Safety Culture

Craft Incentive Programs With Care

While most safety incentive programs are well intended, employers must ensure that they don't backfire and discourage reporting.
By: | May 11, 2016 • 6 min read

What kinds of safety incentives lessen injuries and illnesses, and what kinds inadvertently discourage workers from reporting?

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Safety professionals say it’s all in how an incentive program is structured, and perhaps even more importantly, how the importance of maintaining a safe work environment – especially for workers and their families — is communicated.

In 2012, the U.S. Occupational Safety and Health Administration issued a memorandum calling for employers not to provide incentives that effectively discourage employees from reporting their injuries.

Disincentives include awarding paid time off to a unit that has the greatest reduction in incidence rates or maintaining an injury-and illness-free worksite for a period of time.

“If employees do not feel free to report injuries or illnesses, the employer’s entire workforce is put at risk,” OSHA wrote.

“Employers do not learn of and correct dangerous conditions that have resulted in injuries, and injured employees may not receive the proper medical attention, or the workers’ compensation benefits to which they are entitled.

“Ensuring that employees can report injuries or illnesses without fear of retaliation is therefore crucial to protecting worker safety and health.”

The agency last year issued an updated memorandum that detailed the differences between a positive incentive program and one that discourages reporting.

“A positive incentive program,” wrote the agency, “encourages or rewards workers for reporting injuries, illnesses, near-misses, or hazards; and/or recognizes, rewards, and thereby encourages worker involvement in the safety and health management system.”

The memorandum included examples of positive incentives such as “providing tee shirts to workers serving on safety and health committees; offering modest rewards for suggesting ways to strengthen safety and health; or throwing a recognition party at the successful completion of company-wide safety and health training.”

The agency warned that incentive programs that focus on injury and illness numbers often have the effect of discouraging workers from reporting an injury or illness.

Disincentives to reporting, it said, “may range from awarding paid time off to a unit that has the greatest reduction in incidence rates to rewarding workers with a celebration for achieving an injury/rate reduction goal or maintaining an injury-and illness-free worksite for a period of time.”

“There are also programs that actually defeat the purpose, by telling people that they can get paid if they don’t have accidents. But that sends the wrong message.” — Brent Jones, safety officer, Red River Army Depot

But these are just memorandums, and since there are no hard and fast rules about such programs, many employers are confused about what is now acceptable to OSHA, said Don Enke, director of risk control services at Safety National.

Enke recently spoke about OSHA’s view of incentive programs in a webinar, “Out Front Ideas with Kimberly George and Mark Walls,” sponsored by Safety National and Sedgwick.

“I think what OSHA is looking for is, does your program have characteristics that would compromise safety, discourage reporting a claim, or even delay reporting a claim?’” Enke said.

“They definitely don’t want anything delaying reporting. And they don’t want anybody retaliated against if they report a claim.”

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Traditional safety incentive programs often reward employees for having a certain number of days without any injuries. However, that could discourage employees or their supervisors from reporting an injury, a key concern of OSHA’s.

“What I’m seeing in the workplace with various clients is more of a progressive program of leading indicators vs. lagging indicators,” Enke said.

“It’s recognizing employees for various proactive safety behaviors. That is where I’m seeing more progressive programs or employers moving in that direction, where it’s part of their safety culture.

“They’re getting employee buy-in and ownership, and they’re making employees part of the program where they are involved with hazard indications, reporting near misses, reporting unsafe conditions, even involved with audits, training programs — even taking online training courses.”

Tamara Ulufanua-Ciraulo, director of insurance, Stater Bros. Markets

Tamara Ulufanua-Ciraulo, director of insurance, Stater Bros. Markets

Tamara Ulufanua-Ciraulo, director of insurance at Stater Bros. Supermarkets in San Bernardino, Calif., said that safety professionals need to review their incentive program to make sure the organization is not pushing people to not report.

For example, at Stater Bros., no single store carries the sole burden of its own claim costs, Ulufanua-Ciraulo said.

Costs are now spread out across all stores, and each store has a pro rata share of the cost based on man-hours and how injuries are reported.

“That way, no one injury can hurt a store’s profit and loss statement, which minimizes a manager’s desire to not report,” she said.

For its employees, Stater Bros. rewards them for engaging in safe practices that minimize injuries. The grocer holds annual recognition parties, with raffle prizes of gift cards, gas cards and apparel, and catered breakfasts for certain years of no reported injuries.

But Ulufanua-Ciraulo believes incentives like these don’t result in employees not reporting, because the company has also changed the culture about safety, with bulletins saying that what’s most important is the employee — not the organization.

“We recognize employees’ good intentions by giving them positive recognition for staying safe,” she said. That has helped dispel any misunderstanding about reducing injury costs being the company’s top priority, which leads workers to not report.

Brent Jones, safety officer at Red River Army Depot in Texarkana, Texas, said it comes down to how safety incentives are structured and then communicated to employees: “The right tools in the wrong hands can always be detrimental to the organization.”

“We do offer safety incentives, but we don’t tie them to injury rates or anything like that,” Jones said. “Instead, we reward for good behavior in trying to reduce injuries.”

The depot has an “on-the-spot” incentive program, in which supervisors can recognize employees for going above and beyond the standards.

For example, supervisors wouldn’t recognize an employee for wearing personal protection equipment, “because that’s what they’re supposed to do.”

But if an employee reports potential safety hazards, that goes above and beyond, so their supervisor can hand them a ticket that can be redeemed at the safety office for a gift, such as glasses, coffee mugs, backpacks, coolers, chairs, umbrellas.

These all have the depot’s safety logo on them, which also helps the safety team’s communication efforts by publicizing the depot’s commitment to safety when employees use these items outside of the workplace.

The program only works if there is good communication, Jones said.

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“A lot of programs are poorly communicated and, in my opinion, don’t work,” he said. “There are also programs that actually defeat the purpose, by telling people that they can get paid if they don’t have accidents. But that sends the wrong message.”

If leadership of an organization thinks incentive programs are only there to encourage fewer accidents, then that’s likely going to give OSHA cause to view their incentive program merely as a way to discourage injury reporting, Jones said.

“The message to employees is that they should keep themselves safe so they can go home to their families without injury,” he said.

“That brings it home a little bit with a whole new outlook. How that message is delivered probably means the most, even with an incentive program.”

Katie Kuehner-Hebert is a freelance writer based in California. She has more than two decades of journalism experience and expertise in financial writing. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]