Are Employee Incentive Programs Detrimental for Safety?
Kelly Cave & Julia Borges
Have you ever wondered why employees in some organizations are afraid to speak up and report safety incidents, even when those incidents could have led to serious injury or death? Many people assume this lack of reporting is due to employee disengagement or workers not understanding the importance of incident reporting. However, have you considered that perhaps employees are hesitant to report due to the way the organization’s incentive system is set up?
Two Types of Incentive Programs
A very common way for organizations to promote employee engagement in safety is by implementing safety incentive programs. These programs often reward employees for achieving certain goals or for engaging in certain behaviors (Goodrum & Gangwar, 2004). There are two major types of safety incentive programs that organizations use:
• Accident and injury-based programs
• Behavior-based programs
Accident and Injury-Based. The first type of incentive program is an accident and injury-based program (commonly known as lagging indicators). This type of program can be focused on individual, department, or organizational results. Rewards are based on the number of accidents and/or injuries that occur within a given amount of time (e.g. monthly, quarterly, or yearly). In these systems, employees are rewarded for avoiding accidents and injuries or for lowering the rates of accidents or near misses. These are called lagging indicators because they measure goal accomplishments. Although these tend to be easier to measure, they can be a challenge to influence. Superficially, this type of system makes intuitive sense and is easy to track, however, accident and injury-based programs actually encourage underreporting and promote distrust between workers.
Behavior-Based. The other type of incentive program is a behavior-based system (commonly known as leading indicators). This program is primarily focused on individuals, and rewards are based on worker behaviors, such as engaging in safety promotion. As opposed to lagging indicators, leading indicators predict goal achievement. Although leading indicators tend to be more challenging to measure than lagging indicators, organizations tend to have more influence over them. Overall, the significant benefit of behavior-based systems is that they don’t penalize employees for reporting accidents and injuries and actually help prevent future accidents and injuries from occurring.
How can I use this in my organization?
To reduce underreporting and encourage employees to report safety accidents and near-misses, here are a few tips organizations should keep in mind (Edmondson, 1999).
• Reward employees for engaging proactive safety behaviors. These behaviors may include:
o Reporting accidents and near-misses
o Attending safety trainings
o Participating on a safety committee
o Role modeling safety behaviors for coworkers
• Do not reward employees for a lack of accidents and/or injuries.
• Do not punish employees for being involved in an incident.
To answer the question posed by the title of this post, employee incentive programs do not have to be detrimental to safety. In fact, they can be quite the opposite if implemented effectively. By lessening rewards for lagging indicators and encouraging rewards for leading indicators, organizations can help reduce instances of underreporting all while reinforcing positive safety behaviors that lead to improved safety performance (Geller, 1996).
Edmondson, A. (1999). Psychological safety and learning behavior in work teams. Administrative science quarterly, 44(2), 350-383.
Geller, E. S. (1996). The truth about safety incentives. Professional Safety, 41(10), 34.
Goodrum, P. M., & Gangwar, M. (2004). Safety incentives. A study of their effectiveness in construction Prof Safety, 49(7), 24-3.