Risk Management PDF

WEBC07 04/03/2017 10:33:42 Page 319 A Guide to The Human Resource Body of KnowledgeTM (HRBoKTM), First Edition. Sandra M. Reed.  2017 by Human Resources Certiﬁcation Institute, Inc. Published 2017 by John Wiley & Sons, Inc. 7 Risk Management Return to Work Programs: Positive Outcomes for Employers and Employees? In 1998 a group of researchers decided to embark on a scientiﬁc literature review of experiments related to assessing the effectiveness of modiﬁed duty and return to work (RTW) programs. The researchers looked at literature related to modiﬁed work as well as phased techniques in which injured workers are gradually reintroduced to their jobs through increasing hours and responsibilities. Sup ported employment was also explored, in which employees return to work with a coach or an employment specialist. Reaching back to 1975, the researchers evaluated 13 studies related to the topic, and shared their summary ﬁndings. These included: Return to work programs cut the number of lost workdays by 50 percent. For HR as risk managers, this translates into lower cost of injuries overall. The longer injured workers are off work, the less likely they are to return at all. The study found that long-term disabilities accounted for the majority of workers’ compensation costs (Krause, Dasinger, and Neuhauser 1998). There is more that needs to be done from an academic perspective to understand the efﬁcacy of RTW programs. These researchers found a surprising (continued ) 319 WEBC07 04/03/2017 320 10:33:42 Page 320 A Guide to the Human Resource Body of KnowledgeTM (continued ) lack of high-quality studies within this HR domain, particularly from the perspec tive of the injured worker. In fact, only 13 of the 29 studies originally sourced were included due to lack of validity issues. Areas to consider for future research include a review of employee satisfaction, quality of life after an injury, and the impact that a workplace injury with a subsequent RTW program had on lifetime earnings potential. That’s not to say that more current research doesn’t exist, particularly in the context of RTW for non-work-related disabilities. A study in Norway was prompted by a national absenteeism rate of over 40 percent, and near 50 percent disability rate by people with reported non-work-related musculoskeletal disorders such as ﬁbromyalgia. The researchers found that the well-crafted RTW programs of employers changed the way off-work employees were thinking, and gave them a more optimistic view of the future. Returning to work gave them back a sense of being part of a community. The researchers reported that many participants “expressed they had changed their focus from what they struggled with to what they managed.” The study also found that six months after a completed RTW program, the injured individuals had a better idea of their own responsibilities to stay at work as opposed to missing time due to their disability (Hamnes, Rønningen, and Skarbø 2015). Other studies found that 49 percent of employers with more than 10,000 employees already had RTW programs for non-work-disabled individuals, with 22 percent of other companies planning to add these programs in the near future. This may be in large part due to the competing demands of the variety of nonoccupational injury leave programs HR must manage for the organizations of today. The downside: the employers who have more robust RTW programs for non-work-related disabilities are grad ing the programs at a C+. The reasoning of one executive in the study was the frustration employers felt at trying to monitor the effectiveness of RTW programs in general (Harrison 2015). We can learn both from the older summary studies of occupational RTW programs and the more recent studies of emerging RTW efforts for nonoccupa tional disabilities. We must recognize that it is difﬁcult for HR to successfully argue the merits of RTW programs due to the lack of clear, evidence-based support. Employers may learn from industrial best practices, and through their own trial and error. A solution is for HR practitioners to keep track of their own metrics to see how the numbers look at their places of employment. By conducting internal research such as comparing the total cost of injuries between RTW and non-RTW employees and tracking the amount of time the HR department is spending on managing leaves of absence, HR can make a business case for an RTW program that—for now—appears to be a valuable risk management tool. Best practices in large companies such as Kaiser Permanente involved the union to help with the build-out of return to work and stay at work programs. Other companies have sought to standardize the interactive process to comply with legal requirements, but also to encourage creative problem solving to keep their talent working. Changing the structure of an HR or beneﬁts department may also WEBC07 04/03/2017 10:33:42 Page 321 Risk Management 321 be necessary to create depth in expertise of the oft-competing laws on managing leaves of absence, and provide focused services to employees struggling with any type of disability. HR may ﬁnd that the true discussion with executives is whether to completely internalize RTW management or to outsource the management of these programs. This growing trend may shift the day-to-day burden of adminis trative oversight and allow HR to engage in the more personal approaches to achieve a satisfactory blended approach. References Hamnes, B., A. Rønningen, and Å. Skarbø. 