From parents rewarding children for good behaviour through to police fining motorists for speeding, society is full of incentives to encourage positive actions (or discourage negative actions).
Ask a behavioural economist, and they might explain this through rational choice theory, or the idea that individuals will make decisions that maximise their individual satisfaction.
This is the idea behind a safety incentive program. These programs aim to reduce workplace accidents and injuries by incentivising employees with rewards (either monetary or non-monetary, such as time off bonuses) to adhere to safe work practices.
But is it really that simple? Is it possible to incentivise better safety practices in the workplace?
In this article, we look at the benefits and downsides of such programs—with some surprising insights into employee behaviour.
What are the benefits of Safety Incentive Programs?
The first safety incentive programs were rolled out in the 1970s, with ‘rate based’ programs which incentivised employees with rewards for reductions in the numbers of reported accidents or injuries.
It makes sense, right?
After-all, there are plenty of examples from history of incentives working. For instance, in the 18th century, 1 in 10 convicts died on the voyage from Britain to Australia. The British authorities decided to reward Captains for keeping convicts alive. The result? Mortality fell to near zero.
Similarly, early safety incentive programs delivered results, leading to a fall in the number of injury compensation claims in the 1980s. In fact, they were seen as so successful that some jurisdictions in the United States mandated their use.
Benefits of such programs can include:
- Greater awareness of workplace health and safety initiatives and processes
- Improved compliance, with one study showing organisations with a safety incentive program experienced a 44.2% reduction in mean lost time injuries between 1999-2001
- Cost savings associated with reductions in workplace injury and illness, with studies showing an average return of almost $6 for every dollar invested into workplace safety
- More positive workplace culture leading to higher levels of employee engagement
- Greater productivity, with a Gallup study showing that engaged workforces are 17% more productive
Safety incentive programs, when adopted correctly (we’ll talk more about that later), can be beneficial to organisations, with data showing that manufacturers with the fewest safety incentives experienced injury rates five times higher than those with the most comprehensive programs.
What are the downsides of safety incentive programs
Does this mean that safety incentive programs always result in improved outcomes?
We’ll answer that shortly, but first, let’s consider three real-world examples demonstrating the complications associated with incentivising human behaviour:
- When a chain of Israeli childcare centres introduced penalties for parents who were late to pick up their children, the number of late parents skyrocketed
- In his 1970 book Gift Relationship, Richard Titmuss noted how an experiment offering cash payments for blood donations reduced the number of blood donors
- When French authorities offered rewards for killing rats in early 20th century Hanoi—requiring tails as proof—they soon noticed tail-less rats wandering the streets
The lesson here isn’t that incentives don’t work (they can: remember the example of convicts earlier). It’s that people don’t always respond to incentives in the way we might predict.
Carl Potter, founder of an online safety resource centre, was inspired to become a safety advocate after seeing this play out at a utility company that he worked for in the 1980s.
You can probably guess where this is going.
Not wanting to miss out on the reward (or to cause his colleagues to miss out), Potter came into work the next day with a heavily bandaged finger and told his boss he’d hurt himself at home.
He wasn’t the only one to ‘hide’ injuries.
“It was pretty common to see people come dragging in, limping in and say, ‘I did this at home,’ because management looked the other way,” he recalls.
A report presented to Safe Work Australia highlights how incentives based around reductions in injury rates are inherently flawed. Without a strong safety reporting culture, they can motivate underreporting, or even lead to peer pressure or bullying to downplay or cover up injuries.
In fact, a 2010 study by the US Government Accountability Office found that 1 in 4 manufacturing companies had incentive programs that may negatively impact reporting.
The OHSA (Occupational Safety and Health Administration) subsequently declared that traditional incentive programs which link rewards to injury reduction can provide an “inducement for workers to under-report injuries and illnesses”.
The OHSA subsequently introduced measures to ensure an employee's right to report injuries free from retaliation—which could under certain circumstances include denial of benefits a part of an incentive program.
Are safety incentive programs effective?
So, do safety incentive programs work or not?
Depending on their design, incentives schemes can be a powerful mechanism for improving workplace health and safety. One study concluded they can have “lasting positive effectiveness”— but only if they are maintained and administered properly.
Some of the key success factors to ensure their effectiveness can include:
- Measuring success through leading indicators
- Involving everyone and ensuring management ‘buy in’
- Recognising employees (not just incentivising them with monetary rewards)
- Rewarding positive safety behaviour, not just results
- Keeping it fresh
Each of these factors are outlined below.
Use of leading indicators
Early programs relied on lagging indicators which measure events after they’ve occurred—such as the number of reported injuries or incidents. As we’ve seen in this article, these measures can bring their own problems.
Instead, companies should focus on measuring leading indicators, which are proactive and preventive indicators of reduced workplace safety risks.
Like all workplace safety initiatives, it's critical to have buy-in from everyone, including management. Whereas poor managers see workplace safety as red tape, they should see the benefits and lead by example.
Furthermore, employees at every level in the organisation need to be involved and motivated. Ideally, as a NSW review of safety incentives in the mining industry found, programs should be developed in consultation with employees.
Rather than rewarding results, companies should incentivise specific behaviours which instil a culture of safety. These could include behaviours such as identifying hazards, reporting near misses, or demonstrating a positive attitude towards safety.
Recognition over reward
Instead of money or gift cards, programs should consider other rewards like safety employee of the month awards, employee shout-outs or team celebrations.
Keep it fresh
Research has shown that safety incentives often only have short-term influences on safety outcomes and are no replacement for long-term, permanent solutions.
To maximise the effectiveness of incentive schemes, companies should inject variety into the program to keep it fresh. It’s also important to make sure rewards are delivered promptly—no one is motivated by rewards months after the fact.
Should companies have an incentive program?
In summary, safety incentive programs are not a workplace safety 'silver bullet' that can 'solve' a company's workplace safety issues or keep them at the head of the pack.
But, used correctly in conjunction with leading indicators, management buy-in, focus on behaviour and sufficient employee recognition, they can contribute towards a culture of safety and reap the rewards of improved engagement and productivity.