As a private investigator, I’ve seen first-hand the costs of workplace accidents, and the challenge of trying to reduce them.

While my role focuses primarily on eliminating fraud, waste and abuse on the back-end of claims, increasingly, employers are looking for ways to address workplace safety issues before they arise, not least through incentive-based schemes.

In this post, let’s look further at those incentive mechanisms, and the factors likely to determine whether they succeed or fail.

Carrots and Sticks

Numerous academic studies have examined how incentive-based mechanisms can drive behavioral change. But we see it just as readily in everyday life: the parent trying to encourage their child to behave; the supermarket loyalty card encouraging us to spend; the health insurance policy that rewards healthy eating.

In a workplace safety context, the main objective and benefit of incentive-based schemes is to cut workplace accidents. This has clear financial and reputational benefits for an organization. But many say the benefits extend further, to improvements in employee morale and engagement.

Of course, not everyone is convinced. Some believe incentive schemes encourage underreporting and cover-ups. Or that they lead to ‘box-ticking’, with employees focusing solely on what is needed to gain a reward, without buying in to the underlying reasons for good safety practices.

Designing your scheme to succeed.

What is clear is that an incentive scheme’s design is central to whether – in the short- and longer-term – it succeeds.

But what makes a well-designed scheme?

One piece of the puzzle

Any compliance scheme is likely to be successful only if it is built on solid foundations: on processes, systems and training that promote compliance and reinforce the importance of workplace safety. But I believe incentive schemes are at their best when they’re part of a package of complementary accident-reduction measures and are integrated into the organization’s broader values and risk management, thereby reiterating to employees that management regards workplace safety as being just as important as other commercial risks.

Head to Toe Engagement

As with much in the modern workplace, ‘top-down’, visible senior-level buy-in is vital.

Vital, but not sufficient.

Rather, successful schemes tend to be those that also involve some element of ‘bottom up’ and give employees themselves a role in the scheme’s design.

This can create a sense of ‘employee ownership’ over the scheme, as well as showing the organization’s willingness to listen to their views. But most critically, it increases the likelihood that the scheme focuses on the things that actually incentivize good practice by employees (not just what management thinks would incentivize them!)

Aligning incentives

Incentive schemes live or die by the incentives they create.

Creating the right alignment of incentives is no easy task, particularly in large, diverse organizations. But a good start is always to ask yourself the right questions:  what behavior are you trying to promote; when will rewards for ‘good behavior’ be given, and what rewards will they be?

The right behaviors

Ask yourself:

• What behavioral changes are needed, and where?
• What incentives need to be created to drive that change?
• Are those incentives the same for all my staff?
• How can I incentivize ‘bad apples’ to meet basic standards, but also reward ‘star pupils’ who go above and beyond? 
• How can I avoid my scheme being ‘gamed’, incentivizing underreporting, or becoming a ‘box-ticking exercise’?

Whether you employ five people or 5,000, it’s these questions that hold the keys to designing a scheme that truly works for you organization.

The right thresholds

Getting the criteria for rewarding behavior ‘just right’ is that classic Goldilocks problem. Too tough and employees may think there’s so little chance of reaching the targets that it’s not worth trying to achieve them at all. Too easy and there’s no real incentive for employees to push beyond that low bar.

The right rewards

Choosing the right reward is vital. If an employee doesn’t – for whatever reason – value the ‘prize’ being offered – what motivation do they have to try and obtain it?

It may be tempting to turn immediately to monetary payments, rather than prizes that not everyone might value (sports tickets, alcohol, etc).  But cash incentives come with their own particular challenges. For example, if employees see them as really just a payment for work (or, worse still, a ‘bribe’) they might actually see the scheme as something negative – just as you might genuinely appreciate a friend’s offer to drive you to the airport, but be somewhat offended if they simply offered to pay for a cab to take you there instead.

That doesn’t mean there aren’t myriad potentially effective alternatives, though. One-off ‘experiences’, prize draws, a donation to the employee’s chosen charity, a paid afternoon off – each could work.

Your best bet? Think about your employees. Listen to what they tell you they value.

Schemes in practice – being clear, playing fair

Even the best designed schemes can come to nothing if implemented poorly.

Two aspects of such implementation that studies suggest are particularly important are transparency and fairness.

Transparency is, in part, about little things like publicly celebrating those receiving rewards. But mainly, it’s about ensuring the scheme is well publicized and that its key parameters are clear to employees – What are my targets? Who decides if I’ve met them? On what basis? –

Fairness, on the other hand, focuses on the almost primal importance we place – inside and outside work – on feeling like we’ve been treated fairly. That instinct makes it critical that any scheme is applied – and is seen to be applied – consistently, and without bias or arbitrariness.  

If employees don’t believe they have a ‘fair shot’ at a reward, it not only disincentivizes them from trying to attain it, it risks breeding a more general resentment that could have far wider effects on employee engagement.

None of this is easy.

Incentives schemes aren’t a ‘silver bullet’. 

But if well-designed, and carefully implemented, they can certainly make their mark. Not just on an organization’s safety incident rates, but on its reputation, its employee relations, and – ultimately – its bottom line.