Recently I have been working with clients struggling to link their bonus scheme to tangible performance measures other than profit. One argument (Kohn) suggests bonuses should not be paid at all, but for the purposes of this one let’s assume they are.
My clients were struggling with the culture in their organisation, which was fast moving and responsive to client’s changing needs (and whims). This had resulted in rapid growth in both revenue and staff numbers, but also introduced serious inefficiencies due to poor planning. This was compounded by the new staff learning poor habits from the existing staff who were often changing things on the fly. But the clients kept paying and the staff kept receiving their bonuses.
Introduce a spate of health and safety incidents, and suddenly the focus changes.
A suggestion was made to link staff bonus to their safety performance, so the senior management elected to have a safety target of zero injuries for each project. That makes sense doesn’t it? Or does it?
Linking a bonus to a target of zero, incentivises staff to hide anything above zero.
To make real improvements in safety, staff must be engaged and committed to prevention, and open to learning from incidents and near misses. They must see this as part of their role and responsibility. This is what they should be rewarded for, rather than the final number.
Now this is very different to the financials, where if you hit your profit target, the company doesn’t really care how you got there. With safety, it’s about how you got there: How many leadership walks did you do? How many investigations did you lead? How did you engage staff to participate in risk assessments? How well did you plan for the identified hazards? Is your equipment maintenance up to date? Are your ladders inspected? Are your first aid kits replenished? Has everyone completed their refresher training? The list goes on…
Next time you are thinking about your performance measures and linking reward schemes to safety targets, think about how some of these proactive measures may fit to your business.