Workplace Safety Incentives Since 1991
When the designer of Safety Pays began handling all of Santa Monica Seafood's risk management in the late 1980’s, the company was experiencing 1 worker's comp claim for every 3 employees during a given policy year.
In response, a great deal of effort and capital was directed toward solving the problem through safety programs, training, inspections, etc. Unfortunately, the impact was minimal. It was at that point, the creator of Safety Pays realized if "people" are problem with worker's comp costs, then they have to be at the heart of the solution.
He believed the key to the WC problem lay in finding a way to encourage employees to do the right thing. Since the employer one the one who stood the most to lose, it was managements responsibility to create the affirmative steps were necessary to bring this about. That was why Safety Pays was created. The results were nothing short of astounding.
Santa Monica Seafood reduced its claims exposure from a high of 33 claims before Safety Pays to a yearly average of 3-4 annually. Its loss ratio dropped from 122% to less than 5%. And most importantly, its ex-mod rating fell from a high of nearly 140 to as low as 60!
The owners of Santa Monica Seafood, a second generation Italian family of 6 brothers and sisters -- who were both highly skeptical and resistant to incentives "as a matter of principal" (they didn't like the idea of paying an employee for something the employee was already supposed to do as part of his job) -- were absolutely amazed by the savings.
After committing an initial $1500 towards this incentive program, the Comany realized a savings of millions of dollars in workers' comp costs. Today, they'll be the first to tell you it's better to encourage the employees by paying them a little, rather than to end up paying the insurance carrier a lot! Equally important, Safety Pays has demonstrated the same level of effectiveness with thousands of other companies since then.
So when it comes right down to it, although the concept of incentives may be philosophically hard to swallow, it's really an economic decision. A company either rewards modified behavior through safety incentives, or must continue to live with the substantially higher costs of ever-spiraling workers' comp premiums. It's really just that simple.
Genuine solutions to any challenge require taking "proactive" steps. After all, a team which relies solely on its defense rarely scores any points. A winner knows how to seize the initiative. That's what companies using Safety Pays have done. By taking an affirmative incentive approach to the problem of loss exposure, our customers have been able to have a most positive impact. In case after case, claims exposure is not only reduced but virtually eliminated.
The key to the program's success is that it actively seeks solutions from what has otherwise been the source of the problem: The employees. Understanding this principle is important because it can be used in an unlimited number of ways to overcome most if not all human resource issues...even those which seem otherwise insurmountable.
But no answer will ever come by merely reacting to the status quo. The trick is to creatively devise and actively implement a set of solutions which not only encourages the employees' participation but allows the workforce to directly benefit from their successful efforts. By doing so, in a very short period of time, what may have once been a liability can become a tremendous asset.