Safety in the Workplace Part 2/2: Incentivizing Safety to Get Results
One way to super-charge your safety program is by incentivizing good performance through a gift program. Managers and employees are more likely to adhere to good practice if they know that safe behavior will be rewarded. This makes incentive programs a great way to minimize the costs associated with workplace safety incidents. What should you do to achieve the results you want?
Lay the Foundation
The main goal of your incentive program is to create a safer workplace. The first step in achieving this goal is to have a robust safety program already established. Once this has taken place, an incentive program can be brought in to drive results and cement safety within company culture. Incentive programs make safety a part of day-to-day life by rewarding employees for participating in safety committees, pursuing certifications, and reporting safety hazards. With an incentive program, safety can go from something employees think about occasionally, to something they think about every day.
Leading over Lagging
There are two kinds of safety incentive program. One is based on leading indicators and the other on lagging indicators. Both are useful metrics, but prioritizing lagging indicators can have unintended consequences. Let’s see how this works. Lagging indicators look back at injury frequency, number of citations, and lost workdays. One way to incentivize safe behavior is to reward employees for having no recorded incidents over a period of time. This may sound unproblematic, but it can lead to underreporting. If employees know that they will receive a reward for not having citations, then they have reason to ignore violations.
This is counterproductive, which is why many companies focus on leading indicators instead of, or in addition to, lagging indicators. Leading indicators are forward-looking and include metrics that lead to good safety outcomes. An incentive program that prioritizes leading indicators rewards employees for reporting violations instead of punishing them after they happen. Other leading indicators include taking part in training, making safety suggestions, or serving on a safety committee. Instead of punishing poor safety outcomes (which are often accidental and not the fault of the person being punished), incentive programs can reward the kind of behavior that get results.
Cash or Gifts?
When designing an incentive program, it’s important to remember that cash gets complicated. Because the IRS treats cash awards as ordinary income, it is subject to the same withholding taxes. This means that a $50.00 cash award costs more than its apparent face value. These costs are either taken on by the employer or passed to the employee in the form of a smaller award. When the employee uses the cash to purchase something, it will be subject to a sales tax, further diminishing the award’s value.
Under qualified plans, gifts are deductible as a business expense and do not carry the same tax obligations as cash. Because of this, you can get more at a lower cost. Gifts have other upsides. A cash award can be spent on necessities and soon forgotten, but a gift will serve as a tangible reminder of an employee’s achievement. Gifts possess an emotional resonance that cash lacks. Employers can offer dinners, tickets, or time off and this can get an employee’s family invested in their achievement too, providing further motivation for employees to get involved in the program. Additionally, personalized or team gifts can help bring colleagues together and form a sense of group identity.
To conclude, incentive programs are a great way to get the results you want out of your safety program. They can build safety into the daily life of a company by getting people personally involved in making the workplace safer. Incentive programs motivate employees to be proactive about safety and help stop accidents before they happen. They are a simple and cost-effective way to manage risk in the workplace.
ASSP (no date) Why Safety Is Good Business. Available at: Safety ROI – Return on Investment | ASSP. (Accessed: 6/14/2023).
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Ferguson, A. (2021) ‘Safety incentive programs: When done correctly, they can boost workplace safety, experts say’, Safety and Health Magazine. Available at: Safety incentive programs | Safety+Health (safetyandhealthmagazine.com)
Safety Stage (2020) Successful Safety Incentive Programs Examples [A-Z Guide]. Available at: Successful Safety Incentive Programs Examples [A-Z Guide] – Safety Stage
Workstride (2016) ‘Is Your Safety Incentive Program Illegal Under OSHA?’ Is Your Safety Incentive Program Illegal Under OSHA? – WorkStride Incentives & Recognition