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Cashing In on Safety

August 1, 1997
Related Topics: Workers' Compensation, Scheduling, Featured Article, Compensation
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From the moment employees walk in the door, a company is responsible for their safety. But it's not enough just to hand workers hard hats or safety goggles and expect they'll be safe forevermore. Keeping people from being injured at work first requires companies to have a comprehensive safety training effort. And, increasingly, it also necessitates that companies provide constant reminders to employees that their organizations take their safety initiatives seriously. That means firms need safety recognition programs -- giving people tangible rewards for staying safe on the job.

And the reasons for safety recognition programs are clear: Not only is a company legally and financially liable if employees are injured on the job, but it also loses business for every hour, and every day, that workers can't perform their jobs. That's why recognizing employees for good safety practices is becoming a crucial business strategy, and why human resources and safety professionals are becoming more savvy in what motivates employees to be safe at work.

"Part of what's driving safety recognition is [business] has started to become more sophisticated in measuring what sorts of safety initiatives have an impact on the bottom line," says Vincent Alonzo, executive editor of Incentive magazine based in New York City. Companies are finding that investing in reward strategies to boost safe work practices translates directly to a company's profit margin through fewer lost workdays, fewer workers' compensation claims and less downtime in general.

Although the number of lost workday cases due to injury has steadily decreased from a high of 4.3 per 100 full-time workers in 1979 to 3.8 cases per 100 full-time workers in 1994 (the most recent figures available from the U.S. Department of Labor Occupational Safety and Health Administration -- OSHA), keeping people safe on the job has remained an important business issue for human resources and safety professionals. The good news is that it also indicates safety programs, for the most part, are working.

Companies large and small are seeing the tie-in between safety recognition programs and reduced workers' comp injuries. "The rule of thumb is for every dollar a company spends on safety recognition, it saves about $10 in workers' compensation injuries, whether the company's self-insured or insured through an outside firm," says Stan Phillips, president of D&L Associates Inc., an employee-recognition firm based in St. Cloud, Minnesota. To turn a phrase, a dollar spent can be more than a dollar earned.

Downsizing may be causing safety problems. But recent business and economic trends also may be contributing to an increase in employer interest in rewarding employees for safe behavior. One of those trends is downsizing. Managers at downsized firms tend to ask employees to work longer or more hours, putting individuals at higher risk for accidents or injuries because the likelihood for problems increases proportionately to the number of hours spent on the job. So employees need to be ever more vigilant and conscious of what they're doing while on the job. "That's where an incentive program or a motivational initiative can play a role in heightening people's awareness," says Alonzo. "Because if there used to be 10 people on a line and now there are only seven, those people are being asked to step up what they had previously done. That's a recipe for an accident."

The likelihood for safety disasters can also increase if downsizing has disproportionately taken more experienced workers out of the workplace. "If the resulting workforce is younger and less-experienced, then it's expected that rates will go up because injury rates are pretty much a function of experience," says Alan Hoskin, manager of the statistics department at Itasca, Illinois-based National Safety Council, a nongovernmental, nonprofit organization interested in preventing safety-related problems for people and the environment.

Explained simply, the longer a person has been in a certain position, the better that person knows the job, and the less likely it is that the individual will do that job improperly. So, according to Hoskin's premise, if downsizing is accomplished by taking experienced workers off the job, then the rate of safety violations will go up. If a company downsizes by letting the last hired go first, then rates will likely go down. "Although, if the rest of the workforce is left doing the same amount of work that the original workforce did, then who knows what's going to happen?" he says. Those are issues that HR and safety professionals are struggling with.

At Ford, there's an emphasis on teams. So that's how Ford trains and rewards employees for safe work practices.

Different approaches yield similar results. How to stop the flow of accidents and injuries may depend first on drawing employees' attention to the issue. Just implementing a safety-awareness program increases the chances that employees will be safe. "Safety first" is a well-used motto. And rightly so. "No matter what type of program you have, you have to have a safe work environment," says Phillips. And senior managers must support the program. "We find that once there's a program like this, where everyone's [focused on safety], people are much more attuned to noticing an oil spill on the floor and cleaning it up or picking up a disheveled warehouse," he adds. It's clear that companies can't ignore safety as an issue, and recognition programs seem to be the best way (besides training) to get employees thinking and acting safely. But there are different approaches to safety recognition.

Some HR and safety professionals prefer quarterly programs that reward individuals for achieving safety goals. Others set six-month or yearly goals for their workforces. Or, they may set a certain number of hours-worked-without-accidents goals. When an individual achieves the preset marker (100 days without an accident, for example) he or she receives a company gift such as a flashlight or a duffle bag. Budgetwise, even a small company can purchase these types of inexpensive items -- such as a thermos, a cooler or a first-aid kit -- to give as rewards at a cost of only $4 to $5 per unit. Giving an employee a small item like this (especially if the company's safety motto or company logo is imprinted on it) will help perpetuate the company's safety ideal. The employee sees the item on his or her desk or locker and thinks, "Oh yeah. I need to be careful out there."

