BP to base bonuses entirely on safety

New BP boss Bob Dudley is (wisely) making safety the first and only priority for his 80,000 staff.

by James Taylor
Last Updated: 19 Aug 2013
An interesting move from BP boss Bob Dudley: he's apparently told his 80,000 staff via email that safety will be the only criterion on which their bonus payment will be assessed in the fourth quarter of this year. This might seem an odd idea, on the face of it - how are the accounts department going to make BP's oil rigs safer? But if you're trying to bring about a cultural step change, perhaps this is the kind of big gesture you need...

The previous bonus arragements will remain in place for the first nine months of the year, so this only affects a portion of the annual award. But it's still a pretty radical step - Dudley told staff that pay-outs would be based on 'each business's progress in reducing operational risks and achieving excellent safety and compliance standards'. The idea, he said, was to make it 'absolutely clear that safety is 'BP's number one priority, well ahead of all other priorities'.

BP has already sad that it plans to assess whether its pre-existing bonus scheme (70% of which was calculated on financial or operational targets, according to the Guardian) pushed safety too far down that priority list. In other words, were execs so desperate to deliver better performance or profits that they started cutting corners? So in some ways, this is a natural development of that.

But the broader picture, of course, is that new broom Dudley is desperate to be seen to be cleaning up BP once and for all, and thus convincing the sceptical US government that the oil giant has learned its lesson from the Deepwater Horizon explosion. As well as splitting up its exploration and production division (to make it more accountable), he's also introducing a new safety division with special powers to intervene in the business whenever and wherever it likes.

So we can see this as another step in the long road towards rebuilding BP's battered reputation. And insofar as it hammers home to staff the absolute priority of safety, it sounds like a smart move. The accounts people can always focus on blunter paperclips, or something.

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