The Secrets of Successful Recognition/Incentive Programs by Doug Toft Reprinted from Safety & Health Magazine Synopsis: Though successful programs differ widely, their underlying processes are the same. Successful companies using these programs ask questions that lead to clear goals, long term follow through, and meaningful incentives. These factors can be more crucial than the type of incentives used. Once a manager decides to start a safety incentive program, he is faced with a bewildering array of questions. The goal to promote safety on the job seems clear cut. Yet one company may offer to their employees who go for a quarter with no lost-time injuries a steak dinner, another offers cash, and yet another offers gift certificates to Wal-Mart. So, with such an array of options to choose from, the question remains: What incentives will work for my company? Although not necessarily the most important question, it is never the less a powerful one. Often focused on by managers new to incentive programs is the content of the program, or what kinds of incentives to offer. Though this question is key, it's also crucial to ask the "how questions."-more importantly, what behaviors will be rewarded. Such questions reveal the processes that drive successful incentive programs. Though these programs differ widely in particulars, their underlying dynamics are surprisingly consistent. Incentives - Everything from Bananas to Boats Think for a moment on all that the term "incentive" entails. It could be any item that people deem valuable. Bob Nelson illustrates this same point in his book 1001 Ways to Reward Employees. He relates the story of a situation that occurred at the Hewlett-Packard Company. A team of workers had been plagued with a problem for weeks. An engineer came across the solution to the problem, and, overcome with enthusiasm, he burst into his manager's office and blurted out the solution. Thrilled by this idea, the manager offered the only reward he could find at the moment-a banana left over from his lunch. The incident started a trend, and the Golden Banana Award is now a coveted employee prize. Though cash awards are an obvious choice for incentives, some safety managers also use gifts such as: CD Players, electronics, pens, keychains, fishing boats and more. For some incentives the price tag can run into five figures. Yet, others such as a compliment or a pat on the back cost you nothing. Michael LeBoeuf, a management consultant, lists ten basic categories of employee incentives. Besides money, these include:      

Recognition Time Off Stock Ownership Special Assignments Advancement Increased autonomy

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Training and Education Parties and Other Fun Activities Prizes

Safety managers can narrow down this list and choose incentives that can change an employees behavior by asking these three questions. 1. How do we set goals for our incentive program? To say that safety incentives should relate directly to safety goals is a truism. Yet goals can be conceived in a variety of ways. Companies that are successful with incentive programs have learned to set goals carefully, knowing that how you word a goal may lead to different results. Raising safety performance is an obvious purpose of incentive programs. Given that overall goal, employees can receive incentives based on many different criteria: days without recordable accidents, months without lost-time injuries, decreases in workers compensation claims, and more. Any of these results could be achieved with a successful program, each having a different impact on a company's bottom line. Alternately, many firms now choose to reward safe behaviors, as part of the growing trend toward behavioral safety techniques. Bill Sims, Jr. is President of The Bill Sims Company, Inc. in Columbia S.C., a company specializing in employee incentive & recognition programs. Sims says, "In the program focused on proactive behavior, companies reward a number of "upstream behaviors" that ultimately produce a good safety record. Some of these behaviors are making safety suggestions, attending safety meetings, assisting inspections, etc. These programs produce solid results in long term safety improvement. Olin Chemical reported they had only 60% attendance at safety meetings. In the first month of our incentive program, the figure jumped to 100%!" Sims makes promoting safety awareness, generating safety suggestions and recognizing employees for safe behavior top priority in the incentive programs he creates. He puts the emphasis on the rules of the program and how that motivates people rather than on the gift awards. Sims states that the gift award is certainly the catalyst, but most of the emphasis is on how the program works to build teamwork and motivation. One basic choice is between change or maintenance. Some companies may want to maintain safety records that are consistently excellent, while others strive to cut down on losses due to injuries and accidents. A Minnesota firm that processes turkeys, Heartland Foods, aimed for a big change. "We had a high level of people who were on workers compensation-employees out on a long-term basis," says Marie Huber, safety health and training director. "We were very careful to avoid any injury hiding, and worked with Bill to develop a set of rules that would achieve this. Now our numbers are way down." Heartland went from 285 lost-time injuries to 14 in only 18 months, using an incentive program developed by Sims. The program has more than paid for itself. Other companies slant their safety goals toward maintenance. This is true for W.R. Grace, a specialty chemical manufacturer in Atlanta, and also using the Sims Star Performer Buck Program. Incentives help to sustain a record that is already impressive, says Vic Anapolle, plant manager: "We went eleven years without a lost-time accident-a million-and-a-quarter employee hours. Our recordables are typically one or two a year for a population of about 70 people. We would hope that incentives programs would drive our numbers even lower."

