Love them or hate them, incentive programs generate an emotional response from most safety professionals.
On the plus side, incentives can influence behavior and I’ve met fleet safety teams who wouldn’t consider a safety program complete unless it specifically included an incentive plan. On the flip side, I’ve heard from safety professionals who suggest that incentives can become perceived as an entitlement and their ability to influence (or reward) safe behaviors may be viewed by top management as a wasted resource with little or no measurable result.
Naturally, there are many arguments and case studies that could be cited to build the case for or against incentive programs. I’m not actually interested in taking sides to defend or attack the benefits (real or perceived) of incentive programs, but I do get asked about them frequently. While I’m the first to admit that I’m not an expert on incentives, I’d like to share my observations based on my experiences with policyholders whom I’ve worked with during my insurance career.
Several critical questions have to be asked when someone is interested in launching an incentive program:
- What’s the goal? (or “What are we trying to affect/change by implementing an incentive plan?”) AND is the goal clearly/precisely communicated to everyone who has an interest in the program?
- Why isn’t the goal being met now? (If the goal isn’t being met because of a correctable non-performance situation, why not address the root causes before developing an incentive plan?)
- What’s the status/effectiveness of your communications plan? Do the drivers understand what you need to achieve and are they on board with attaining those results? (See our two part article on Driver Communications Plans @ http://safetyismygoal.wordpress.com)
- Have the drivers been involved in figuring out what types of incentive(s) would work? (What’s going to attract and hold their attention? You’ll get different results from and have different responsibilities from cash (taxes), paid leave (HR), vendor based programs, etc.)
- What’s the budget?
- What’s the timeframe — is this a one year plan, three year plan, or an open-ended plan?
- How will you know the plan is working (producing results)? (What and how will you measure to determine success?)
- What are the possible side effects (i.e. unreported damage, phantom collisions, any other unintended consequences, etc.)?
Once these questions have been addressed in earnest, then the real work begins in setting up a program and administering the performance data, the awards, and any legal issues (i.e. tax withholdings, reporting requirements, etc.) Of chief concern is designating a coordinator to be the primary point of contact on the program. This coordinator must have top management’s support and be a leader – someone who’ll be able to look anyone in the eye and deliver a calm, reasoned answer to any question about the program details.
If you’ve determined that an incentive plan is needed to achieve specific goals, there are many resources available to help set up the mechanics of a program. These range from “do it yourself” (DIY) plans to fully supported and administered vendor-based programs. It is well beyond the scope of a blog article to spell out all the details you’d need to consider; however, we’ve provided a small sampling of links to some of these resources at the end of this article, and we have a relationship with a full service vendor in case you need that type of support or don’t want to do it yourself.
Without a doubt, incentive programs can play a productive and rewarding (pun intended) part of any driver safety program when specific goals are defined and the program is carefully measured along the way. Incentive programs are specifically mentioned in ANSI Z15 and by the Federal Motor Carrier Safety Administration and many other agencies that deal with driver safety (to be clear, incentive programs are not part of the FMCSRs, but position papers have been provided on this topic showing support and providing advice about them).
We’re not taking sides in the debate about incentive programs. We just feel that it is vital to have a very detailed game plan in place before starting an incentive program. Preplanning helps minimize the potential that the plan will either fail outright or become a source of frustration for both drivers and managers.
What has been your direct experience with incentive programs? Has your firm implemented one with specific results? If you didn’t get the results you wanted, did your team perform a post-mortem to learn lessons from the program’s failure? Similarly, have you been able to document great results from an incentive program? If so, what did you set out to accomplish and what advice would you provide to other safety professionals who are still sitting on the fence? Please feel free to add your comments here are our blog site or through the SafetyFirst Client Networking Group on Linked In.com
Sample Resources (we’re not responsible for the content at the other end of these links):
- http://ntl.bts.gov/lib/12000/12700/12759/12759.pdf (don’t laugh, this is from 1951, but it’s still relevant!)
- http://www.fmcsa.dot.gov/facts-research/research-technology/tech/driver-retention-safety.pdf (this is for over-the-road truckers, but the basics still apply to any fleet)