Episode 97: Should we link safety performance to bonus pay?

The Safety of Work

This was very in-depth research within a single organization, and the survey questions it used were well-structured. With 48 interviews to pull from, it definitely generated enough solid data to inform the paper’s results and make it a valuable study.We’ll be discussing the pros and cons of linking safety performance to monetary bonuses, which can often lead to misreporting, recategorizing, or other “perverse” behaviors regarding safety reporting and metrics, in order to capture that year-end dollar amount, especially among mid-level and senior management.

Discussion Points:

• Do these bonuses work as intended?
• Oftentimes profit sharing within a company only targets senior management teams, at the expense of the front-line employees
• If safety and other measures are tied monetarily to bonuses, organizations need to spend more than a few minutes determining what is being measured
• Bonuses – do they really support safety? They don’t prevent accidents
• “What gets measured gets managed” OR “What gets measured gets manipulated”
• Supervisors and front-line survey respondents did not understand how metrics were used for bonuses
• 87% replied that the safety measures had limited or negative effect
• Nearly half said the bonus structure tied to safety showed that the organization felt safety was a priority
• Nothing negative was recorded by the respondents in senior management- did they believe this is a useful tool?
• Most organizations have only 5% or less performance tied to safety
• David keeps giving examples in the hopes that Drew will agree that at least one of them is a good idea
• Drew has “too much faith in humanity” around reporting and measuring safety in these organizations
• Try this type of survey in your own organization and see what you find

Quotes:

“I’m really mixed, because I sort of agree on principle, but I disagree on any practical form.” - Drew

“I think there’s a challenge between the ideals here and the practicalities.” - David

“I think sometimes we can really put pretty high stakes on pretty poorly thought out things, we oversimplify what we’re going to measure and reward.” - Drew

“If you look at the general literature on performance bonuses, you see that they cause trouble across the board…they don’t achieve their purposes…they cause senior executives to do behaviors that are quite perverse.” - Drew

“I don’t like the way they’ve written up the analysis I think that there’s some lost opportunity due to a misguided desire to be too statistically methodical about something that doesn’t lend itself to the statistical analysis.” - Drew

“If you are rewarding anything, then my view is that you’ve got to have safety alongside that if you want to signal an importance there.” - David

Resources:

Link to the Paper

The Safety of Work Podcast

The Safety of Work on LinkedIn

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