Do incentives work? A qualitative study of managers’ motivations in hazardous industries Sarah Maslen ⇑,1 , Andrew Hopkins 2 School of Sociology, College of Arts and Social Sciences, The Australian National University, Australia article info Article history: Received 27 March 2014 Received in revised form 25 June 2014 Accepted 4 July 2014 Available online 8 August 2014 Keywords: Incentives Motivation Major accident risk Senior managers Sociology abstract Incentive schemes are one way that companies seek to align the interests of their employees with corporate goals. Indicators of major accident risk management have been historically excluded from such incentives. However, analyses of the recent BP disasters found that the incentives worked against process safety, and it was recommended that companies move to include indicators to support the safe management of their complex technologies. The extent to which this recommendation has been applied, and its appropriateness in practice has not been the subject of systematic inquiry. Drawing on the literature on human motivation and incentives, this article addresses the present and potential role of incentives to manage major accident risk in hazardous industries. It focuses on the extent to which senior managers are motivated by incentives in their daily decisions. This analysis is based on qualitative interviews, observation, and document analysis in 11 case study companies across the oil and gas, petrochemical, pipeline, and mining sectors. We argue that despite discomfort with the concept that safety decisions might be influenced by money, incentives influence priorities and behaviours because they do not rely for their effect on economic self- interest alone. Instead they tap a number of human motives, among them the need for approval, and the need to be recognised as making a valuable contribution. We conclude that if incentives continue to be used as a motivation strategy for financial and business performance, safety – particularly as it relates to major accident prevention – must also be incentivised in this way. Ó 2014 Elsevier Ltd. All rights reserved. 1. Introduction Events in recent years such as the BP Texas City disaster have triggered interest in the use of incentives, and their impact on major accident risk. Accident analyses highlighted the way that incentive structures for BP senior executives worked against process safety (Hopkins, 2010). They directed attention towards business and financial objectives, and where safety was included it was exclusively measured in terms of personal safety. One com- mentator, Bergin, saw this as a root cause of the Texas City disaster. He said: ‘Managers did not act to prevent Texas City because every incentive and potential penalty they faced told them not to’ (Bergin, 2011, p. 85). The same could be said for the Gulf of Mexico blowout (Hopkins, 2012). In the aftermath of the BP Texas City disaster, the Baker panel report (an independent review of the company’s corporate safety culture, safety management systems, and corporate safety over- sight at its US refineries) made the following recommendations: A significant proportion of total compensation of refining line managers and supervisors [should be] contingent on satis- factorily meeting process safety performance indicators and goals ... A significant proportion of the variable pay plan for non-managerial workers ... [should be] contingent on satisfac- torily meeting process safety objectives (Baker et al., 2007). Based on these recommendations, BP fundamentally modified its incentive arrangements. The recommendations have also been more broadly influential. In recent years many companies in hazardous industries have recognised that the criticisms levelled at BP applied to them as well, and have moved to include some indicators of major accident risk management in their incentive arrangements. The move appears positive. However, the incentive arrangements in place and their likely effects on major accident risk have not been the subject of systematic inquiry. Our research, a part of which this article reports on, has sought to contribute to this knowledge gap. http://dx.doi.org/10.1016/j.ssci.2014.07.008 0925-7535/Ó 2014 Elsevier Ltd. All rights reserved. ⇑ Corresponding author. Address: School of Sociology, College of Arts and Social Sciences, Haydon-Allen Bld (22), The Australian National University, Acton, ACT 0200, Australia. Tel.: +61 2 6125 8481. E-mail address: Sarah.Maslen@anu.edu.au (S. Maslen). 1 Research Fellow. 2 Emeritus Professor. Safety Science 70 (2014) 419–428 Contents lists available at ScienceDirect Safety Science journal homepage: www.elsevier.com/locate/ssci