Finally, the smoke begins to clear on Safety Incentive programs … or does it?

Over the last four years, there’s been a lot of confusion over OSHA’s stand on Workplace Safety Incentive Programs.

Early in 2016 OSHA proposed a final rule that seemed to prohibit almost any workplace safety incentive program.

Organizations of all sizes and across industries responded to the proposed change. Predictably, companies that used safety incentive programs liked them and wanted to keep them. One of the most powerful responses came from the Great American Insurance Group.

Great American has insured over 1,000 companies over 23 years in challenging classes of business–such as foundries, sawmills, and industrial fabricators.

They cited remarkable results. The companies they insured that had safety incentive programs had:

  • 39% lower costs, and
  • 58% fewer catastrophic claims (defined has claims greater than $475,000)

You can read their comments here.

But anyone who’d been following OSHA starting with the Clinton administration could see the handwriting on the wall.

Labor organizations had been strongly in favor of eliminating all incentive programs, especially any incentive linked to a BBS (Behavior Based Safety) process. It’s no surprise that they’ve historically resisted any effort to reward their member’s individual achievements. They’d much prefer to negotiate an incentive that rewards everyone exactly the same thing.

Unfortunately, that type of group incentive removes individuals’ motivation to go “above and beyond” and quickly becomes a benefit to be bargained over.

On May 12, 2016, OSHA published a final rule that seemed to pretty much outlaw any Workplace Safety Incentive program.

But, in early 2017 a new administration arrived in DC and many safety professionals believed the rule would be reversed.

I was eating lunch with a safety director at a large manufacturer who had started a cash-based incentive program tied to lagging indicators like the number of OSHA Recordable Injuries and Lost Time Injuries.

I was suggesting that he instead reward leading indicators like the number of safety activities engaged in by a worker. My argument: “You don’t want your incentive program to upset OSHA”.

He told me straight up: “We’re confident the new administration is going to roll this back. We’re not going to change anything.”

He wasn’t the only safety director with a lagging indicator incentive program that wasn’t going to change.

But was he on solid ground not just with OSHA, but with current thinking in the safety profession?

To be continued …

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