A recent study finds inspections that result in penalties for regulatory non-compliance motivate employers to improve
Deterrence campaigns or penalties: What’s more effective? While there are plenty of arguments on both sides when it comes to issues such as criminal behaviour, in terms of occupational health and safety regulations, the argument in support of penalties is now even weightier.
A new research study by the Institute for Work and Health (IWH), published online in the American Journal of Industrial Medicine, finds government health and safety inspections that result in citations or penalties effectively motivate employers to make improvements that reduce work-related injuries.
An IWH review team examined 43 peer-reviewed studies, all published in English language journals, between January 1990 and June 2013. Their goal was to see what elements of policy could produce the best occupational health and safety outcomes for workers.
Among other results, the team identified strong evidence that inspections with penalties result in a decrease in injuries, and consultative activity has no effect on injury outcomes.
The team also found that inspections without penalties do not reduce injuries. “This further confirms that specific deterrence — inspections resulting in penalties — is much more effective than general deterrence — the possibility of being inspected,” said IWH President Dr. Cam Mustard.
The ‘why’ behind the findings
That the threat of being inspected isn’t especially effective in altering behaviour is entirely understandable,” says Emile Tompa, senior scientist with IWH and principal researcher for the study. “It goes more into the area of behavioural economics,” says Tompa. “An employer’s utopian vision sees employees thinking about things over the long run, planning well into the future. But in reality, people are quite busy and organizations are too, trying to meet deadlines and manage things on an operational level day-to-day, week-to-week, month-to-month.” He adds, “They often will deal with things only when they have to — when they’re putting out fires —so it only really hits home when you experience it first hand.”
The behaviour is reflective of how people deal with risk, says Tompa. “We have a tendency to overestimate big risks; infrequent things, like a plane crash,” he says. “But they are likely to underestimate the things that are much more likely to happen.”
In terms of occupational heath and safety, says Tompa, people tend to underestimate the risk of being evaluated and punished, so the deterrent isn’t particularly effective. “We’re not very good at judging what the probability is that we’re going to be cited and fined if we don’t comply 100 per cent,” he says. “The idea that we’re dealing with things on a short-term basis makes us deal with the more immediate things, the most pressing issues,” rather than the bigger-picture occupational health and safety policy tasks.
In their study, the researchers note, “For (general deterrence) to be effective, firms would need to be rational, long-run optimizers, and knowledgeable about the probability and the financial implications of being inspected.” In reality, the authors write, “firms may have bounded rationality and have limited capacity to process information.” If this is the case, they suggest, regulators may need to heighten awareness in the field by actively communicating the consequences of non-compliance, and consider making information about non-compliers easily available to the general public. They add, “Focused awareness campaigns and inspection blitzes might also be a way to provide acute awareness on a particular hazard.”
Inspections and penalties spark positive change
The results, say Tompa, underscore the necessity for regulatory inspections and consequences for organizations not following the rules, in the interest of employee health and safety. “These findings reinforce the importance of regulators being out in the field and identifying, citing and penalizing non-compliant organizations,” says Tompa.
Those citations and penalties could mean occupational health and safety regulations are followed, in the long run. “Implementing fines and citations will spark change, and (the new behavior) will become second nature for organizations,” says Tompa. He points to the research team’s findings in the area of smoke-free workplace legislation. Inspections and citations for non-compliance helped enforce municipal regulations on the issue, says Tompa, “But there was a lot of fear in that industry (restaurants, bars, nightclubs) about it affecting business. At the end of the day, society has embraced that change and it’s accepted, and now it’s business as usual, really, as people realize the importance of it and work around it.
“What that says is when we bring in new legislation for occupational health and safety, if the conditions are right, if there’s awareness by a broad sector of society that this is important and these exposures are adverse and have important implications for workers, it can really work quite well.” He adds, “Don’t fear that more regulation will necessarily will impinge on productivity in business.
“Those regulations just get brought into an organization and become part of how you do business,” says Tompa.
Knowing the details = a safer workplace
No regulator has the resources to inspect all workplaces and to levy penalties for all violations, says Tompa, making other measures also necessary. He adds, “Regulators may need to heighten awareness by actively communicating the consequences of non-compliance, and possibly make information about non-compliers easily available to the general public.”
“One of the things we’ve suggested as something of a policy prescription is that if the implications of non-compliance were more broadly known (the exact penalties and fines, for example), organizations would be more apt to invest in compliance,” says Tompa.
Some jurisdictions heighten the awareness of non-compliance consequences by publicly naming organizations that commit serious violations, “to make everyone else feel concerned that this could be me,” says Tompa. While awareness of non-compliance implications might have some impact, says Tompa, “that missing component with the general deterrent is that organizations just don’t know the probability of being inspected.”
It’s a one-two punch that loses some impact if one half is missing. “If organizations don’t know the probability (of an inspection) or don’t know the implications for non-compliance, they’re less likely to act on what they know they should do,” says Tompa.
Keeping up awareness campaigns
The researchers found that ensuring general awareness of safety regulations is still an element of success when it comes to keeping employees safe. They looked at two groupings of studies for a connection between awareness campaigns and injury reduction and found one group showed limited evidence and the other showed moderate evidence to support the link.What this means, says Tompa, is that reaching the right audiences with awareness messages can have a positive impact on safety. “The people on the front line, the people overseeing health and safety issues, they play a critical role when it comes to hazards in the workplace and how to effectively prevent adverse exposure. They can make sure people know about hazards and how to take care and use the proper precautions.” He adds, “We all play a role in awareness.”