Safety Incentive Programs are a somewhat controversial topic. The Occupational Safety and Health Administration (OSHA) has a history of disliking Safety Incentive Programs, and for good reason. Many Safety Programs are designed incorrectly, which leads to many incidents going unreported. Safety Incentive Programs may not be illegal, but OSHA keeps a close eye on these programs, making sure new trends in the industry do not discourage employees from reporting incidents.
Over the last decade, OSHA has cracked down on safety standards, and created regulations to ensure proper reporting of incidents. Since they cannot be everywhere at once, OSHA must rely on the honesty of reports to understand just how safely workplaces are operating.
Sometimes it might be a little difficult to understand exactly where the line is drawn. The best way to look at it is in terms of “leading” and “lagging” indicators.
Leading indicators are simply events or surveys that can be analyzed at any point to improve safety. They do not follow an accident and can be used to prevent future incidents. Examples of leading indicators are training courses, routine inspection reports, and employee feedback surveys.
Lagging indicators are typically reports that are based off accidents. These tend to be either based off an actual event that had already occurred, or statistical information of the number of incidents in a given period of time. These reports do nothing to stop an event from occurring, and are not always accurate representations of true events. Examples of lagging indicators are accident reports, worker’s compensation reports, and safety statistics reports.
OSHA has made it clear they prefer incentivizing leading indicators over lagging indicators. This is simply because it is far too easy to lie about events in order to be rewarded. On the other hand, incentivizing leading indicators encourages safe behavior. Improved workplace safety is based on the way people act and the amount of personal responsibility they take in regards to safety standards.
Ultimately, OSHA (and essentially everyone) wants to shoot for zero accidents. However, if companies and individuals focus on only the numbers, then they will not get the results they are looking for. Numbers don’t change on their own; you need to look at behaviors of the people involved and hold them to higher standards. That is the only way to be certain of positive change.
How to Turn the Focus on Leading Indicators
Let’s say you work for a company that utilizes dangerous chemicals on a daily basis. In the last year, there have been four spills related to containers falling off shelves, and two of those incidents resulted in employees getting burned. OSHA would not be happy if your company started to incentivizing a decrease in spills. This encourages employees to not report any spills for fear of retribution by either the company or their peers. (It is illegal for a company to punish an employee for reporting an incident, but employees may still be afraid to report it anyway).
What OSHA would be fine with is incentivizing training on proper chemical handling procedures, routine inspections of the shelving units for damage or inappropriately stored containers, and wearing proper equipment to avoid contact with chemicals. These are all leading indicators that through adjusting behavior, create a safer environment with less room for accidents.
On a larger scale, if you work for a shipping company that transports oil, any accident could cost thousands or millions of dollars. It would be incredibly easy to create a program that incentivizes zero accidents, since the ROI is quite clear.
However, you don’t want to focus on numbers when trying to improve safety. Create checklists that need to be completed before transportation, set expectations when drivers are on the road for long hours or stuck in traffic that delays arrival, and proper loading and unloading procedures to minimize risk. There are any number of parts to the process that can be incentivized to encourage employees to make smart choices and take responsibility for their safety and the safety of those around them.
OSHA has it right to believe that incentivizing lagging indicators creates the potential to record incorrect or incomplete information. Since workers are focusing on receiving a reward and not actually on improving their behavior, they have a reason to lie or omit information. This tendency skews the final reports that tell us how safe the workplace is.
While leading indicators, as we mentioned earlier, tell us how to improve and keep up with safety standards, they tend to only benefit the individual organization. The lagging indicators are able to tell the removed parties what the workplace looks like. These reports tell executives and OSHA how safe workers are behaving. If the information is incorrect due to incentivizing the wrong components of a Safety Program, then those executives and OSHA will be unable to accurately understand what they’re working with.
The best thing your company can do is stay away from creating the potential for employees to avoid reporting incidents since it does not nothing to improve safety and it arguably makes the work environment worse. The ultimate goal is not just to improve safety in the workplace, but to minimize costs of accidents and to eliminate injuries and/or deaths to the people who contribute their time and effort to the success of the organization.