Health, Well-Being Come First
Effective Safety Incentive Programs Can Help Cut Spending
A key element in the national dialogue over health care has included a discussion of workforce costs incurred by corporations, and its inevitable effect on profitability. Health and safety in the workplace are issues that most employers agree is critical, given the rising cost per employee of health care in 2008-2009.
And, the numbers are stark: Surveys by top global professional services companies Mercer and Towers Perrin point to continuing health care cost increases as we move through 2010 into 2011, though at different rates. Towers Perrin reports a per employee cost of anywhere from $8,904 to $10,104 in 2009. Mercer predicts a 9 percent increase in 2010, up from 6.4 percent in 2009, but finds that employers are trying to limit the actual cost increase to 5.9 percent through various cost containment measures. Towers Perrin anticipates a 7 percent rise.
Every year, nearly 5 million workers experience an occupational injury or illness on the job, according to the latest information from the Occupational, Safety and Health Administration (OSHA). More than half of these injuries and illnesses are severe enough to cause the worker to spend time away from work. That translates to decreased worker production time and lower corporate revenues. In 2008, there were 277,680 occupational injuries and illnesses with days away from work reported for state and local governments combined. Fifty percent occurred in service occupations, including health care support and protective service workers. In contrast, 22 percent of the injuries and illnesses in the private industry occurred in service occupations.
All of these costs put serious pressure on employers and employees alike, with more employees unable to maintain insurance with the added costs. Cost sharing is the most common strategy for containing the increase, followed by eliminating high-cost options and promoting consumer-driven health plans and other moderately priced alternative plans.
"Understanding and appreciating the value of safety and health in the workforce should be part of the culture of any company regardless of size or type of product," said Norma Knollenberg, past president of the Incentive Marketing Association, and owner and CEO of Top Brands Inc., in Oshkosh, Wis.
"As more emphasis is put on corporate profitability and eliminating all unnecessary costs," she said, "reducing workers' compensation expenses and creating a healthy environment by implementing a sound safety incentive program should be embraced now more than ever."
While safety programs have been around for decades—serving to focus employees on behaviors that will create safe and efficient environments—a safety incentive program, if implemented successfully, has other positive effects on corporate culture. Such programs can help to create shared experiences among a workforce, while also teaching better safety behaviors. The result can help change the entire culture of your workforce in a positive way.
"When we think about basic human needs and what motivates and drives behavior," said Lisa Esposito, marketing manager of Rymax Marketing Services Inc., of Pine Brook, N.J., "we reference back to a basic theory formulated by psychologist Abraham Maslow." In 1943, Maslow introduced the concept that people are motivated to fulfill basic human needs in life, and within an order of importance. Once the top tier of physiological needs is met (food, water, air, etc.), the next crucial element is the need for safety and security. It is with this basic human need concept that the desire for safety in the workplace plays a vital role, Esposito said.
In the United States, there are governmental standards that help to ensure safety, but there always is room for added awareness.
"Safety programs can be designed to heighten the responsiveness of following a company's guidelines, standards and measures," Esposito explained. "Rewarding those who adhere to the guidelines demonstrates that employers want to protect employees and create a rewarding, safe environment."
Jeffrey Fina, executive vice president of business development and innovation for Long Island City, N.Y.-based Michael C. Fina, a company that provides global employee recognition solutions, agreed that safety programs promote safe working behavior, but added that they also correct unsafe behavior. When they're effective, he noted, they create an overall safer working environment that shows return on investment by driving down costs associated with injuries and accidents.
From direct costs associated with workers' compensation claims, medical coverage and property damage, to indirect costs for training and compensation of replacement workers, investigations, administration and implementing corrective actions, costs associated with unsafe work environments can be considerable.
"Flexible safety programs underscore your company's commitment to safety," Fina said. And the successful, carefully crafted ones do so not only by influencing the bottom line—because they clearly do that—but also helping to engage and motivate employees by making them responsible for their own safety, rewarding them for good practices, and letting them know that the organization cares about their well-being. All of this serves to make the workforce more productive.