2015. “‘I Am So Much More than My Work’: Qualitative Study of Experiences after Participating in Return to Work Programs for People with Rheumatic Diseases.” Annals of the Rheumatic Diseases 2015 (74:Suppl 2): 177. doi:10.1136/annrheumdis-2015-eular.5181. Harrison, Sheena. 2015. “Return-to-Work Programs Expand beyond Workers Comp: Action on Disability Claims Can Reduce Employers’ Costs.” Business Insurance, March 22, 0020. Krause, N., L. K. Dasinger, and F. J. Neuhauser. 1998. “Modiﬁed Work and Return to Work: A Review of the Literature.” Journal of Occupational Rehabilitation 8:113. doi:10.1023/A:1023015622987. Introduction How do you like your toast? Lightly crisped to caramel-colored perfection, or dark and coarse with burned bits for ﬂavor? Regardless, you may have to prepare it at home because many employers of today are adopting employment practices that ban small appliances such as toasters, tea kettles, and portable heaters at work. This is just one example of the seemingly never-ending HR tasks of interpreting and applying the various safety standards required in the workplace. Protecting workers from identiﬁed job hazards (and themselves) is not the only focus of an employer’s risk management efforts. While ﬁre risks and personal safety are important, HR is also called upon to: Promote employee health and well-being Protect organizational assets from loss and liability Identify and comply with the laws that apply to their business Focus on preventing risk to all stakeholders Design health and safety programs that meet the diverse needs of international human resource management Develop policies that communicate both employer and employee rights and responsibilities, and procedures to protect physical, ﬁnancial, and human assets WEBC07 04/03/2017 322 10:33:42 Page 322 A Guide to the Human Resource Body of Knowledge Train and communicate with the workforce on policies and identiﬁed hazards in the workplace Work with internal and external resources to plan and respond to disasters and emergencies Comply with record-keeping and notice requirements Risk Management Assessing and preventing threats The process of analyzing potential threats and deciding how to prevent them A Focus on Compliance Many of the risk management efforts of the past have placed a heavy emphasis on complying with the standards established by the Occupational Safety and Health Administration (OSHA). Covered in more detail in the labor law appendix, OSHA continues to consider and adopt various safety standards designed to prevent incidents in the workplace (see Figure 7.1). The National Institute for Occupational Safety and Health (NIOSH) exists to study trends, patterns, and the science of workplace safety. NIOSH often makes recommendations to OSHA for standards that should be adopted. State and local governments and unions play a part in obligating employers to worker safety. For example, in the Central Valley of California, where summer temperatures frequently exceed 100 degrees, agricultural workers were experiencing high incidents of heat illness, heat stroke, and death. The problem became so severe that California adopted a Temporary Emergency Standard for employers, bypassing the regular process for approving new safety standards. In order to comply, affected employers must provide training for employees, and access to water, shade, and rest under hot conditions. Figure 7.1 Focus of Risk Management Responsibilities and Knowledge WEBC07 04/03/2017 10:33:42 Page 323 Risk Management 323 The European Union also has adopted a framework for occupational safety and health standards. The European Agency for Safety and Health at Work issue OSH directives (EU-OSHA). Similar to the American OSHA standards, these directives provide guidance to employers in the areas of evaluating, avoiding, and combating safety and health risks to employees and the company. Unions and works councils also take responsibility for designing and enforcing workplace safety provisions. For countries without legal regulations governing employment safety and health programs, international HR practitioners will need to adapt practices in areas of health and safety that are culturally relevant to protect both the workers and the employer from risk and liability. Dealing with outdated equipment and a poorly trained workforce often is addressed through an international health and safety management program. Regardless of the existence of laws governing employer safety requirements, the prudent HR professional has in place steps to address workplace risk. As with most other HR activities, these steps are the result of a needs assessment. Risk Assessments