You want your production management to earn incentives and make more money when they earn high net profits for the company. What you do not want is this to occur coupled with increased safety accidents. Eventually the production manager will get the hit for the increased insurance premiums but that takes many months to occur. One way to affect the production manager’s wallet directly is to deduct dollars or percentages for accidents.
You may want to count lost time accidents as a much bigger chunk cut from the bonus check since it has more of a financial impact on the company as a whole. It is your decision. You may also want to give a little extra ‘financial kicker’ for so many months without a lost time accident. This may be even more enticing if you think about it. No matter what your decision, involve the safety program into the incentive program and make safety adherence a boost to the bonus checks.