4 No Pay for Safety

      Aaron pauses before diving into the long “to do list.” There is still one immense obstacle to overcome: a total lack of management participation. He remembers the Doc telling him about the few Critical Success Factors (CSF) which determine management pay, and therefore drive its active participation. At Aaron's organization the big three management Critical Success Factors are all wrapped up in the operations indicators of cost, quality and customer service.

      Aaron recognizes that before he gets totally engaged with the AIM and ROI matrix tasks he needs to have a parallel tactic which will engage upper management in improving the safety culture. But how can he affect management pay when it comes to safety? It's time for another two hour phone discussion with the Doc.

The Doc reminisces about his being the new “safety guy” working with the famous and very experienced safety consultant, Dr. Dan Petersen (see appendix B for details). Immediately upon hiring Dr. Dan as the safety consultant, the Doc was exposed to an incredible amount of new material engineers were not taught in a university curriculum. After 42 years in safety Dr. Dan Petersen, who is often referred to in trade publications as a “safety guru,” concluded that safety incidents were due primarily to management and management system failures. In his mind OSHA was not at all the culprit that upper management often thought them to be. OSHA was doing their job of providing a focus on the conditions that have often led to serious injuries and fatalities. However, management was another issue altogether and thus to quote an old‐time cartoon character Pogo Possum, “We have met the enemy and they are us.”¹ Dr. Petersen explained his safety philosophy as being centered on leadership and accountability as the way to develop an organization's culture of safety. In a 1996 interview with EHS (Environmental Health and Safety) Today magazine, Petersen said that managers must learn that they have to do things on a regular basis to develop the culture which produces safe behaviors. He went on to profess that he did not know what those things were, but that organizations must unleash their management skills on safety problems.

      One of Dr. Dan's many paradigms was: “What gets measured is what gets done and what gets rewarded is what gets done first.” Back then, when the Doc was newly in charge of safety for a Fortune 20 company, upper management was paid significant bonus dollars for excellent performance in cost, quality, and customer service. There was no incentive for safety performance and consequently very little attention paid to personnel safety numbers. Neither the Doc nor Dr. Petersen were proponents of safety bonus payments based on injury rates, the lagging indicators which are driven by what you do not want to occur. However, back at that time leading indicators were almost unheard of, so the safety culture improvement group did develop a simple bonus structure which gave significant emphasis on reducing injuries at the plant manufacturing level. In the past, 1/3 of the bonus pool was being paid out for excellent performance in each of cost, quality, and customer service objectives. The new plan, approved by an upper management which wanted to end their miserable safety culture, was 25% of the bonus pool for excellent performance in each of cost, quality, customer service, and safety culture and injury rate objectives. The safety incentive system was based on:

There was no credibility among the field facility managers that this was “the new normal.” After all, they had never even been evaluated on safety for all the years the company had been in existence. That was until the first quarter payouts occurred! Suddenly there were 40 plant managers wanting to know what to do and how to do it “because money talks.” Even with this significant incentive only four of the managers agreed to put forth the needed efforts to try the new approach in year one. The unit operation of safety culture excellence was a work in progress and they became the necessary developers (guinea pigs) on which to try “all this new safety culture stuff.” At the end of the year, their performance improvement was spectacular. In year two of the new safety culture initiative, seven more plant managers signed up for this accountability, continuous improvement, engagement type of safety culture, and they too did extremely well. However, the remaining plant managers seemed unwilling to take on a safety goal and yet still got ¾ of a good incentive payout, which seemed enough for them without having to go through the hassle of “another corporate program.” Once again, the safety culture improvement team received excellent backing from upper management as senior management issued a decree that went along the lines of “Safety excellence is a condition of employment for you to continue to be an employee of our company.” But it took a fatality and three years of extreme effort on many fronts to get to the managers to all “buy in to” (accept) the program. Clearly, safety incentives were, and still are, a major issue with which organizations need to contend.

      In the classic operations, organization safety, if it is a part of the pay plan, it is small or minuscule when compared to the big three. If safety is a part of pay for performance, it is typically focused on the reactive negative effects of injuries, like RIF and workers' compensation payouts. Seldom does the classical safety payout have anything to do with requiring proactive accountabilities by management, frontline employees, and supervision. Mostly, classical safety seems to be viewed as being lucky or unlucky.

      This pay roadblock often seems insurmountable. Upper management says it cares about not injuring the employees, but there is no visual or activity based‐evidence, only lip service. The union continues to vocally attack management and demand management personnel and/or attitude changes, but to no avail. How then can Aaron and his team overcome this significant safety improvement barrier?

       Aaron considers his options and grows despondent over the impossibility of effective implementation. Why not just be like the rest of the organization and join the complaining group? The Doc warns Aaron that this approach is to no avail other than alienating upper management. In fact, joining the griping culture will hurt his efforts with:

      There is just no value being added to resolving the noticeable shortfalls by joining a group that desires to tear