How do we know what laws apply to our organization? What clear and present dangers lurk in the ﬁgurative cubicles of our facilities? What is the root cause of injuries at our workplace? Who is at risk for global illnesses, and how do organiza tions prevent them? How can HR prove to legal agencies that the organization is taking steps to prevent injuries and accidents from occurring? The answers to these questions can be found by doing the all-important HR task of conducting needs analyses, conducting risk assessments, or conducting threat assessments. Regard less of what the process is called at your company, there are a variety of tools and resources available that you need to know about in order to accomplish this task. These are covered next. Self-Inspections A safety self-inspection documents an employer’s effort to identify hazards and take corrective steps. The goal of these efforts is to correct hazards and prevent incidents. For this reason the ﬁndings may be used to: Communicate new hazards to affected employees Coach employees on safe work practices and procedures Discipline individuals for unsafe acts or for failing to follow safety procedures Document unsafe conditions and abatement efforts Identify the need for new safety procedures or rules WEBC07 04/03/2017 324 10:33:42 Page 324 A Guide to the Human Resource Body of Knowledge Recommend personal protective equipment Prepare for a formal inspection by a government agency, customer, or insurance provider OSHA has on its website a self-inspection checklist that employers may modify to ﬁt their individual needs. From a general perspective, OSHA recommends that employers review the following: Processing, receiving, shipping, and storage Equipment, job planning, layout, heights, ﬂoor loads, projection of materials, materials handling and storage meth ods, training for materials handling equipment. Building and grounds conditions Floors, walls, ceilings, exits, stairs, walkways, ramps, platforms, driveways, aisles. Housekeeping program Waste disposal, tools, objects, materials, leakage and spillage, cleaning methods, schedules, work areas, remote areas, storage areas. Electricity Equipment, switches, breakers, fuses, switch boxes, junctions, special ﬁxtures, circuits, insulation, extensions, tools, motors, grounding, national electric code compliance. Lighting Type, intensity, controls, conditions, diffusion, location, glare and shadow control. Heating and ventilation Type, effectiveness, temperature, humidity, controls, natural and artiﬁcial ventilation and exhausting. Machinery Points of operation, ﬂywheels, gears, shafts, pulleys, key ways, belts, couplings, sprockets, chains, frames, controls, lighting for tools and equipment, brakes, exhausting, feeding, oiling, adjusting, maintenance, lockout/tag-out, grounding, work space, location, purchasing standards. Personnel Training, including hazard identiﬁcation training; experience; methods of checking machines before use; type of clothing; personal protective equipment (PPE); use of guards; tool storage; work practices; methods for cleaning, oiling, or adjusting machinery. Hand and power tools Purchasing standards, inspection, storage, repair, types, maintenance, grounding, use and handling. Chemicals Storage, handling, transportation, spills, disposals, amounts used, label ing, toxicity or other harmful effects, warning signs, supervision, training, protective clothing and equipment, hazard communication requirements. Fire prevention Extinguishers, alarms, sprinklers, smoking rules, exits, personnel assigned, separation of ﬂammable materials and dangerous operations, explosionproof ﬁxtures in hazardous locations, waste disposal and training of personnel. WEBC07 04/03/2017 10:33:42 Page 325 Risk Management 325 Maintenance Regular and preventive maintenance on all equipment used at the worksite, recording all work performed on the machinery, and training personnel on the proper care and servicing of the equipment. Personal protective equipment Type, size, maintenance, repair, age, storage, assignment of responsibility, purchasing methods, standards observed, training in care and use, rules of use, method of assignment. Transportation Motor vehicle safety, seat belts, vehicle maintenance, safe driver programs. First aid program and supplies Medical care facilities locations, posted emergency phone numbers, accessible ﬁrst aid kits. Evacuation plan Establish and practice procedures for an emergency evacuation (e.g., ﬁre, chemical or biological incident, bomb threat); include escape procedures and routes, critical plant operations, employee accounting following an evacuation, rescue and medical duties, and ways to report emergencies. Employer self-inspections should be conducted on a regular basis. For example, you could do a daily walk-through of the facility to ensure that no immediate hazards exist such as blocked emergency exits or slip/trip hazards. On a monthly or quarterly basis you may want to complete a full-scope inspection, such as the one recom mended by OSHA. On a semiannual or annual basis, it