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Should You Cancel Your Incentive Programs During the Recession?

Keep in mind, an employee with a positive attitude is just as contagious in improving morale in the workplace as a disgruntled employee is in destroying morale.

The economy is bad, business is down, and companies are laying off employees in record numbers. They need to cut expenses. An easy target is the company's incentive program. It doesn't produce goods, make sales calls, clean the building, or repair equipment. It just costs money the company doesn't have. Or does it?

You are asking your dramatically reduced workforce to do two, three, four, or even five jobs. There is no additional pay, so suck it up, work extra hard, and be happy that you have a job. And you know what? They will. They will, because they are your best employees, and they won't let you down.

They also will remember how you treated them during the hard times. If you take them for granted, work them hard, and don't reward them, they also will work hard on their job search. And as soon as the economy improves and companies start hiring again, they will be gone — and you will be left with your less productive workers. Incentives do not have to be extravagant. They need to be sincere, targeted, and presented in a way to make the employees feel engaged. Being overworked adds stress to the employee, mentally as well as physically. The mental stress is worse — and not only is the employee under stress, but his or her entire family.

Low Cost, or No Cost, Morale Boosters

If your company cannot afford a major incentive program during the recession, that doesn't mean you cannot run an incentive program. Be creative. Have pizza day, have a family picnic, and have your upper managers walk around to thank the family members for supporting their loved ones who are working all of the extra hours and carrying an extra heavy load.

Tell them you appreciate what they are going through and that, when things turn around, they will be rewarded for their extra effort that helped the company survive. Have some fun; there are all kinds of studies on the value of laughter and health. Having a "laughter break" each day helps to reduce the stress.

Upper management should walk around the workplace, putting into practice the old Tom Peters theory of managing by walking around from "In Search of Excellence." The managers can tell the employees they are appreciated and ask for their advice on ways to do things better.

Recognizing good ideas and effort in front of their peers make the workers feel special. None of this costs much, and in some cases, it costs nothing at all financially. But having the employees feel appreciated and engaged is, to steal from Mastercard, priceless!

Keeping your employees engaged and giving them the feeling of being part of the team and appreciated will help them with the mental stress and will improve their outlook. An employee with a positive attitude is just as contagious in improving morale in the workplace as a disgruntled employee is in destroying morale.

That is the human side of why a company should not eliminate safety and wellness programs during a recession. How about the financial side? The 2008 Liberty Mutual Workplace Safety Index stated that the estimated direct U.S. worker's compensation costs for the most disabling workplace injuries and illnesses were $48.6 billion.

Key findings for injuries and illnesses requiring days away from work in 2008 included this: From 2007 to 2008, the number of injury cases for construction laborers decreased 8 percent, and those for retail salespersons decreased 12 percent. During the same timeframe, the number of cases remained unchanged for nursing aides, orderlies, and attendants; non-construction laborers; and truck drivers. However, the rate for heavy and tractor-trailer truck drivers increased in 2008, up by 7 percent from the 2007 rate. The decreases in injuries are the direct result of improved working conditions, better training, and successful incentive programs.

So what does a good safety and wellness program costs? It can cost as little as $1 per employee to a few dollars per employee, depending on how creative or conservative you want to be. But what does it cost not to run a safety or wellness program? According to the National Safety Council, the average work-related injury's direct cost is approximately $38,000. That doesn't take into account the indirect costs that could be around $152,000. Putting everything together, you will need 10 percent of your profits to off set the injuries.

The $1 to a few hundred dollars starts looking like a very small investment when looking at the cost of one injury. What makes it even worse during a recession and after cutbacks is the fact that if it is one of your best and most productive workers who is injured, the financial hit is much greater. Hiring temporary workers to fill in will not come close to the same level of production and efficiency of one of your best employees.

So no matter how bad the economy is, the one thing that never should be cut is your safety and wellness programs.

This article originally appeared in the January 2010 issue of Occupational Health & Safety.

 
New Frontiers for Safety Incentives
New Frontiers for Safety Incentives

For years, many safety professionals openly opposed the use of safety incentive programs. This is changing.

It's clear that U.S. safety managers understand cash is a bad motivator of safer behaviors and performance on the job. Nine out of 10 potential customers he sees at industry trade shows accept that statement as a given, said Brian Galonek, CPIM, president of All Star Incentive Marketing of Fiskdale, Mass. Yet the fight for his company and others in the incentive industry is far from won, he said.

