Reward behaviours, not outcomes
BP employees’ performance on safety measures will be the only factor considered when determining bonuses for the fourth quarter, according to Bob Dudley, BP’s chief executive officer.
“The sole criterion… will be performance in safety, compliance, silent running and operational risk management and exhibiting and reinforcing the right behaviors consistent with these goals,” Dudley said in an email to employees in October.
The British oil company’s 80,000 employees will be eligible for the bonus with the previous bonus arrangement — which was tied 15 per cent to safety and 70 per cent to operational or financial targets — remaining intact for the first nine months of the year. Changing the structure in the fourth quarter will make it absolutely clear safety is “BP’s number one priority, well ahead of all other priorities,” said Dudley.
While this may be the image Dudley would like to project, putting the entire bonus weighting on safety can actually cause employees to give it less credence, said Lou Vujanich, partner at Coopers Consulting in Vancouver.
“No one’s going to dismiss the importance of safety but, by the same token, if the people on the front line perceive the targets as being unachievable then they will stop focusing on it because regardless of what they do, they will never achieve the targets,” he said.
Linking safety to bonus pay can work, because anything that can be done to enhance focus on safety is a good thing, said Vujanich. However, including safety in the bonus calculation, where failure to achieve the tasks results in less than the target bonus, is not the preferred method, he said.
“The model we prefer is one where the safety element sits on top of the bonus plan and can provide incremental bonus amounts over and above what the individual may receive,” he said. “That way it’s a positive as opposed to a negative.”
Another important factor to consider when linking safety to bonus pay is to make sure to focus on the behaviour, not the outcomes, said Sandro Perruzza, vice-president of strategic relationships for Ontario’s Workplace Safety and Prevention Services in Toronto.
Managers should conduct regular safety observations and note the behaviours that are leading to a reduction in injuries, such as helping a coworker lift a heavy box, and use those in the calculation of the bonus pay, he said.
When safety performance is included in the bonus calculation, reporting of incidences declines, said Brooks Patterson, safety manager at The Pacific Group of Companies in Burnaby, B.C., a group of construction companies with 300 total employees.
His company does not link safety to bonus pay, but often the bonuses of his clients will be tied to safety performance. If something is even close to a lost-time accident, the vice-president of the client’s company will fly to the site because their bonus structure is based upon incident rates, said Patterson.
“Even just one lost-time accident will result in us not getting a new contract,” he said. “That’s the big downfall of bonuses for safety performance; there is such a disincentive to report because there is so much at stake.”
In his company, Patterson recognizes safety achievement through an incentive program that does not include cash bonuses. The program rewards employees without any lost-time accidents at various milestones between 1,500 and 15,000 hours worked. Prizes include games, jackets and road side emergency kits and are all branded with the company logo so they “feel a part of a team,” said Patterson.
“Offering incentives with huge monetary value would make them not report an injury, but I don’t think anyone would not report it for fear of not getting a jacket or a tool kit,” he said.
The program encourages staff to stay on the job in some way, shape or form, said Patterson. This may mean if someone has an injury, they are still in the system and they are still contributing to the company.
“It encourages them to work with us to come up with other meaningful work to keep them in the game,” said Patterson.
Linking safety in some way to bonus pay is fairly common in industries like mining, manufacturing, utility and petrochemicals, but every industry can benefit, said Perruzza, who is a proponent of rewarding safety behaviours, not performance. It’s important to make sure it’s in line with other business measures such as manufacturing and production, he said.
“In some automotive repair shops, service technicians are given bonuses based on how many cars they can do in a day but that’s an incentive to take short cuts and risks which goes against the safety measures,” he said.
Linking bonus pay to safety in one way or another is something employers will likely see more of down the road as safety gains more popularity and firms want to place more accountability on it, said Patterson.
“The danger is just reducing the reporting,” said Patterson. “We’re not trying to reduce the reporting we’re trying to reduce the events, but people will often just take the path of least resistance.”
“The sole criterion… will be performance in safety, compliance, silent running and operational risk management and exhibiting and reinforcing the right behaviors consistent with these goals,” Dudley said in an email to employees in October.
The British oil company’s 80,000 employees will be eligible for the bonus with the previous bonus arrangement — which was tied 15 per cent to safety and 70 per cent to operational or financial targets — remaining intact for the first nine months of the year. Changing the structure in the fourth quarter will make it absolutely clear safety is “BP’s number one priority, well ahead of all other priorities,” said Dudley.
While this may be the image Dudley would like to project, putting the entire bonus weighting on safety can actually cause employees to give it less credence, said Lou Vujanich, partner at Coopers Consulting in Vancouver.
“No one’s going to dismiss the importance of safety but, by the same token, if the people on the front line perceive the targets as being unachievable then they will stop focusing on it because regardless of what they do, they will never achieve the targets,” he said.
Linking safety to bonus pay can work, because anything that can be done to enhance focus on safety is a good thing, said Vujanich. However, including safety in the bonus calculation, where failure to achieve the tasks results in less than the target bonus, is not the preferred method, he said.
“The model we prefer is one where the safety element sits on top of the bonus plan and can provide incremental bonus amounts over and above what the individual may receive,” he said. “That way it’s a positive as opposed to a negative.”
Another important factor to consider when linking safety to bonus pay is to make sure to focus on the behaviour, not the outcomes, said Sandro Perruzza, vice-president of strategic relationships for Ontario’s Workplace Safety and Prevention Services in Toronto.
Managers should conduct regular safety observations and note the behaviours that are leading to a reduction in injuries, such as helping a coworker lift a heavy box, and use those in the calculation of the bonus pay, he said.
When safety performance is included in the bonus calculation, reporting of incidences declines, said Brooks Patterson, safety manager at The Pacific Group of Companies in Burnaby, B.C., a group of construction companies with 300 total employees.
His company does not link safety to bonus pay, but often the bonuses of his clients will be tied to safety performance. If something is even close to a lost-time accident, the vice-president of the client’s company will fly to the site because their bonus structure is based upon incident rates, said Patterson.
“Even just one lost-time accident will result in us not getting a new contract,” he said. “That’s the big downfall of bonuses for safety performance; there is such a disincentive to report because there is so much at stake.”
In his company, Patterson recognizes safety achievement through an incentive program that does not include cash bonuses. The program rewards employees without any lost-time accidents at various milestones between 1,500 and 15,000 hours worked. Prizes include games, jackets and road side emergency kits and are all branded with the company logo so they “feel a part of a team,” said Patterson.
“Offering incentives with huge monetary value would make them not report an injury, but I don’t think anyone would not report it for fear of not getting a jacket or a tool kit,” he said.
The program encourages staff to stay on the job in some way, shape or form, said Patterson. This may mean if someone has an injury, they are still in the system and they are still contributing to the company.
“It encourages them to work with us to come up with other meaningful work to keep them in the game,” said Patterson.
Linking safety in some way to bonus pay is fairly common in industries like mining, manufacturing, utility and petrochemicals, but every industry can benefit, said Perruzza, who is a proponent of rewarding safety behaviours, not performance. It’s important to make sure it’s in line with other business measures such as manufacturing and production, he said.
“In some automotive repair shops, service technicians are given bonuses based on how many cars they can do in a day but that’s an incentive to take short cuts and risks which goes against the safety measures,” he said.
Linking bonus pay to safety in one way or another is something employers will likely see more of down the road as safety gains more popularity and firms want to place more accountability on it, said Patterson.
“The danger is just reducing the reporting,” said Patterson. “We’re not trying to reduce the reporting we’re trying to reduce the events, but people will often just take the path of least resistance.”
