Worker accidents can threaten to push a manufacturer down the tubes. Here's how a Pittsburgh business owner used a safety-incentive program to stop the drain on his company's profits.
By Ray Marano
When Steve Oliphant wanted to cut worker injuries at Tubetech, he decided to put the company's money where its mouth was.
The result is a program that offers workers financial incentives for safe performance on the job.
Tubetech, based just across the state line in East Palestine, Ohio, manufactures tube steel stock.
Oliphant, a Pittsburgher who is majority owner and president of the $16 million, 67-employee manufacturing company, says he competes with manufacturers several times Tubetech's size, so he needs to muster every competitive advantage he can to remain a supplier to companies that fashion parts for the likes of Honda, Nissan and Toyota.
To initiate the safety effort, the company formed a safety team comprised of employees and called in the state's Bureau of Workers' Compensation to do a plant-wide assessment.
"Their evaluation and recommendations gave us an objective handle on where we stood in terms of safety equipment-goggles and ear plugs, for example," says Rick Downey, the company's human resources manager and safety director.
The safety committee looked at accident reports over a three-year period and found that carelessness and bending the safety rules were the culprits in worker accidents, not equipment failure. One worker, for instance, fell when he climbed on grease-slicked equipment instead of taking time to get a ladder.
Tubetech took some operational steps to trim the risk of accidents, like relocating fire extinguishers and replacing old lift trucks that tended to malfunction frequently, but Downey expects the biggest strides to be made with the new safety incentive program.
At the beginning of each month, four people are chosen via a random drawing of names to receive a $50 cash bonus-if the month is accident-free.
The effort is supported-and reinforced-by training. For instance, a safety team member verified the safety rules for operating a high-speed saw used by nearly every worker in the shop. Then all manufacturing employees were trained and certified to use it.
Tubetech initiated the worker-safety program just last fall, so Oliphant is reluctant to judge its success. However, he acknowledges he can't deny that worker accidents have dropped noticeably since the program's launch.
"I would have to say that, for whatever reason, our lost-time accidents have gone down very significantly," he says.
Oliphant points to a high-water mark for production in March, when the company shipped a record tonnage of product and still avoided a single lost-time accident.
The incentive approach came out of a successful program that was developed by the company earlier to reduce absenteeism. The company offers employees who record no absences in a year a $500 cash award. Plant employees who meet the perfect-attendance standard in any quarter receive $100.
In 1997, 15 employees received awards, money Oliphant thinks is well spent to prevent interruptions in production and time spent by supervisors who have to replace absent workers.
Oliphant is so convinced that the incentive-based systems work that he plans to implement them at the plant his company plans to open this fall in Clinton, Tenn.