Richard A. Blabolil, president of Marketing Innovators in Rosemont, Ill., said, "Safety programs can be excellent tools for keeping the right behaviors on people's minds." Those behaviors might include employee involvement, safety awareness, accident prevention, accident reduction and lost time reduction, to name a few. Safety programs also have included wellness and health programs.
"[Safety programs] are of utmost importance today because there is an increased focus on going green, and the reduction in many workforces has put additional pressure on workers to increase productivity with less people," Blabolil said. "The outcomes of such environments can be more stress, anxiety and fatigue."
Richard Flynn, director of Make it Happen, C.A. Short Company, based in Charlotte, N.C., which specializes in safety programs, agreed that with a properly structured behavior-based safety awareness awards and incentive program you can change your safety culture, protect against preventable injuries (accidents), decrease days away (lost time), and expect to be rewarded with lower disability costs, more satisfied workers and ultimately, higher productivity—all without encouraging non-reporting of accidents. Flynn, however, advised that to prevent non-reporting, upper management needs to send a clear message: "Non-reporting or under-reporting is not tolerated in this workplace. Put it in writing," Flynn said. "Post it on bulletin boards. Print it on paychecks. Put the message out there again and again."
Experts agree that one of the first steps in setting up an effective safety promotion program is to define your goals. This generally involves two steps: first, educating and motivating employees to do what you want them to do (for example, using seat belts); and second, rewarding employees when they achieve the desired result.
Another key question to ask yourself is: What, exactly, do you want to accomplish? As soon as you have defined specific goals (for example, increasing safety meeting attendance from 50 percent to 80 percent; or reducing recordable injuries by 20 percent), you have a baseline to measure against.
"Basically," Esposito explained, "there needs to be an evaluation and understanding of the safety issues at hand, a plan with which to address them and objectives to correct them with measurable metrics."
Part of the program should involve proper training to prevent accidents. Healthy employees are critical to any company. Employees who are healthy are happier, more alert and more responsive to making sure they work safely. There is a trend to include this health aspect in safety programs. Workers out sick can be just as costly to a company as workers out on job-related injuries. So, try to plan a proactive, rather than a reactive program.
Proactive recognition programs, for example, might emphasize working safely as a behavior. Employees would be rewarded for:
Some of these behaviors are mandatory and others are voluntary. But, all of them—no matter how significant or insignificant they might seem—should be recognized. Positive reinforcement and recognition strategies can help increase the frequency of these behaviors.
View From the Top
Always solicit input from top management, supervisors and key hourly employees. Start a safety committee to help you plan your program and decide such matters as: What areas will you focus on? What are your realistic goals? If your firm has a history of starting programs that are never sustained, you might have a hard time gaining employee support for your new safety promotion.
Find out if your supervisors really are committed to safety, and if they practice the same safety they preach. Employees have a sixth sense about this; they'll know. And if supervisors don't really believe in the program, they won't buy into it. For that reason, it's never a good idea to spring the program on employees as being just management's idea. Give everyone involved ownership of it.
"That's exactly right," Fina said. "In our company's safety programs, we can't stress enough the importance of strong leadership, training and communication. A good safety program needs to emphasize the clear objectives of the company and focus on obtainable goals. The program should be consistent, and all initiatives should underscore the mission and vision of the company."
When all is said and done, one of the main factors in starting up a safety program is communication, experts said. When you are considering the type of employees that might be using a safety program, know that these might be employees who do not typically work in office settings with daily access to computers. Rather, they might spend most of their time in warehouses and might be operating heavy machinery. In these cases, it is important to have front-line managers communicating program goals and objectives effectively.
Given the fact that many safety initiative programs involve employees who are more hands-on and less computer-oriented individuals, safety planners have to clearly communicate all aspects of the program to the workforce.
Because many safety incentive programs are team based, one effective way to communicate the details of the program is with a "kickoff" meeting with all employees.
Using this method, program rules and guidelines are conveyed and handed out at that time, and everyone has a chance to ask questions. This is an opportunity to get the workers engaged and to motivate them to work smarter and safer. Critical to the success of the program is for management to attend these "kickoffs" and show their support. There are several companies in the incentive marketplace that specialize in safety programs and can design the programs as events and make it a positive, fun experience for the workers.