may be prudent to work with your insurance carrier, ﬁre department, building inspector, or other external resource to ensure your workplace remains free from notable hazards. Job Hazard Analysis OSHA deﬁnes the term hazard as “the potential for harm.” A job hazard analysis is a tool used to evaluate hazards that are job speciﬁc. By evaluating these hazards, employers can take steps to control the exposure and thus reduce the likelihood of an injury, illness, or accident. As with most assessments, a focus on prevention will include: Communicating hazards to employees Training affected workers on safe work practices Developing control and response plans Selecting personal protective equipment (PPE) In order to complete a job hazard analysis, it is important to involve the employees who are doing the work. Employees understand best the potential risks associated with the environment or equipment relevant to the job tasks. Their WEBC07 04/03/2017 326 10:33:42 Page 326 A Guide to the Human Resource Body of Knowledge Figure 7.2 Effective Hazard Controls supervisor is also a good resource, as he or she may have a unique perspective to contribute on how a hazard may be eliminated. If a hazard cannot be completely eliminated, ask the supervisor and employees for solutions related to the hazard controls found in Figure 7.2. Deciding which jobs to evaluate may seem a daunting task to the HR profes sional working at a company with hundreds of job classiﬁcations. A best practice is to analyze injury and accident records to look for jobs that have higher incidents of injury. Along with frequency, look for which body parts are most commonly affected. Sort the data three ways—at the organizational, department, and individ ual levels. Next, identify high-hazard jobs in which ﬁre or chemicals are used. Review positions that involve risk taking, heights, or ladder use, paying special attention to environments in which employees work in extreme heat or cold. These are all excellent places to start the job hazard analysis process. Don’t forget to review nearmiss reports as well. OSHA has identiﬁed the following questions to ask when conducting a job hazard analysis: What can go wrong? What are the consequences? How could the hazard arise? What are other contributing factors? How likely is it that the hazard will occur? A sample job hazard template is found in Table 7.1. Injury and Accident Data Investigating all incidents—injuries, accidents, and near misses—is a practical way for HR to identify the threats and exposure to all workers. Incident investigations are an important component of any organizational safety program. Often conducted by an individual supervisor or member of a safety committee, these investigations focus on determining if an unsafe act or unsafe WEBC07 04/03/2017 10:33:42 Page 327 Risk Management 327 Table 7.1 Sample Job Hazard Form Job Location Food Distribution Warehouse Analyst Safety Sandy Date Task Description Warehouse employees drive an electric pallet jack to place boxes of soda syrup onto a pallet for loading onto a delivery truck to customers. The syrup weighs between 30 and 50 pounds per box. Hazard Description The product is stored on a 12-tie pallet that is loaded four boxes high. When received, the pallet is stored ﬂush up against a warehouse wall. When employees deplete the ﬁrst row of boxes, they must reach across the tie and pull the product toward them, and then stack it onto the jack by hand. Hazards include: 1. The weight of the product combined with the excessive reach may lead to lower back or shoulder problems. 2. If an employee drops a box, it could cause severe injury to the foot or toes. Hazard Controls Engineering Pull the storage pallet away from the wall so the employees may access the product on all sides. Administrative Conduct safety training in proper lifting techniques, including safe reaching. PPE 1. Change the type of protective gloves to ones that allow for a better grip. 2. Require the wearing of steel- or Kevlar-toed work boots. condition has caused an injury, accident, or near miss. The unsafe act or unsafe condition is known as the indirect cause of the accident. The direct cause is the “unplanned release of energy, or hazardous material.” See Figure 7.3 for a visual representation of this concept from OSHA. When investigating injuries, it is important to identify both the direct and indirect causes of harm. This information is used to ensure that any future preventive efforts address the fundamental element(s) that contributed to a safety incident. Prevention efforts may be focused on eliminating an unsafe condition (see previous discussion of hazard controls) or addressing an unsafe act committed by a worker. Addressing employee unsafe acts is most commonly achieved through training, coaching, and/or discipline. A word of caution when using discipline, especially if an employee was injured: The discipline must address the employee’s unsafe behavior, not discipline the employee for WEBC07 04/03/2017 328 10:33:42 Page 328 A Guide to the Human Resource Body of Knowledge Figure 