...from having their own models. … I [would] venture to guess that the industry as a whole over the last 10 to 20 years has developed more proactive systems than any regulatory body has in keeping people safe.”

The movement against incentives flies in the face of compelling statistics that favor such programs. Vendors that sell safety incentive programs tout the success seen by their clients. Safety Jackpot, a program offered by Peavey Performance Systems, Kansas City, Mo., claims that its construction clients realize an average accident reduction of 57%. The program provides its clients with scratch-off “game cards” that can be handed out to employees in recognition of meeting safety goals. The cards carry points that can be redeemed for merchandise from a Safety Jackpot catalog.

The Upside of Incentives

Broader research strengthens the case. A 2004 study by Paul Goodrum and Manish Gangwar of the University of Kentucky’s College of Civil Engineering suggests that, on average, companies with an incentive program see improved safety results, while those that don’t are more likely to falter.

Over a three-year period, the study found that companies with an incentive program reported that workday incidence rates dropped by 44.16%. By comparison, those without such programs saw a 41.84% increase during that same period. The study also concluded that companies with incentive programs saw better improvement in recordable OSHA incident rates than those without programs.

Damian Lang, CEO of Lang Masonry, Waterford, Ohio, credits incentive programs with cleaning up his firm’s safety record following two bad accidents that occurred in the early 1990s. The company uses a system that rewards people in the field as well as management. At the end of each quarter, craftspersons can earn up to $100 each, as long as they have minimized accidents and there are no OSHA fines. Each violation reduces the reward.

Workers are monitored by safety committee members, who are fellow craftspersons. Committee members earn up to $300, if there are no OSHA fines and the firm’s safety manager doesn’t find violations. The safety manager also is eligible for a cash incentive. If OSHA levees a fine, 10% of the amount is reduced from the manager’s incentive. “Everyone has a stake in making sure that nothing happens on that jobsite,” Lang says.

Lang credits the program with helping his company avoid any serious accidents in more than 15 years. Lang sees incentives as a win-win situation in which the company realizes positive safety results and employees get needed recognition for their actions. “Without an incentive plan, if someone on-site does something unsafe, nobody cares. With an incentive, if someone does something unsafe, the other guys will say, ‘I don’t want you to get hurt. If you do, it affects our incentive.’ ”

Other firms say such programs are not needed to improve safety. Harvey Hammock, vice president of safety at Industrial Electrical Services Inc., an electrical and communications contractor based in Houston, says he does not favor “paying someone for not hurting themselves.” Instead, the company promotes safety by pushing the fact that unsafe practices affect other workers and their families. Further, managers are motivated to make sure the message is received. Although the company eschews incentives for craftspersons, compensation for branch managers can be affected significantly by poor safety performance.

The results have been dramatic for Industrial Electrical. In 2000, the company’s total recordable incident rate was 9.732, well above the national average of 6.3. Today, that rate is 0.62.

Other companies see merit in incentive programs that are focused on leading indicators. Kristi Barber, vice president at GBA Inc., a Rapid City, S.D.-based contractor that averages $12 million in annual revenue, says incentive programs have helped the company reduce its experience modification rate, or EMR, and lower incident rates as well as medical expenses since it began the program in 2000. The firm favors rewards based on leading indicators, giving out tools as door prizes at safety talks and handing out gift cards to workers who report near misses.

Despite OSHA’s recent scrutiny of incentive programs, Barber credits incentives with reinforcing her company’s safety culture. “There are bad apples out there, and OSHA takes the stance that we are all bad apples,” she says. “I don’t agree with that. There are a lot of good companies out there who have their heart in the right place. They care about their safety. It’s not just about the numbers.”

A much bigger company, DPR Construction, Redwood City, Calif., takes a mixed approach to incentives. Health and safety director Rodney Spencley says that, until 10 years ago, the company focused its incentives on injury rates, but now its primary efforts are geared toward rewarding actions that help prevent injuries.

Still, the company has not abandoned the concept of rewarding positive results. On some projects, the company holds barbeques to recognize outstanding safety leadership. Last year, the company recognized one of its craftsmen, Troy Metcalfe, for working 40,000 injury-free hours—the equivalent of 17 years. As a thank you, he was given 10,000 shares from DPR’s employee stock program. In 2004, Metcalfe received a Ford F-150 truck in recognition of achieving 30,000 injury-free hours.

“Troy is actively engaged in the safety culture,” Spencley says. “He supports the culture. … He’s a great role model.”

The concepts behind incentive theory run deep in the business world. Compensation packages based on performance factors are commonplace on Wall Street and in many industries. The promise of a paycheck motivates staff to go to work, but an incentive that is based on specific goals can sharpen an employee’s focus and accelerate output. When it comes to safety, however, some experts warn that tying an external motivator, such as money, to a concept that should be instinctual— such as protecting oneself—can be dangerous.

Ron Prichard, president of Arcanum Professional Services, a safety and management consulting firm in Plainfield, Ind., says safety programs are attractive to employers because they offer a “feel good” approach. “People do these programs...