One goal that fits in almost any case is that of raising safety awareness. An incentive program can work simply by forcing people to pay attention. For example, Bar-S Foods Company in Arizona cut its workers compensation costs in half between 1988 and 1993. The company's main objective was to carefully record lost-time accidents and watch the numbers closely during that time. In a similar way, Heartland employees use "close call" forms to report situations on the plant floor that could lead to recordable accidents and injuries. With an incentive program in place, says Huber, "all of a sudden there is a reason to pay attention, because you're going to get something back for noticing." 2. How can we get the most "bang" for our incentives buck? Commonly assumed by managers is that an extra $25, $50, or $100 added to an employee check would be the strongest incentive for employees. Yet, that bonus added to an employee's check can quickly vanish, eaten up by taxes or mundane expenses. Many successful programs rely on low cost gifts with high perceived value for this very reason. Sims says that gifts that reinforce corporate identity can spark high interest. One of Sims' clients, a trucking firm that transports new cars, centered its program on a one-of-a-kind jacket imprinted with a special crest. To win the jacket, employees had to drive for three months without an accident. "On the last day of the contest, one driver backed his truck into a light pole and damaged the back window of a new car," Sims recalls. "He asked if he could buy that car. He didn't want to lose out and be the only guy at his terminal without a jacket." W.R. Grace had a similar experience. Anapolle notes that no employee is going to get rich through the company's incentive program. Instead, the program's goals are to promote safety awareness, generate safety suggestions, and recognize employees for their safe behavior on a regular basis. A related issue is how to distribute incentives. Sims advises against contests that reward only a few people and reinforce the view that safety is a matter of chance or luck. Heartland Foods and W.R. Grace instituted lottery style programs that could make everyone a winner. For example, employees who meet safety goals can receive scratch-off tickets called "Star Performer Bucks." Employees can redeem the buck immediately if it contains matching symbols. If not, employees may still accumulate bucks and redeem them later for gifts or other awards. 3. How can we sustain the incentives programs? Willingness to experiment and learn by trial and error is involved in creating a successful incentive program. One way to reduce the learning curve is find out what other companies are doing and consult the recent literature on incentives (see sidebar). Anapolle sees advantages in designing a cohesive program and then giving it time. "We took a lot of separate programs that were giving out premiums and various small cash awards. Then we added up what we were doing and said, let's roll these all into one program and see how that works for the next three or four years." Consistency and follow through are the key according to Huber. "You can't start an incentive program and then walk away and expect that it's going to run itself. You have to have safety meetings and give away incentives every month.

Programs work when you implement employee suggestions and correct safety problems as they happen." Both Huber and Anapolle agree that the incentive program should be changed periodically so that it stays fresh. Even a minor change such as a new gift item may be enough to sustain your employee's interest. Keep the focus on recognition and safety. Among the "how questions," perhaps the most important is how to keep the focus on fundamentals. Nelson found that incentive programs work whey they tap into the reward that employees favor the most - an immediate on the spot recognition of a job well done by their manager. Or in other words, a pat on the back. He quotes Mary Kay Ash, founder of Mary Kay Cosmetics, on this point: "There are two things people want more than sex and money...recogniton and praise." Huber and Anapolle, along with others who've succeeded with incentives, also report that these programs are simply the "icing on the cake" - one part of an overall program that emphasizes safety at every point from hiring to training and daily supervision. By asking "how questions" a safety manager can restore the needed perspective and lift his eyes to this larger horizon. Sources: Vic Anapolle, plant manager, W.R. Grace; Marie Huber, safety health and training director, Heartland Foods; Michael LeBoeuf, professor of management, University of New Orleans; Bob Nelson, management consultant and author; Bill Sims, president, The Bill Sims Company. Callouts: Some incentives, such as a pat on the back and a compliment, cost nothing. An incentive program can work simply by forcing people to pay attention. Incentive programs are simply the "icing on the cake" - one part of an overall program that emphasizes safety at every point from hiring to training and daily supervision. Sidebar Article: Guidelines for a Successful Incentives Program An Emerging Consensus Safety managers don't need to start from scratch when they are creating an incentive program. There is an extensive amount of literature on incentives that is based directly on the experience of companies with successful programs. Despite the diversity in this literature, a few common themes dominate. Some examples follow. Decide what behaviors to reward - and reward them consistently Michael LeBoeuf, a management consultant, suggests that anybody planning how to reward employees begin with this one question: What behaviors do we want to reward? The thesis of his book The Greatest Management Principle in the World is that "the things that get rewarded get done." It sounds simple enough, yet day to day practices and unwritten codes of conduct might reward undesired behaviors. For example, an official goal might be company loyalty; yet the highest salaries may go to employees most recently hired; or to those who threaten to quit.

Offer meaningful incentives Meaningful incentives are tied to specific behaviors or results. These incentives are also timely and appropriate to the level of accomplishment. "An employee who completes a two-year project should be rewarded in a more substantial way than the one who simply does a favor for you," writes Bob Nelson in 1001 Way to Reward Employees. Give it soon after the goal has been met to boost the impact of the incentive. Customize incentives to your company Beware of the "canned" incentive program, because what works for one company might not work for yours. Company cultures differ greatly; that means successful incentives differ also. Consider some of the following demographics before choosing incentives: age, rate of turnover, geographic location, and racial and ethnic diversity. Nelson also suggests distributing a "reinforcer survey: to find out the type of rewards that your employees actually want. Incentive programs thrive on employee input. Keep it simple Joan Klubnick, author of Rewarding and Recognizing Employees, notes that managers and supervisors often fail to give recognition for a simple reason: They don't know what to say. Klubnick offers a "recipe" for recognition, or basic guidelines to use on a daily basis:     

Thank the employee by name. State specifically what the employee did to earn your recognition. Explain how you felt about this behavior. State how the behavior added value to the company. Thank the person again by name.

Sources: Bob Nelson, 1001 Ways to Reward Employees (New York: Workman, 1994). Joan P. Klubnick, Rewarding and Recognizing Employees: Ideas for Individuals, Teams, and Managers (Chicago: Irwin, 1995). Michael LeBoeuf, The Greatest Management Principle in the World (New York: Putnam's, 1985). Bill Sims Jr., president, The Bill Sims Company, 102 Lake Vista Drive, Chapin, SC, 29036, 800-690-1860.