How to Defend Your Program

By Marc E. Flanders and Thomas W. Lawrence Jr.

WHY SO CONTROVERSIAL?

Mention the words "Safety Incentive Program" and heads turn, opinions fly and controversy reins. Is it because of the recent challenge by OSHA claiming that incentive programs might dissuade employees to under-report injuries, perhaps? But incentive programs have always been in the spotlight.
Are they effective? Will the improved safety performance last? Are they games or serious behavioral tools?

Incentive programs are viewed negatively by some. 'We are not going to pay for safe behavior, or 'incentives will intimidate employees not to report injuries' or 'I can get to the same place without using incentives.' However, society as a whole has certainly embraced incentives as a positive method to get results. They are used in all aspects of our lives. Parents and teachers use reward and recognition to attain proper behavior in children. Airlines lure us with frequent flyer rewards. Sports figures are rewarded for maximizing their athletic performance. The stock market rewards us for investing wisely, and CEOs get paid based on the profitability of their companies. It is the American Way! Incentive programs gain people's attention, motivating them to get results! While influencing behavior, reward and recognition makes us feel positive.

DO YOU HAVE AN INCENTIVE PROGRAM AND NOT KNOW IT?

Many of us are conditioned by the notion that self-motivation is the right way - we have a mindset that our goals can be attained without the use of incentives. Certainly for many of us this is true. Our professional education may not support an incentive approach. Most safety professionals receive minimal training in this area.

While incentives have become ingrained in society, they often have surreptitiously become a part of our safety programs. How would you answer the following questions?

 

  1. Does your corporation recognize or reward employees for their safe behavior or achieving performance goals or safety milestones?
  2. Is some portion of managers' or employees' compensation in your corporation based on the performance of the safety program?

If you answered yes on either of these questions, it would be fair to say that your corporation acknowledges the value of incentive programs as part of its overall safety process.

These programs actively involve employees by increasing their safety awareness and helping employees support each other in the prevention of injuries. The word incentive need not have a negative connotation. It has evolved to embody reward & recognition, raise and bonus.

STEREOTYPE OF A POORLY DESIGNED SAFETY INCENTIVE PROGRAM

If many companies use these tools and acknowledge (perhaps passively) their value, then why do we still feel uneasy about safety incentive programs? If the discomfort is not the specific program we are involved with, then the concern is likely the stereotype vision of a poorly structured safety incentive program. "Let's give a red sports car away at the end of the year if there are no injuries at the plant."

Some safety incentive programs appear just too excessive…too flamboyant …too greedy…too non-professional! They seem to insult us in their presentation. Further, the structure of some of them could place doubt on the goals of the program.

The methodologies vary. A broad range of incentive programs are available, from safety bingo, to catalogues, to pick-up trucks, to home-grown raffles, to bonus pools, to salary increase reviews, to professionally designed programs. Some are meticulously structured and some are just tacky. Some are integrated into safety programs and some are a substitute for safety programs. Some may be perceived as having the potential to intimidate employees to hide injuries through peer pressure and/or large rewards. Others are void of injury reduction goals and focus more on process. They come in all forms, shapes and sizes. Unfortunately, the few poorly designed ones tend to negatively impact the name of all incentive programs.

OSHA ATTACKS TRADITIONAL INCENTIVE PROGRAMS

OSHA, too has taken notice of the differences between incentive programs. They identify two classifications of incentive programs; Traditional and Non-Traditional.

 

OSHA DEFINED INCENTIVE PROGRAMS

Two Classifications Traditional Incentive Programs Non-Traditional Incentive Programs
Definition Offers employee rewards that are linked to the reduction of the number of injuries/illnesses reported.

Results Focus

Offers employee rewards that are linked to active involvement in safety related activities - safe work practices - process of prevention.

Active Participation Focus

Example Rewards whenever the facility goes a certain length of time without a lost-workday accident. Rewards for attending safety meetings, identifying hazards, making suggestions.
Consequences According To OSHA Might dissuade employees from reporting injuries, and potential rewards are based on actions of fellow employees. Promotes employee interest in and awareness of safety and health issues without the disadvantages of the traditional approach.

OSHA takes the position that "Traditional Incentive Programs" that link rewards to injury reduction 'can provide an inducement for workers to under-report injuries and illnesses'.

Some members of the National Advisory Committee on Occupational Safety and Health (NACOSH) initiated an investigation by OSHA in 1998 to determine if incentive programs lead to under or non-reporting of injuries.

In October of 1998 Dennison Associates, commissioned by OSHA submitted a draft report entitled "Review of the Literature on Safety Incentives". It was finalized in early 1999.

Twenty-seven incentive programs were formally reviewed, 16 non-traditional (safe work practices), 9 traditional (results focus) and 2 dependent on several measures. This was considered empirical research. The remaining literature reviewed was anecdotal and for the most part described programs that linked employees to financial incentives to reduce the number of reported injuries. This was considered non-empirical data. The review states, " Although the outcome of the two types of incentive programs may be the same - a reduced number of injuries and illnesses on the employer's log and a reduction in the employer's costs under workers' compensation, only the former type of program (non-traditional) truly enhances worker safety and health."