However, giving that same amount of money to an employee wouldn't have the same impact, because it's such a small sum. Safety experts agree that the worst safety reward is money. "The easiest [reward] to use is cash, but it's also the worst item [to give] because it has no lasting appeal," says Phillips. "Once an employee gets it, it's gone." And besides that, it's taxable.

A team approach to safety. At Ford Motor Co. based in Dearborn, Michigan, safety is a corporatewide priority. "Safety is a critical element of the workforce relationship," says Greg Anderson, manager of health and safety programs with responsibility for joint programs and union affairs for Ford's U.S. divisions. "It's the responsibility of the employee to perform his or her tasks in a safe manner and of the supervisor to provide the necessary instruction and equipment." The automotive giant has safety professionals at each level of the organization, culminating with a safety committee at the headquarters site that Anderson and another union official oversee. Both union and company management professionals are responsible for safety at every level.

At Ford, there's an emphasis on teams. So that's how the company trains and rewards employees for safe work practices -- at the team level. Every quarter, the company gives a RISE (Recognition of Innovation Support in Excellence) award (a crystal memento) to the team that has demonstrated the greatest improvement in safe work practices or the most innovative approach to getting employees to be safe on the job. At year-end, the company holds a safety conference, and one of the four teams that wins a quarterly RISE award then wins an annual award. The team that wins the annual award also wins a $1,500 grant. The winning team usually uses the money to send workers from the group to a special training seminar or to hold a local recognition celebration.

Anderson says Ford doesn't reward individual team members for safety for this reason: "We don't want to make health and safety a competitive exercise because it's something that's a person's right -- to [have] a safe work environment, to be able to go home healthy," he explains. So the organization doesn't emphasize things like how many hours a team goes without an injury. The reason is that if a team were to come close to achieving a certain number, its members might feel pressured not to report an accident or an injury that should be reported -- which is mandated by law -- just to get a reward or a prize. "We encourage people to report problems. We look at near misses. We study our trends, because we feel the bottom line is to do the right thing, which is to keep people healthy," says Anderson.

Overall, Ford managers emphasize continuous improvement in safe workplace practices rather than tracking the total number of accidents and lost workdays at the national level, although Ford's plant managers at the local level do. In this way, each plant runs its safety reward program like a small or independent company. Because Ford's operations -- and safety programs -- are so decentralized, the emphasis stays where it should be, on employees and on keeping them safe where they work.

Rewarding employees for safety goes a long way toward keeping accidents and injuries at a minimum.

UPS rewards individual drivers for safety. Unlike Ford, United Parcel Service (UPS), based in Atlanta, Georgia, primarily rewards individuals rather than teams for safe work practices. That's because UPS's workforce is chiefly its 70,000 drivers nationwide. And those drivers perform their jobs as individuals, rather than in teams.

UPS has been rewarding its drivers for safety since 1923. (See photo at left.) But 12 years ago, the organization launched a special recognition program which honors UPS drivers who achieve 25 years of continuous safe driving (defined as having no avoidable accidents). Every year, all of the drivers who achieve a 25-year safety record participate in a celebration dinner and are inducted into the company's Circle of Honor. As Circle of Honor members, employees receive a camel hair jacket (with a detachable Circle of Honor patch), which the company purchases from Rodes Professional Apparel in Louisville, Kentucky, (approximate cost is $200). Members also receive a special plaque commemorating their achievement.

So far, 2,700 drivers have reached Circle of Honor status. And for the past three years, UPS has recognized those individuals by publishing all their names in The Wall Street Journal and USA Today.

Interestingly, the company doesn't invest in its Circle of Honor program specifically to save money on medical costs or workers' comp injuries, although managers of the program know it does have that effect. In fact, the organization boasts a record of 0.82 accidents per million miles (registered with the Department of Transportation). That means the company's drivers travel a million miles, on average, without having an avoidable accident. And some drivers never have had an accident.

"Why do we honor our drivers? Because it's the right thing to do," says Jerry Bolles, corporate fleet safety manager responsible for the company's entire inventory of vehicles. "It's such a darn big accomplishment. Just imagine a driver delivering in New York City for 25 years without an accident, or someone delivering in Fargo, North Dakota, where he or she has got wild animals and snowstorms to worry about," adds Bolles. An interesting tie-in to this program is that it simultaneously rewards employees for long-standing service in addition to good safety practices.

But UPS drivers don't have to wait 25 years to be recognized for safe driving. The company administers a safety-reward program for all drivers who reach benchmark safe-driving records at five-year increments. Drivers choose their gift from a catalogue, and gifts become increasingly more valuable (from a wristwatch to a console TV, for example) as drivers log more years of safe driving. Awards are always given at a ceremony -- even if it's a small one -- with all the employees' peers joining in. Employees appreciate the individual attention and the program is well-received.

No matter which safety-reward approach is chosen, as the above examples clearly illustrate, rewarding employees for safety goes a long way toward keeping accidents and injuries at a minimum. Businesses that invest in the strategy of keeping safety in the forefront of workers' minds will probably have healthier employees overall. That's an idea worth cashing in on.

Workforce, August 1997, Vol. 76, No. 8, pp. 53-57.

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