The announcement that bonuses for one quarter at BP (NYSE:BP) will be tied to safety by CEO Bob Dudley, was an obvious media event to tie the two together in the minds of people.
What's important is whether or not it will do anything to actually improve the safety at the company.
Safety bonuses will be applied for one quarter while the company goes over an overall review to see how it wants to proceed. It's doubtful they'll keep it in place after that.
Of course he was probably under pressure from politicians to make the decision and announcement, as it makes them look good in having supposedly pressured them to focus on safety after the Gulf oil spill fiasco.
Another obvious question is why Dudley kept some people in place who probably should have been let go. Will this change their habits at all? Only time will tell.
As far as the actual reward system, it seems what should be ingrained in the culture of a company which has many risks associated with their work, isn't going to be changed by altering bonus money to it.
Any part of bonuses offered is going to be attempted to be gamed by some to reveal progress in order to obtain the bonus. So there's always that as a factor in the mix.
But safety is, or should be, a core value of BP, and as revealed in the Gulf oil spill, has more potential to destroy the company than any other factor.
Focusing on safety is a no-brainer, but using bonuses as a means to a safer company is more of a stunt that something that will change the culture of the safety-challenged company.
Because of the impact accidents like that in the Gulf had, using a stick is probably better than the carrot being offered.
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