……."There is, however, no empirical evidence that such incentive programs (Traditional) have an effect - either positive or negative. We are aware of no empirical studies that evaluate whether incentives exaggerate differences, if any, between reported and actual injury rates."

The Review of the Literature on Safety Incentives was inconclusive.

OSHA has taken three additional actions on this subject the past year:

  1. In mid-'98 OSHA targeted the Voluntary Protection Programs Participants' Association (VPPPA) by way of submitting a set of OSHA incentive program draft guidelines to be followed at VPP sites ("Draft Employee Incentive Programs at VPP Sites"). The policy stated that OSHA does not support Traditional Incentive Programs. They do support Non-Traditional Incentive Programs. VPPPA's response was decisive and persuasive in supporting their memberships' programs, whether Traditional (results focus) or Non-Traditional (those encouraging active employee involvement). VPPPA was not pleased that OSHA was targeting the nation's safest work sites. Although they recognized the potential for underreporting as valid, they did not agree with the guilty-until proven-innocent approach. They suggested that if a problem exists in this area, specific workplaces misusing incentives should be targeted.

    OSHA withdrew implementing the Draft Policy at VPP Sites in a written memorandum. However it has been reported that guidelines governing incentive based programs will be issued on a universal basis in 1999.

     

  2. USA Waste Management of Ohio is cited by OSHA under 1904.2(a) of the record keeping standard (OSHA 200 log reporting requirement). USA Waste Management has a bonus pool rewarding employees with excellent safety records. The pool also includes good attendance and good work practice. The citation suggests Waste Management coerced employees to go against medical authorities in order to falsify records. USA Waste Management is contesting the citation.

    OSHA will pursue companies with incentive programs.

     

  3. OSHA Issues "DRAFT SAFETY AND HEALTH PROGRAM RULE" 29 CFR 1900.1 - -paragraph (c)(2)(iii) reads: "The employer must not discourage employees from making reports and recommendations about fatalities, injuries, illnesses, incidents or hazards in the workplace, or from otherwise participating in the workplace safety and health program." The "DRAFT ERGONOMICS REGULATION" at CFR 1910.503 (a) and (b)(3) contains similar language.

    During the June 1999 ASSE Professional Development Conference OSHA officials stated that a preamble discussion on their incentive position would be included in the proposals of each of these two standards. OSHA stated that public comment would be received on the regulations prior to adoption.

    This provision identifies the source of OSHA's concern and will support compliance officers' efforts to identify and cite traditional incentive programs that could be perceived as discouraging employees from reporting injuries and illnesses.

    OSHA has taken a presumption of guilt stance based on a company having a Traditional Incentive Program that rewards employees. They utilize phrases such as "discourage reporting of accidents," "intimidate employees," "might dissuade employees," "can provide an inducement," "must not discourage employees." By definition this type of program is being interpreted as hiding injuries.

    OSHA justifies its criticism of Traditional Incentive Programs because they focus on results. However, OSHA itself bases many of its standards and enforcement efforts on the occurrence of injuries and illnesses or incidence rates. Injury and illness rate rate performance is a must for selection to OSHA's Voluntary Protection Program. Through its long-range strategic plan OSHA self-imposes accountability for the reduction of injuries and illnesses in the workplace. Process will lead to results, but let us not lose sight that results must also be a major component of an injury reduction strategy. Ultimately organizations, their safety professionals and OSHA will be judged by performance.

     

    THE REAL PROBLEM IS UNDERREPORTING - NOT INCENTIVES

    These are accusations of a potential problem, not substantiation of an actual problem. Let us recognize the real problem. It is not incentive programs. It is underreporting.

    Underreporting is likely a symptom of management not committed to a safe workplace. If management is intent on hiding injuries they do not need a safety incentive program with an obvious trail to do so. Intimidating employees to hide injuries requires a conspiracy that reaches from top management to supervisors and would have to include the employees in the process.

    As an example, take two employers with Traditional Incentive programs that give away a red sports car at the end of the year for no injuries. It looks like a hokey plan, but there is a difference between these two employers. Employer A has an inadequate a safety program and little commitment to a safe workplace. The word is out, - the employees get the message and will not get hurt and will not report injuries. Employer B on the other hand is committed to safety and demonstrates a strong safety program delivering the right message to employees and the expectation of an injury-free workplace. But if you do get hurt, report it and seek immediate medical aid - nothing else is acceptable.

    The moral of the story might bejust because you're driving a red sports car, it doesn't mean you exceeded the speed limit."----even a poorly designed incentive program with proper commitment and direction from management will not generate injury hiding. It won't because management will not tolerate it.

    If employers want to hide injuries, why leave an incentive program trail. More obvious alternatives are available for a management bent on underreporting injuries to utilize.

     

    • Poor administration of records
    • Poor internal reporting requirements of injuries
    • Intentional underreporting
    • Intimidation of employees not to report

     

    OSHA HAS AUTHORITY TO ACT ON UNDERREPORTERS

    OSHA already has authority to act if there is a violation of the General Duty Clause and Record Keeping requirements. These provisions appear to address the underreporting issues.