"Communications is one of the major elements of a properly structured recognition program," Flynn said.
At the program kick-off, there should be posters promoting the program at key employee buy-in spots, such as time clocks, bulletin boards and restrooms.
"The most cost-efficient and effective communication tool in the merchandise-based programs are the physical full-color catalogs, which must be issued to every employee without exception," Flynn said. "Program rules and guidelines for that specific program are often bound or inserted into the printed catalog for future reference. The online safety catalog is also a primary vehicle for communicating safety, with regular updates as part of the inherent value of the technology."
Some successful programs have made up a an "On Boarding" kit that goes along with the other materials a new hire will receive as part of their Safety Recognition Programs. Such kits usually are defined as part of Rewards and Recognition, from a human resources perspective.
A variation on that theme is a "Safety First" kit, developed to give to employees at the time of the program launch, said Blabolil. Safety First kits contain rules, goals and reward options. Banners, posters, "scratch-off" cards, T-shirts, hats and other logoed apparel often are included. The ongoing communications include feedback on the key performance indicators, such as turnover, attendance, accidents and other pertinent metrics.
Motivating executives, managers and supervisors is also important. They should not only administer the program, but be part of it as well. Get these individuals to commit to investing their time and effort to improve their own safety while they encourage workers to do the same.
However it is done, you should always recognize safety accomplishments. That way, individuals become responsible, not only for their own safety, but also for that of everyone in the organization. That way, more people will go home every day without injuries.
One of the key components to any incentive program's success is using the right blend of communication tactics (on-site posters, flyers in a cafeteria, announcements) and highly desirable reward options.
Every client need is different, explained Esposito. "But the one overall commonality is that employers and business owners want to reduce their costs of workplace injuries and keep their people safe. According to OSHA, businesses nationwide spend more than $170 billion a year, wastefully, and oftentimes, injuries and expenses are preventable. There is a need for heightened awareness, and internal incentive programs with tangible rewards have proven to reduce on-the-job injuries."
Planners need to decide exactly what behavior it is that they will reward. This can include much more than days worked safely and fewer accidents.
For example, South Carolina Gas, a southern electric company, once tied its safety suggestion program to a comprehensive recognition program. In the first month of the program, the utility company received five times as many suggestions as were received the entire previous year.
From an initiatives perspective, Michael C. Fina has helped its clients implement programs that focus not only on performance and behavior, but also achievement and longevity. These include recognition for things like safe driving milestones, such as time or miles without having violations or accidents, training, OSHA compliance and making safety suggestions.
"When it comes to the actual awards, though," Fina said, "it's really all about choice. We offer a huge selection of lifestyle gifts that appeal to employees of different ages and tastes."
Basic lifestyle products make excellent motivators. Many program designers suggest that if you want to give away random gifts, you should give many gifts, not just a few. Too often, harried safety directors fall prey to the seductive lure of one big prize—a car that is raffled off to all safe employees. The person who wins the car loves it; everyone else is disappointed.
As with any successful incentive program, the safety incentive awards should be matched with the participants' demographics and generational preferences. If the audience consists of blue-collar males, for example, hunting, fishing and outdoor products are very effective.
"We sell a significant number of Buck Knives for mining company and oil rigging safety incentive program awards. Currently, gift certificates are also being used as awards," said Knollenberg.
"There is a trend with oil companies to implement more safety programs overseas," she continued, "as they have built most of their new refineries closer to the active oil fields in Africa and the Middle East. The merchandise they use for these programs are bid from suppliers from around the world, i.e., England, France, Nigeria, and the merchandise is shipped directly from the factory in China to the destination without coming through the USA."
Flynn, of C.A. Short, said, "If the program is expected to comply with IRS rules, which is a trend, the award must be "tangible personal property," ideally merchandise that has trophy value—for example, a TV for being safe at work—and encourages family involvement (i.e., "Mom, stay safe today, we almost have enough safety points to get the bike I saw in the catalog").