7.3 OSHA’s Analysis of Incident Causes Source: Occupational Safety and Health Administration (OSHA). getting hurt. The discipline may be interpreted as an act of retaliation against an employee for getting hurt or reporting an injury. Employee morale is also affected when injured workers are disciplined. See the “In Real Life” feature example. IN REAL LIFE... Joshua was a commercial driver for SodeCo, a food distribution warehouse in New Jersey. His daily responsibilities included delivering products to the fast-food establishments on his route. Many of his customers were open 24 hours, so Joshua usually was dispatched around 12:00 a.m. At his second stop of the morning it was still dark outside. Joshua was hand-carting in product while wearing earbuds and listening to music, even though SodeCo’s code of safe practices speciﬁcally prohibited nonmedically necessary ear wear. According to the restaurant video feed, a robber came up behind Joshua and slammed the butt of a gun into the back of his head, rendering him unconscious. A restaurant employee who witnessed the incident followed procedure and barricaded himself in the walk-in refrigerator while dialing 911. Joshua was taken by ambulance to the nearest hospital and diagnosed with a concussion and severe contusions, receiving several stitches as a result. In this case, the direct cause of injury was Joshua’s head being hit with a gun butt. The indirect cause of the injury was Joshua’s failure to follow company safety standards. WEBC07 04/03/2017 10:33:43 Page 329 Risk Management 329 Joshua’s coworkers were outraged and worried about him when they heard the news. The incident elevated driver concerns about the security risks associated with early-morning route stops. One driver declared that he was going to start carrying his gun on his route. Another insisted that his guard dog be allowed to ride shotgun in the cab of his truck. Still others demanded that all early-morning and key card stops be staffed with two workers. Amidst of all of this, human resources was faced with the need to potentially discipline Joshua for his unsafe act and violation of the code of safe practices. Investigative Steps Steps to an appropriate incident investigation may go as follows: Investigate the scene of the accident. Observe the conditions that were present, including the time of day, weather, lighting, and ﬂoors. Look for the presence of machine safety guards and observe if equipment appears to be well maintained. Take pictures or video of the surrounding area. Make note of any unusual or seemingly out-of-place objects. In this step, you are the detective seeking to ﬁnd any environmental (unsafe) condition that may have caused or contributed to the accident. Interview involved employees and witnesses. To avoid contamination, it is important to separate individuals as soon as is reasonable following an incident. Ask for statements regarding what was observed, allowing each person to explain it without prompting and in his or her own words. Document ﬁndings. Many employers ﬁnd it useful to have an incident report for documentation purposes. This is in addition to documents required by your insurance carrier or OSHA. The incident report is a tool for internal use. It allows for the collection of consistent information for comparison of hazards. It often serves as the primary reference point for HR or the safety committee to determine both direct and indirect causes, along with any contributing factors. First Responders The ﬁrst priority when responding to the scene of a workplace accident is to secure the area so nobody else gets hurt. The second priority is obtaining care for any injured party. In many cases, achieving both of these outcomes may require the designation and training of ﬁrst responders. The depth and scope of ﬁrst responder responsibilities may vary. A risk assessment will help the proactive HR professional determine the need, deﬁne the responsibilities, establish the procedure, and train the workers. WEBC07 04/03/2017 330 10:33:43 Page 330 A Guide to the Human Resource Body of Knowledge Historical Data Another way to identify risks associated with the business of work is to review historical data. When looking at past incidents, patterns tend to emerge. This bears out even at a national level, and trickles down through industry statistics and geographic clusters. Take a look at the feature to practice interpreting data. INCIDENTS BY THE NUMBERS On a national scale, OSHA collects data pertaining to the most commonly violated standards by employers (see Table 7.2). Construction workers are considered at high risk for workplace fatalities—in 2014, one in every ﬁve workplace fatalities occurred in the construction industry. Through trend analysis, OSHA has identiﬁed the “Fatal Four,” those workplace injuries that account for more than 60 percent of the construction industry fatalities. These are falls, electrocution, being struck by an object, and being caught in-between. As an experienced HR professional, what trends do you see in the construction industry data found