A majority of U.S. businesses use some sort
of safety incentive. Nevertheless, the debate continues as to their effectiveness.
Learn how such programs are designed, their pros and cons, caveats to implementation,
and possible alternatives.
Prichard, P.E. Ph.D. Aon Worldwide Resources
The effect of rewards on motivation and performance is a well-studied subject
in both management and safety literature. A majority of U.S. businesses use
some sort of safety incentive, and most safety professionals believe that they
are an important element in any safety and health program. Still, there is a
vocal minority viewpoint contending that the ideologies surrounding the concept
of safety incentives are based on flawed premises.
Three parallel debates have been underway for the past 4 years over the use
of safety incentives:
Proponents feel incentives are an essential tool for any organization, regardless
of size or industry, in promoting safe work practices. Incentives build and
maintain employee interest in working safely and act as a motivator for employees
to work safer. However, opponents feel safety incentives are to be avoided like
the plague. This minority viewpoint holds that incentives reward the wrong behavior,
and over time become toxic to the effective functioning of a safety and health
This article discusses how safety incentive programs are designed, the pros
and cons of such programs, caveats regarding implementation, and recommendations
for a path forward.
There are five critical steps for crafting an effective safety incentive
program that must be addressed before implementing an incentive program in the
Structure the incentive program. Set goals,
select rewards, and develop the administrative process. The goals are important
because if set too high (such as an all-or-nothing approach), early failure
will discourage participation; if too low, there is no effort required (thus,
no change in actions) to gain the rewards. Goals must be clearly defined
and easily measured.
Rewards should be tailored to fit the workforce. If not, it's unlikely
the incentive program would motivate anyone. The rewards must have value
to the workers, not management. The power of money is strong, however, many
other things, such as gift certificates or time off, can be just as powerful
(if not more so, under the right circumstances).
There are two additional aspects to consider when structuring an incentive
program. First, workers must be required to take an active role in some
elements of the program. A passive approach requires less worker involvement,
resulting in a lack of required action and, hence, no change in behavior.
Second, it is essential to determine how the program will be run and maintained.
This final step involves determining how records will be maintained, the
methods of performance measurement, reporting and monitoring, and the process
by which rewards are provided. These elements must fit together and be viewed
as fair by he workers or resentment may result.
Failure to establish proper guidelines and administer programs fairly
is usually cited as the primary reason for incentive program failure. The
larger (number of participants) and longer (in duration) the program, the
more critical this step is. The importance of administration cannot be overemphasized.
Workers will judge the program on how well and fairly it is administered.
This is no simple task. Administering a safety incentive program is a complicated
process that occurs just at the point enthusiasm is dimming and time is
running out, often resulting in the administration process being thrown
together in a haphazard manner.
Advocates of safety incentives believe use of a "carrot" encourages and promotes
appropriate safe behavior. It is a way for companies to show they care for their
employees and will recognize those who work safely. Long-term behavior can be
changed by creating heightened safety awareness and providing financial rewards
for proper behavior. The result can be improved morale and reduced workers compensation
Proponents agree that to be effective, safety incentive programs must be
properly developed, implemented, and maintained. Any failure of an incentive
program to create the desired change in behavior is usually attributable to
mistakes made in the implementation process. The most common failures are a
loss of management commitment (leading to a breakdown in enthusiasm and eroding
funding) or the improper administration (usually related to an over-burdened
administration system struggling to cope with immense paperwork requirements).
Finally, those advocating incentive programs stick with them in the belief
that such programs do no harm (even if they do not help), and that discontinuing
them would create even more difficulties; safety incentives "are too woven into
A primary concern with incentive programs is that they are a form of bribery.
As manipulative attempts at control, they are demotivators, creating significant
motivation to "cook the books" (the underreporting mentioned above) than they
do for changing actual in-the-field behavior. This minority holds that incentives
are relied on for two primary reasons: (1) safety professionals do not really
know how to reduce accidents so they have to resort to bribery, or (2) management
wants feel good, and nothing accomplishes that faster than giving things away
("playing Santa Claus").