How It All Works: Best Practices
Ideally, a program's rules and guidelines are designed around the existing corporate culture. The goals and objectives of the safety program should be defined, and thus, serve as measurable results.
From an administration standpoint, you have to factor in whether the participants are at a single, fixed location, are across multiple locations, or somewhere in between, such as the case with a transportation services organization. Access and adoption of Internet technology has become a serious consideration as well. Do your people have access to the Internet, and would they be comfortable with accessing their program online?
Safety programs are easy to implement and administer through technology-based solutions, Fina noted.
"For instance," he said, "something like a milestone achievement, such as going a certain number of years without an accident, can be handled through Lifestyles Inspiration, where the employee receives Michael C. Fina's signature Magic Box and a gift selection catalog. This can be ordered by phone or online."
A nomination program can be completely run online. At the Michael C. Fina Company, one solution lets managers or peers nominate employees they think are deserving of recognition. The nomination can be entered online, and once reviewed and approved the employee receives notification and can, again, select an appropriate gift of their choosing. An on-the-spot solution can be used for something like reporting an unsafe work situation. The employee can be rewarded with a "Great Job" card, which can be redeemed online.
A number of different initiatives can be combined and administered through a points program.
"We have a Total Vision Recognition platform," Fina said, "which is a points-based solution, whereby employees can earn points for different initiatives and save points for gift redemption."
Having different initiatives in a safety recognition program highlights all of the different ways employees can work to ensure that the workplace is a safer one, and rewards them for being responsible for their own safety and the safety of others.
A properly managed safety culture, noted Blabolil, is based on this basic principle: safety as an ethical responsibility, as part of a corporate culture and not a program.
Management, he said, has to be responsible. Employees must be trained to work safely, and in fact, safety should be a condition of employment.
Blabolil also recommended that safety programs be site-specific, with recurring audits of the workplace with prompt corrective action if deemed necessary. Always be flexible at any point during the life of the program. Does your safety plan need to be changed? Ask participants how they feel the program is doing as they are experiencing it. If they feel it's not working, what changes would they like to see made?
Do such programs typically deliver measurable results?
"Yes," Flynn said, "but results will vary. Implementing a safety recognition program is not a magic bullet. But, if the executive level has bought into the program, management finds it easy to implement and maintain, and participating employees see the commitment from above in the delivery to them of a properly structured, fair-to-all recognition program, which they can share with their peers and their family, the positive results are easy to measure."
Safety programs definitely deliver measureable results, agreed Blabolil. "The metrics are transparent," he continued. "The key is to accurately report the data."
By definition, a safety program is a comprehensive, organized and documented effort by a business or corporation to establish a safe and healthy working environment. Safety incentive programs are designed to modify or change mental and/or physical behaviors by motivating employees with reward incentives.
Safety awareness is an important part of a successful safety incentive program in that employees must clearly understand what the safety policies and procedures are and what steps they must take to maintain an accident-free environment that will ultimately yield an incentive reward. Another distinguishing factor is that they require the tracking and reporting of employee performance as well as issuing the awards as safety goals are achieved.
Fina said the return on investment for a safety recognition program that serves to reinforce safety training and fosters a self-motivated culture can be measured in the following ways: reduced downtime, increased equipment operating time, decreased workers' compensation and legal fees, increased service levels, higher customer satisfaction and greater client retention.
He offered this example of a successful program: "One of our customers, WIKA Instrument Corp., of Lawrenceville, Ga., had a paper-based safety recognition points program that was time-consuming, inefficient and ineffective for both human resources and the employees.
"We provided them with a Web-based safety recognition program that automated the points process, making it easy and fun for employees to accrue points, for those points to be accurately tracked, and for gifts to be delivered in a timely manner," Fina said. As a result of the Web-driven points system, WIKA employees were motivated to reach higher point goals, and consequently, receive better gifts.
The new and improved safety program drove the desired behavior for WIKA: Workers' compensation costs decreased from $1.35/$100 in 2005, to $0.10/$100 in 2007, helping the company's bottom line.
Not only has WIKA's injury rate fallen below OSHA's group average, but employee relations surveys also have shown more than a 90 percent increase in favorable comments.