Looking to reduce operating costs, reach company safety goals and retain hardworking talented employees? Of course, who isn't? Launching a safety incentive program is a great tool to help achieve these goals.
Incentive programs strive to improve employee engagement, reduce accidents and injuries, reinforce safe work practices, promote safety at work and at home, retain good employees and generate a positive return on investment (ROI). ROI can be calculated based on direct savings and estimated indirect savings (which include lost time, lost productivity, low morale, low sales and poor retention) using the following formulas:
Direct Cost Savings = Total Claims Reduction x Actual Average Cost per Claim – Program Costs
Indirect Savings = 2.5 x Direct Cost Savings – Program Costs
Quarterly performance awards for achieving zero preventable accidents, injuries or violations are an example of a safety program. To calculate the cost, estimate $25 per award x the number of quarters x the number of eligible employees. Another type of program rewards employees for safety suggestions and their implementation. A good starting point for a valid suggestion would be an award valued at $50. You may want to look at doubling that for suggestion implementation. Management may also use a discretionary award or a "spot award" to recognize staff that goes the extra mile to get the job done.
Common mistakes of an incentive program include lack of communication, plus unclear goals and performance expectations. To combat that, create posters, letters and vouchers to launch your program. Invest IT resources to talk about the program on your company website or intranet. Tangible awards are more valuable and have a longer-lasting impact than cash, which is perceived to be part of total compensation. Exceedingly high-valued awards should not be used; rather there should be a distribution of target points geared toward the audience. Group rewards are not as effective as individual awards. Programs aimed toward individuals have been shown to increase performance by 27%.
Invest in a great safety incentive program, reward your hardworking employees and enjoy the lower overall operating costs. Everyone likes to feel appreciated and acknowledged.
For more information on setting up an effective incentive program, check out EZ Facts No. 114, Safety Incentive Programs.
Click here for a selection of safety incentive items from Lab Safety Supply.