Many safety professionals who are curious about safety incentive programs have lingering doubts about them. Since their rise to popularity in the 1970s, incentive programs have had a hot and cold relationship with OSHA. Google the phrase “safety incentives,” and you’ll find articles saying they simply cannot work and others that tout them as an unbeatable tool for improving employee performance. So what does OSHA think about incentive programs, and how can you choose one that best suits your safety goals?
Did OSHA ban incentive programs in 2012?
In 2012, OSHA published a memorandum on the subject of “Employer Safety Incentive and Disincentive Policies and Practices,” which identified and discussed employer policies that could potentially threaten their employee's right to report injuries. The purpose of the memo was to provide guidance to safety professionals and help them identify policies that could discourage employees from reporting injuries, putting themselves and their employer at risk.
The ability to report injuries and illnesses is a protected employee right. If a company makes employees afraid to report injuries because they fear discrimination or retaliation, then the safety of the entire workforce is in jeopardy— not to mention, it can put the employer in violation of OSHA’s recordkeeping regulations. Thus, then deputy assistant secretary Richard Fairfax felt it necessary to outline four of the most most-common offending policies. They included:
Taking disciplinary action against employees injured on the job, regardless of fault.
Disciplining employees because the way they reported their injury/illness violated the employer’s reporting policy.
Disciplining an employee who was injured or became ill as a result of violating an employer’s safety rule(s), especially if those rules are only enforced when accidents happen.
The fourth and final section concerned incentive practices that could discourage employees from reporting injuries. The two practices Fairfax cited are:
1. Disqualifying employees from prize drawings if they were injured within a specific. period.
2. Rewarding teams of employees with a bonus/reward if no one on the team is
injured over a specific period.
The memo goes on to say that such incentive practices could be considered unlawful discrimination and put employers in violation of OSHA’s recordkeeping regulations. In both examples, employees have a clear incentive to not report an injury or illness. No one likes to miss out, so employees may rationalize that reporting their injury or illness isn’t worth risking their reward. And when a team’s reward is dependent on each member being injury-free, there’s enormous peer pressure to “take one for the team.”
The document was widely received as a condemnation of safety incentives altogether. As a result, such programs became a taboo topic in the safety industry for many years. The public's interpretation was so overwhelmingly negative that OSHA issued a clarification of their ruling in 2016 that explained that the use of safety incentive programs was not prohibited under 29 C.F.R. § 1904.35(b)(1)(iv).
The Department acknowledged that incentive programs can be valuable tools to increase safety and that many employers have successfully implemented incentive programs. But, like any other safety and health program, there are nuances and a careful examination must be made of their implementation to ensure no standards or worker's rights are violated. According to OSHA's website, if an employer withholds a reward because (1), a worker sustained an injury but did not violate any legitimate workplace rules, or (2), a worker was injured as a result of violating a safety rule but the rule is only enforced when an injury is reported, the employer would be violating standard 1904.35(b)(1)(iv).
Clearly, not all safety incentive programs will improve your safety culture and keep your workplace compliant. There’s a key difference between the kind of incentive program that helps you stay OSHA compliant and the kind that could make your workplace rife with underreporting and injury hiding.
The Difference Between Leading & Lagging Indicator Incentive Programs
Incentive programs are typically based on leading or lagging indicators. According to OSHA, lagging indicators measure the frequency of injuries, illnesses, and fatalities over a period of time, whereas leading indicators are proactive and preventative measures that prevent injuries and illnesses.
The kind of programs OSHA described in the 2012 memo are lagging indicator incentive programs. These programs reward employees if they report no injuries, illnesses, or accidents within a predetermined time frame. But these systems can exacerbate existing issues within the workplace and violate OSHA's recordkeeping and reporting standards. Lagging indicator incentives can increase the risk of:
Underreporting accidents and near-misses
Injury hiding
Low employee morale
Because lagging indicators incentivize results, it's easy to create the appearance of reduced injuries by covering up accidents or hiding injuries— which is exactly what prompted OSHA to sound the alarm on incentive programs. Instead of incentivizing safety, lagging indicator programs can unfairly penalize workers for reporting injuries. In addition, employees who are disqualified get no benefit from these programs, which can damage their morale and willingness to participate in future safety initiatives.
Lagging indicators also fail to take into account the processes and behaviors that lead to accidents, so any improvements are often temporary. Once the incentive period ends, injury rates often return to pre-incentive levels. These poorly designed programs are largely responsible for the conflicting reputation of incentive programs as a whole. But there’s a better choice for those who want to increase their safety performance without underreporting or injury hiding.
Leading indicator incentive programs can successfully strengthen your safety culture without underreporting or injury hiding. Leading indicators are proactive and preventative measures that help to stop injuries and illnesses before they happen. Activities like performing safety checks, participating in training courses, and reporting hazards and near-misses are all examples of leading indicators.
Interestingly, leading indicator programs are the kind of incentives OSHA described in the 2016 memo. These programs reward employees based on their performance and engagement with specific safety measures. Some common behaviors our clients incentivize include:
Wearing the proper PPE
Completing voluntary safety training
Performing safety checks
Reporting hazards and near-misses
This is in harmony with the kind of incentives OSHA encourages employers to consider, which issue rewards for:
Worker participation in safety program activities and evaluations
Worker completion of safety and health training
Reporting and responding to hazards and close calls/near misses
Safety walkthroughs and identification of hazards during safety walkthroughs/inspections
Conformance to planned preventive maintenance schedules
Compliance with legitimate workplace safety rules
Unlike lagging indicator incentives, which can increase underreporting, leading indicator incentives can increase reporting and provide valuable data to your team. Adding a well-designed incentive program to your safety & health initiatives can increase engagement and productivity while decreasing your accident rate.
Creating a recognition-rich environment and a strong safety culture is easier with an incentive program built for you. Stay tuned to learn how to choose the best incentive program for your employees.
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