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The seduction of a health and safety bonus

Posted by Ian Good on 18 April 2017

It was very pleasing to read Elizabeth Proust's, Australian Institute of Company Directors president and chairman of Nestle and Bank of Australia, response to bonuses that include Occupational Health and Safety as 'soft targets', The Age March 4th 2017. "There is nothing soft about customer satisfaction, staff engagement and OHS targets", Elizabeth states.

Obviously the commentary was more focussed on whether a bonus that is aligned to meeting a particular OHS objective or target should be paid to senior management. However, it does open the debate as to whether anyone can be made solely accountable for all safety measurements.

Generally, performance targets have a direct line of sight for the person to whom it is assigned or is an aggregation of their level of influence in relation to the target area.  Depending upon the type of OHS indicator, whether it be a lead or lag, the level of control senior management have can vary from significant or negligible.

Lost Time Injury Frequency Rates are one measure that no single person can influence and should be used as a whole of business indicator as to whether proactive measures (or lead indicators) are working. Depending upon the structure of the business, various functional areas should accept that their bonus will reduce if realistic LTIFR targets based on previous year performance are not achieved. Interestingly, in the 1990's, ICI's philosophy was that all personnel could improve safety outcomes and they were all assessed as 'Requiring Improvement'.

The development of compliant safety management systems, completion of audits, OHS training, health and safety committee meeting attendance, and safety walks are all aspects of business practices that can be attributed to persons or a group of people over which they have some influence or control.

Where it can be demonstrated that these lead indicators can lead to improved lag indicators, Key Performance Indicators that include ongoing measurement, review and modification of controls, could realistically be included in a bonus scheme for senior management.

Author: Ian Good
Tags: Ian Good


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