There are three primary reasons that undermine any benefit envisioned by
safety incentive plans.
The primary concern of those who dispute the efficacy of safety incentives
is the long-term toxic effect they can have on behavior within an organization.
Employees, subcontractors, and contractors are quick to learn the rules and
how to manipulate the system, to minimize the changes needed while maximizing
their gains, at the expense of the sponsor.
Actual practices have shown that employees become disillusioned with incentive
plans when they feel exploited because the expected rewards are not forthcoming.
The criteria and performance evaluation must be seen as objective and within
the performer's control. The recipient should consider the reward equal to the
effort that produced it. Too insignificant, and the incentive will be insulting
and ineffective; overdone, and the balance of fairness will be upset. Extensive
human behavior research has shown that when people are led to think about what
they will get for doing a task (the reward), they typically do it less well
and/or lose interest in it.
Those against incentive programs believe that, at best, reward programs are
difficult to establish and administer, and are fraught with pitfalls that can
undermine the desired outcome. No matter how good the intentions of the program,
an improperly administered program can have significant adverse impacts on performance.
At worst, these type of programs reward the wrong kinds of behavior and distract
management attention from other, high-value actions.
Many people firmly believe that improved safety performance is the product
of an effect safety incentive program. Yet, when you examine individual programs
in-depth (the author of this study studied more than 2 dozen contractor safety
incentive programs), you find that incentives alone are not the reason for safety
success. An effective safety management process is crucial to improved safety
There simply is no direct correlation between efforts and returns. This is
due to the fact that most programs have not been formally evaluated, examined.
or measured. Effectiveness, in the few situations where it has been gauged,
is generally based on anecdotal evidence.
Incentives are part of the traditional command-and-control paradigm. The
primary basis for utilizing incentives is that everyone else is using them and
they report improved performance. Thus, popularity, rather than documented evidence
of impact, is the logic supporting decisions. Even research of best practices
within the Construction Industry (conducted by the Construction Industry Institute,
as part of its Zero Accident study) indicate that the inclusion of incentive
programs among the top ten practices was based on popularity of use, not on
demonstrated effectiveness. This creates a murky and confusing research base
on which to base a decision affecting the economics of a substantial construction
The impact of rewards is very ambiguous. At best, incentives can be said
to make people "feel" good; in the most likely case, they do no harm; and at
worst, they are very damaging to long-term performance. Given the level of effort
required to establish and properly execute a safety incentive program, and this
high level of uncertainty regarding the return on investment (ROI), it makes
more economic sense to dedicate resources toward those activities which have
clear and unambiguous positive effects on safety performance. A safety incentive
program should only be implemented when there are no remaining high-impact actions
left to implement.
The following are some other safety-oriented activities that should be given
On a short-term or individual-case basis, safety incentives may appear to
influence outcomes, the intended consequences. However, over the long term,
rewards have seldom demonstrated any significant influence in generating lasting
behavioral changes. In addition, the unintended consequences and side effects
provide incentive for the wrong behaviors and produce the wrong results.
The usual counter to this reality is that the program was improperly administered,
and that another layer of complexity—refining the program more precisely—would
address the negative results. Even those in support of these incentive programs
recognize that if rewards do not possess reinforcing characteristics (an ability
to influence future behaviors or actions), they cannot be effective. Over time,
this method creates a large, complicated, and cumbersome process, where the
administrative burden grows exponentially. The reality is that training programs
have demonstrated a substantial, unequivocal impact on improving safety in the
field, while incentive programs have not.
Opinions expressed in Expert Commentary articles are those of the author and are
not necessarily held by the author's employer or IRMI. Expert Commentary articles
and other IRMI Online content do not purport to provide legal, accounting, or other
professional advice or opinion. If such advice is needed, consult with your attorney,
accountant, or other qualified adviser.
Please use the print button on the IRMI toolbar to print/preview this page.
© 2000-2014 International Risk Management Institute, Inc. (IRMI). All rights reserved.