"I would say that the frontier for us now, the challenge we have: This is not your grandfather's incentive program any more," said Galonek. He said older programs, older formats that do not work well and persuade people to hide injuries or accidents, remain available. They might be based on one big-ticket giveaway — a single prize that will be awarded to one recipient from an entire shift.

"The three main things I always hit on are these: The element of chance is a terrible idea in a program, where you throw in all the names and pick one name out of a hat," he explained. "It's still only one person out of 50 or 500, and the other 499 never thought they had a chance anyway, so there's no incentive there. Stop using these big-ticket awards and just giving them to one person, like a trip to Hawaii. Stop using cash as the award itself. The third one is awarding in groups. As I've told people over and over again, if I'm being rewarded for my individual behavior and I run a forklift into a wall, I am not going to hide that and risk losing my job. I am being rewarded for my own behavior. If I report that and 300 guys on my shift won't get their safety points for that month or won't get their gift card, I will hide it. I'm much more likely to hide it. I'm talking about being the jerk in the lunchroom, ostracized, what have you. So now there's more of a disincentive to tell my manager that I put a dent in the forklift."
 

Galonek said about 50 percent of people he speaks with at trade shows think all three of those practices are fine, and many see no problem with waiting a long time to award the incentive. "An incentive program works because there's action-reaction. When you do something, I reward you for it. On the shop floor if possible, or as quickly as possible," he said. "If you have a completely great safety year and you were safest in April, and all you get is a chance to win an ATV and that chance comes in January, and then you don't win? That's not a safety incentive program, even if the safety manager thinks, 'The guys love it. They just love it.'"

Such programs are not based on communication and engagement, he maintained. "Those programs are based on whether you remember enough that you might win an ATV in 10 months if you stay safe on the job. That's not how human nature works." Workers from Gen X and Gen Y expect communication; if you reward them 10 months later for something they've done now, that's of no value, Galonek said.

Managers of the old school looked to the older methods, thinking that incentives are negative motivators because they encourage hiding of injuries, agreed Heidi Chatfield, the company's vice president of marketing and operations. The company is making headway with a newer crop of managers, she said, explaining that peers in various industries are now sharing a consistent message about how properly designed incentives only enhance a safety program.

"I always talk about an OSHA poster hanging on a wall," Galonek said. "That's not a safety program. What we try to get people to do is to put a little pizzazz, a little marketing into their safety message. It's extremely important…to think about how to spruce up that message. And not just the message, but also what flies underneath that message, which speaks to manager training and what you do to make sure people are singing off the same song card."

Industry Opposition Wanes

For years, many safety professionals openly opposed the use of safety incentive programs. This, too, is changing, Galonek said.

He cited an All Star program within the past year that was successful and loved by the customer, yet it was halted because turnover issues with the customer's middle managers caused its facilities to be managed poorly, and the All Star program wasn't being given the attention it required, Galonek said he was told.

That was frustrating, he admitted. "It's good to leave on good terms, but to say, 'We just clearly have a management training issue we have to resolve before we can expect this program to work for us.' …" "We do a lot of staying in touch with people," he added. "When they say, 'The budgets are frozen, we should talk in October,' that's what we do. So there's a lot of kicking the can down the road."

Customers are not saying the programs don't work, but some potential customers are saying they can't aff ord them at this time, he said.

 
Promotional Products Specialist On Board

DiVal Safety is proud to introduce you to our new Promotional Products Specialist, Jill Prusiecki. Jill has over 13 years experience in the printing and promotional products industry. Give her a call or email today and use her expertise to help put together a promotional campaign for your company.

Jill Prusiecki | 716.874.9060 | 800.343.1354 |  This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 
Your Best Advertising is Through Promotional Products

In addition to purchasing promotional items for your employees as safety incentives, promotional products are great way to build brand identity and an extremely affordable form of advertising. Customized products are far more cost efficient than paid advertising. Unlike print or broadcast advertising, promotional items do not quickly expire. A promotional product remains valuable as long as the item can be used. By the time a promotional product is discarded by the customer, it has long since justified its original cost.

The ultimate goal with promotional products is to instill your message into the memory of your target customers. The products offered by DiVal Safety will exemplify our commitment to detail, quality and service.

 


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