    The mere existence of an incentive program no matter how poorly designed should not be the object of regulation or the determinant of guilt. If OSHA is truly concerned with the issue of underreporting then they need to look into multiple causes - document underreporting and determine management deficiencies that lead to the situation. Let us clearly distinguish between what is perceived to potentially result in underreporting and actual underreporting. The former is speculation. The later is a matter of documented fact.

    Each company should be able to determine for itself the value of incentives as part of their overall safety program. Hundreds of potential structures exist that may build on combinations of Traditional (targets reduction in injuries) and Non-Traditional (focuses on employee participation) components. The incentive process will depend on the best fit for a particular safety culture at any point in time. Most of us prefer to determine our own type of program. The government should not be in the business of structuring safety incentive programs. This is a buyer's decision.

     

    TRADITIONAL OR NON-TRADITIONAL INCENTIVE PROGRAM STRUCTURE?*

    *Design considerations need to be based on corporations'
    safety culture profile & overall safety program objectives

     

    OSHA RAISES AWARENESS FOR PRUDENT INCENTIVE PROGRAMS

    Although their target may be misdirected, NACOSH members and OSHA have already accomplished an important service by raising awareness that all incentive programs are not the same. This discussion is encouraging because it helps employers to reevaluate the strengths and weaknesses of incentive programs.

    Whether or not OSHA implements incentive program guidelines or adopts other methods to address incentive programs, prudent companies should act to put themselves in a defendable position by:

     

    1. Making sure their Incentive programs are part of a strong overall Safety Program backed by management.
    2. Developing custom programs that fit the company profile & objectives.
      • Structuring incentive programs with the same professional and diligent care as the other components in the safety program.
      • If injury reduction is a goal, develop a balanced program that includes both Traditional (targets reduction in injuries) and Non-Traditional (focuses on employee participation)
    3. Having upper management send a clear message to middle management and employees that underreporting or non-reporting will not be tolerated.
    4. Making sure OSHA records are meticulously maintained.
    5. Keeping employees involved not only as program participants, but also in the implementation and monitoring process.

     


    Incentive programs are here to stay. They are too effective and popular not to be considered as part of the menu of safety options. NACOSH members and OSHA are sending employers a strong message: If you utilize results-oriented Traditional Incentive programs, make sure you develop a structure that will not intimidate employees to underreport injuries nor be perceived to underreport injuries.

    Corporations should not be intimidated by this message. They should not compromise the goals of their incentive programs because of these actions. Rather, this should be an opportunity to strengthen incentive programs and to develop structures that not only maximize results, but also meet the self-imposed standards expected of responsible employers.

     

    REFERENCE DOCUMENTATION

    1. Finnegan, Lisa. "Will OSHA Regulate INCENTIVE PROGRAMS"-Occupational Hazards Magazine - 6/98
    2. "DRAFT OSHA POLICY ON EMPLOYEE INCENTIVE PROGRAMS AT VPP SITES" - 7/98
    3. Elliot, Lee Anne, Director. Voluntary Protection Programs Participants' Association (VPPPA) response to OSHAs' Draft Policy - 8/14/98
    4. Inside OSHA, Vol. 5 No. 21 -"Recordkeeping Citation Could Spark Ban on Safety Incentive Games"- October 19,1998
    5. OSHA "DRAFT SAFETY AND HEALTH PROGRAM RULE" 29 CFR 1900.1 - 10/27/98
    6. OSHA "DRAFT EROGONOMICS REGULATION" 29 CFR 1910.500.512 - 2/12/99
    7. OSHA - REVIEW OF THE LITERATURE ON SAFETY INCENTIVES - prepared by Dennison Associates in Association with Ruth Ruttenberg & Associates - October 1998
    8. BNAC Safety Communicator, "Safety Incentive Program Claims Not Supported by Evidence, OSHA Official Says" - Winter 1999


    Marc E. Flanders, ARM
    is Principal of WC Solutions Group in Chesterfield, MO, a risk management consulting firm specializing in the custom design and implementation of motivational processes to improve workplace safety. He holds a Bachelor of Arts degree from Bowling Green University, and an Associate in Risk Management (ARM). Marc was former President of Tarsus Toastmasters. He has presented at national and local professional organizations. Topics include controlling risk in diverse cultural environments through the development of safety network communication systems between management and employees. He is an Associate Member of the Risk and Insurance Management Society and a Professional Member of the ASSE's St. Louis Chapter.

    Thomas W. Lawrence Jr. CSP, P.E.
    is Principal with Risk, Reliability and Safety Engineering of Houston, Texas. Tom is based in the St. Louis Office of RRS and is a professional member of the St. Louis Chapter, the Consultant's Division, and ASSE's Government Affairs Committee. He is a former president of the St. Louis Chapter, a former president of the Board of Certified Safety Professionals and is past chair of the Business and Industry Division of the National Safety Council. Tom was awarded ASSE's 1998-1999 Edgar Monsanto Queeny Safety Professional of the Year. He holds the B.S. and M.S. in Chemical Engineering from Auburn University.