Literature of review of existing work on the subject of using monetary incentives or rewards as motivation for reduction of occupational injuries. How does the use of monetary incentives impact the performance of employees in a safety program.
Effectiveness of monetary incentives on reducing occupational injury rates
Lawler (2000) observes that, in order for an organization to create capabilities in its employees, it is essential to have competitive advantages. In a competitive market, every organization tries toimprove the performance of its employees and to meet its targets, including using different methods to help them inculcate safety practices when performing their duties. In the conventional approach, according to Lawler (2000), control is achieved through monetary incentives, hierarchy, close supervision, and the cautious description of tasks. This paper deals with the impacts of monetary incentives on safety initiatives. In order for a monetary incentive to successfully influence employees to adopt safety programs, it must have an important effect on them (Lawler, 2000).
Wilson(1999)maintains that, in order to get and retain competent and skillful employees who can help the organizations effectively meettheir goals, it is important to maintain an environment where employees are rewarded and valued for attaining desired results. Incentives must be targeted on those activities and behaviors that help the organizationsmeet their goals,including setting up safety programs. Good monetary incentives provide the employees and managers with guidelines on what the organization considers as important.
There has been written a lot of literature on the factors that motivate employees. The theory by Abraham Maslow explained a hierarchy of needs that placed security needs and basic survival at the base of a pyramid of human needs. The needs that came top of the pyramid included self-esteem, acceptance, and self-actualization. Maslow added that the higher needs cannot be satisfied before satisfying the more basic needs, and once satisfied, the basic needs cease to act as motivators (Smoke, 1998). As such, some researchers have suggested that, once people have earned enough moneyto meet their basic needs, it ceases to be a motivator. In his modified version of the hierarchy of needs, Herzberg stated that employees can be dissatisfied due to lack of fair compensation, but money alone cannot be an incentive for employees (Smoke, 1998).
According to Lawler (2000), neither Herzberg nor Maslow intended to consider money as an incentive, and organizations should not consider money as part of their incentive system; instead,they should use it to modify the desired behavior of their employees. A survey cited by Gubman Consulting (2001)upheld this view by establishing that employers were making a lot of efforts to bring monetary rewards in linewith business goals. For a monetary incentive to motivate employees to espouse safety programs, it must have a meaning for the employees (Gubman Consulting, 2001). Also, the amount of reward is very important in monetary rewards as it directly determines the extent to which it motivates the employees. According to Lawler (2000), the monetary incentive must be at least 5% of an employee’s annual salary for it to have a substantial impact. He, however, adds that lesser monetary incentives can have substantial impact on the employee’s motivation if they are provided alongside other forms of appreciation.
Potter and Potter (2013) note that safety incentive programs can become an ineffective routine and irrelevant after some time, and this means that organizations must seek better ways of ensuring that the monetary incentives realize positive outcomes. Instead of buying employees’ dedication to safety with a monetary safety incentive program, Potter and Potter (2013) add that organizations can apply alternative techniques such as making safety a core value, committing management to workers’ safety, involving employees in the safety processes, setting high expectations for safe performance, and allowing employees to set their own goals. Maurer (2013) reports that Occupational Safety and Health Administration (OSHA) discourages organizations from evaluating the effectiveness of safety programs by largely relying on money as an incentive for employees’ good safety records. He states that monetary incentives may be awarded to employees in good faith, to encourage them to use safe practices, but there are better methods of encouraging safe work practices,such as promotion of workers’ participation. Rather than rewarding employees for not having injuries when undertaking their duties, Maurer (2013) reports that the recommendation of OSHA is rewarding employees when they adopt sound safety practices, such as always attending safety meetings and wearing protective gear.
GAO (2012) reported a set of six studies that evaluated safety incentives programs and found varied conclusions about the impact on workplace safety. Two studies particularly evaluated the impact of the programs on reporting of injuries and paid attention to one type of safety incentive program: they found that these classes of incentives had no impact on work safety. One of the studiesthatwere conducted on nurses to establish the extent to which injuries and illnesses were reported in their place of work established that the incentive programs that were based on rate had no impact on reporting of injuries. The rest of the three studies that focused on more than one type of safety incentive program established that the programs led to reduction of injuries, but the effect on illness and injury reporting was not quantified.
Those who did these studies concluded that the programs encouraged workers not to report injuries – this was achieved by giving a certain amount of money for having low injury rate. However, it was also noted that this system of rewarding encouraged workers to underreport cases of injuries. For example, Kristy et al. (2007), who were the authors of one of the studies, found that employees may deliberately fail to report injuries with the aim of maximizing the potential bonuses for their work groups.
A report by Mavity, Fisher, and LLP (2012) indicates that OSHA has, for many years, encouraged organizations to disengage from safety programs that primarily base the effectiveness of a program on reportable injuries and instead account for monetary incentive programs, in whole or in part,based on the reportable injuries and illnesses faced by an employee. According to Mavity, Fisher, and LLP (2012), the basic reason for OSHA’s discouragement of such programs is because they deal with recordable facts, focusing on lagging indicators, which can be affected by bad lack or the unpredictability of timing, or even fail to identify the root causes.
Mavity, Fisher, and LLP (2012) also note that employers tend to increasingly depart from programs that are primarily motivated by recordable facts. This is because it has been noted that many employees underreport workplace injuries with the aim of taking part in safety incentive programs. The employees could also be forced to do so because of the intense pressure imposed upon them by their employers, either as a result of their safety control processes or on a deliberate basis. Mavity, Fisher, and LLP (2012) report that OSHA and other federal agencies have vigorously encouraged employees to pay attention to potential retribution and prejudice based on the protected behavior, such as activities that are related to safety measures, particularly those pertaining to reporting of recordable injuries.
Kepner et al. (2003) argues that employees’ needs and interests can be satisfied by striking a balance between monetary and non-monetary incentives. He notes that monetary incentives persuade employees to comply rather than take risks since most of the financial incentives are based on performance and hamper employees’ creativity in an organization. According to Doyle (2013), an effective safety incentive program set goals, defines objectives as well as assigns and plans accountability and responsibility. However, some critics argue that such incentives discourage employees from reporting injuries. Others claim that failure to report injuries is enough to offset the benefits of the incentives such that it is hard for them to tell lies. In that regards, if a safety incentive is properly implemented, an organization’s employees can hardly deliver invalid information for any reason whatsoever……………………………..
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