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'Rate-based' safety programs may discourage reporting

'Rate-based' safety programs may discourage reporting

“Rate-based” safety incentive programs are drawing federal scrutiny for their potential to discourage workers from reporting accidents and injuries.

However, rate-based incentives, which reward employees when few or no injuries are reported during a set time period, can improve workplace safety without running afoul of regulators when they are implemented properly, experts say.

While many observers agree that rate-based safety programs show an employer's dedication to preventing injuries, such programs also can have a “dark side,” said Calvin Beyer, head of manufacturing for Zurich North America Commercial in Edina, Minn.

That dark side was the subject of a Government Accountability Office audit report criticizing the Occupational Safety and Health Administration for taking only “limited action to address the potential effect of such programs and other workplace safety policies on (workers') injury and illness reporting.”

The April report cited a 2005 BP Products North America Inc. explosion at a Texas City, Texas, refinery in which 15 workers died and 180 others were injured. The refinery maintained a safety incentive program that tied employee bonuses to achieving low injury rates, according to the report.

The GAO report contrasted rate-based and behavior-based safety incentive programs, which reward workers for reporting “near-miss incidents” or recommending safety improvements.

While OSHA is not required to regulate safety incentive programs, its inspectors may miss opportunities to educate employers on avoiding policies that can discourage workers from reporting injuries because safety incentive programs are not addressed in OSHA's guidance materials, the GAO said.


That issue also surfaced in a Department of Labor memo, issued a month before the GAO report, on employer practices that may violate workplace regulations. Richard E. Fairfax, deputy assistant secretary of labor, sent the memo to OSHA field compliance officers and whistle-blower investigators.

According to the guidance, practices that may be problematic include taking disciplinary action against employees injured on the job, sanctioning workers who report injuries, imposing disciplinary actions for injuries that resulted from an employee's violation of safety rules, and establishing programs that provide incentives for employees not to report injuries.

“For example, an employer might enter all employees who have not been injured in the previous year in a drawing to win a prize, or a team of employees might be awarded a bonus if no one from the team is injured over some period of time,” the memo states.

“Such programs might be well-intentioned efforts by employers to encourage their workers to use safe practices,” it continues. “However, there are better ways to encourage safe work practices, such as incentives that promote worker participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents or near misses.”

Providing incentives so employees don't report incidents might result in a short-term reduction in an employer's injury rate, said James Thornton, chairman of the American Society of Safety Engineers' governmental affairs committee.

“But in the long term, there is just no benefit in it,” said Mr. Thornton, who is also director of environmental health and safety for Newport News Shipbuilding, a unit of Huntington Ingalls Industries Inc. in Newport News, Va.


“Safety managers...are wise enough to know you can only incent underreporting for a while and eventually it will bubble up to the surface, and that will not be good,” Mr. Thornton said.

Rate-based incentive programs can encourage underreporting or late reporting of injuries or dangerous incidents, Zurich's Mr. Beyer agreed.

That eliminates an employer's ability to collect accurate information about injuries or near misses, and employers don't know what corrective actions will prevent future accidents without that information, Mr. Beyer said.

“I view those as warning bells and whistles” that give employers “the opportunity to correct those underlying management deficiencies,” he said.

But the programs do have their place because they can build workers' safety awareness and build morale around safe work practices, Mr. Beyer said.

They should, however, just be one part of a broader, “holistic workers compensation/risk management process,” with which the GAO report essentially agrees, Mr. Beyer said.

They can be used, for example, in conjunction with programs that encourage workers to promptly report incidents so supervisors can investigate and follow up with a root-cause analysis that identifies corrective action, Mr. Beyer said.

“Posters and toasters programs,” which pass for safety programs by rewarding workers with inexpensive prizes or cash when they don't report injuries, is not a practice that safety professionals support, said Michael Eckert, director of WorkSafe Consulting Services, a unit of Accident Fund Insurance Co. of America in Lansing, Mich.

“One of my favorite sayings is, "Safety is not the absence of accidents. Safety is a comprehensive philosophy,'” driven by top management with safe workplace ideas pushed up from the rank and file, Mr. Eckert added.

But safety incentives can work as part of a broader effort, he said.

Employers that have derived positive results combine safety incentives with other practices, such as penalizing supervisors or workers who do not report incidents, Mr. Eckert said.