Variable compensation plans are not a critical part of most sales departments. By changing the amount people make based on performance, employers can encourage a range of positive behaviors.
Workplace safety is a serious concern in many industries, and employees need to be constantly reminded of safety protocols and practices. The manufacturing industry is particularly ripe for safety-based incentive systems, but many of the current systems may not be effective. An Occupational Safety and Health Administration survey discovered 75 percent of manufacturers had some form of workplace safety compensation program in place, but these programs actually discouraged employees from reporting issues or concerns.
The need for improved programs
The issues with compensation systems based on safety should not prevent companies from using them, but should encourage business owners to develop better ways of implementing these systems. Poor safety compensation strategies reward employees for a lack of incidents and ignore all of the effort that prevents incidents from happening in the first place.
“Integrating safety into compensation encourages reporting.”
An ideal compensation plan is adaptive and rewards small changes employees can make throughout their workday to improve a business’ overall safety record.
A recipe for complexity
Unlike a sales compensation plan, which is full of sharply defined goals, a safety compensation plan is typically looser, and may have specific milestones based around individual employees’ positions within the organization. That means no two safety compensation plans will be alike, which makes managing a safety compensation plan a headache using traditional tools.
The best plans encourage employees to report potential issues without punishing them for past mistakes. Employees should be compensated for their ability to deconstruct historic safety missteps and identify where things could be improved. This means that a smart compensation strategy based around safety encourages participation in open discussions about safety protocols. Additionally, the compensation for avoiding incidents and reporting incidents should be commensurate, so employees feel comfortable revealing problems after they occur.
Compensation management software is an excellent tool for managers in a sales setting and can be equally useful for organizations which want to implement a safety-based compensation plan. With a software solution, companies can implement an individualized plan for each employee that tracks their specific compensation metrics. This makes it easy for managers and employees alike to know where everyone in an organization stands relative to overall compensation.
