What Are the Economics of SMS

Despite the having the word “economic,” the economics of SMS are not concerned with money.

Rather, the economics of SMS look at continuous improvement from the standpoint of incentives.

Incentives play a powerful role in your SMS, for better or worse. Safety programs with good incentives generally have employees who:

• Follow the SMS program’s guidelines;
• Are not resist to change;
• Report safety issues; and
• Have positive reasons to behave/not behave in certain ways.

Immature programs struggle to create good incentives in their SMS.

Why Are Incentives So Important in SMS

Incentives in SMS can make or break the safety program. The words “reason for doing/not doing something” and “incentive” are the same thing. They are:

• Positive reasons to behave in a certain way;
• Positive reasons to not behave in a certain way;
• Negative reasons to behave in a certain way; and
• Negative reasons to not behave in a certain way.

Consider the following examples to demonstrate these points and show why incentives are so important:

• Top 3 reporters in the company receive an extra bonus at the end of the year (positive reasons to report safety concerns);
• Company policy that there are no punitive measures for employees who report their own issues (see FAA ASAP) (positive reasons to not omit information);
• Employees who do not report safety issues will be punished (negative reason to report issues); and
• Managers will be passive-aggressive towards employees who report issues in their department (negative reason to not report issues).

Why Employees Don’t Care About Your SMS

As said, one of the reasons incentives are so important is because employees have little inherent reason to care about your safety program. The fact is, unless you have promoted your safety program considerably, most employees probably don’t currently care about it.

The primary reasons why they don’t care are that of your employees:

• Don’t feel engaged with the SMS;
• Don’t feel that their opinion matters for changes;
• Don’t see results from reported safety issues; or
• Existing norms are corporate, punitive, full of silos, etc.

In short, these points breed apathy. Incentives are how you overcome apathy.

Have You Read

• What Issues Employees Should Be Reporting in Your SMS
• How Employees Should Be Participating in Your SMS
• How to Show Employees That Your Aviation SMS Is Effective

How to Get Financial Support for Safety Program

As said, the economics of SMS are not a discussion about finances, but rather incentives. Using the economics of SMS to earn management support for your program means giving upper management and executives incentive for pumping money into the safety program.

Some really good ways to give management incentives to give your SMS program are:

• Show financial benefits of integrated safety database/software;
• Use safety data to prove the need for more resources;
• Integrate QMS and SMS to save resources; and
• Gather success testimony from other companies.

All of these points give management a reason (incentive) to provide more resources.

What Are Good Incentives for SMS Participation

Fortunately, powerful incentives are actually quite easy to implement in your program. Once these incentives are implemented, they will need to be promoted over and over again until they “sink in” to the consciousness and behaviors of employees.

• Make everything about your SMS simple, from reporting safety issues, to getting questions answered, to contacting management about safety concerns;
• Give employees the authority to make safety decisions without fear of being punished;
• Be crystal clear about what your expectations of employees’ behaviors are, such as each employee’s role and mandatory/optional issues to report;
• Engage employees by asking many questions, getting their input, etc.;
• Positively recognize individuals, such as in a newsletter, meeting, etc.; and
• Destroy unhealthy corporate culture in the SMS.

Destroying corporate culture in the SMS is the hardest and most important of the points. Corporate culture quite literally destroys companies, departments, and programs. A good way to do this is to be as transparent as reasonably possible about safety concerns.

What Are Bad Incentives for SMS Participation

On the other side of the incentive coin, here are negative incentives that are common in safety programs:

• Employees have no authority to make decisions;
• Employees are not encouraged to be assertive about safety questions/concerns;
• Management does not act upon employees’ opinions, recommendations, or other types of feedback;
• The systems, processes, and other parts of the SMS are confusing or complicated; and
• Corporate culture is rife in the safety program.

All of these incentives offer employees one lesson: don’t participate in the program.

To find out what level of incentives are inherent in your current SMS, take this free safety culture quiz:

Last updated September 2023.