in the table? What steps would you take to eliminate these hazards? If you’re not sure, go online and search for OSHA’s “Construction Pocket Guide: Worker Safety Series.” Find and read the section “Hazards and Solutions” for a review of recommended abatement activities for the hazards. What suggestions does OSHA offer that are engineering controls? Which are administrative controls? How many of the solutions include personal protective equipment? Table 7.2 Top 10 Most Frequently Cited OSHA Standards Violations, FY 2015 General Industry Standards Construction Industry Standards #1 Fall protection #2 Hazard communication #4 Respiratory protection #3 Scaffolding #7 Ladders #5 Lock out/tag out #6 Powered industrial trucks (forklifts, etc.) #8 Electrical, wiring methods, components and equipment #9 Machinery and machine guarding, general requirements #10 Electrical systems design Incidence Rates Calculating incident rates is another way an employer may identify the needs of a workplace safety and health program. OSHA deﬁnes an incident rate as the number (frequency) of injuries, illness, or lost workdays per 100 full-time workers. Rates are calculated using the formula: N 200; 000 EH WEBC07 04/03/2017 10:33:43 Page 331 Risk Management 331 where: N = number of injuries and illnesses, or number of lost workdays EH = total hours worked by all employees during a month, quarter, or ﬁscal year. 200,000 = base for 100 full-time equivalent workers (working 40 hours per week, 50 weeks per year) After an employer has assessed the types of risks to its employees and company, the next step is to design programs and plans for prevention and response. Injury and Illness Prevention Programs An injury and illness prevention plan or program (IIPP) is part of an overall safety management program designed to reduce or eliminate workplace injuries and illnesses. Employers with 10 or fewer employees are not generally required to have a written plan in place. In order for an IIPP to be successful, OSHA recom mends that: There is top-level commitment from senior management, and employees are encouraged to participate in workplace safety and health efforts. The company regularly engages in workplace hazard analyses. There is a hazard prevention and control program in place to address identiﬁed hazards before an injury or illness occurs. The company regularly holds safety training meetings to communicate hazards and educate the workforce on safe behaviors. Workplace Injuries and Illnesses The work-relatedness of injuries affects inclusion of the event in the incident rate calculation, recordability for OSHA record-keeping purposes, and compensability under an employer’s workers’ compensation insurance. For an injury to be workrelated, the employee had to have been injured or become ill while acting within the scope of his or her job. For example, let’s say a receptionist is driving to the post ofﬁce as part of her regular duty to pick up mail. She is in a car accident and breaks her foot. This injury would be considered to be work-related because she was acting on behalf of her employer at the time of the event. Compare this example with an employee who is driving to work as part of her normal commute and is in a car accident, also breaking her foot. This latter incident would not be work-related, as she was not acting on behalf of her employer at the time. These distinctions are important, particularly when complying with OSHA’s record-keeping requirements. Most employers with 10 or more workers must WEBC07 04/03/2017 332 10:33:43 Page 332 A Guide to the Human Resource Body of Knowledge complete the OSHA 300 log for any recordable illness or injury, and post the summary from February through April. Employers are not required to record ﬁrst aid—only events. OSHA deﬁnes ﬁrst aid very speciﬁcally: Using a nonprescription medication at nonprescription strength (for medications available in both prescription and nonprescription form, a recommendation by a physician or other licensed health care professional to use a nonprescription medication at prescription strength is considered medical treatment for recordkeeping purposes). Administering tetanus immunizations (other immunizations, such as hepatitis B vaccine or rabies vaccine, are considered medical treatment). Cleaning, ﬂushing, or soaking wounds on the surface of the skin. Using wound coverings such as bandages, Band-Aids, or gauze pads, or using butterﬂy bandages or Steri-Strips (other wound-closing devices such as sutures or staples are considered medical treatment). Using hot or cold therapy. Using any nonrigid means of support, such as elastic bandages, wraps, nonrigid back belts, and the like (devices with rigid stays or other systems designed to immobilize parts of the body are considered medical treatment for recordkeeping purposes). Using temporary immobilization devices while transporting an accident victim (e.g., splints, slings, neck collars, back boards, etc.). Drilling of a ﬁngernail or toenail to relieve pressure, or draining ﬂuid from a blister. Using eye patches. Removing foreign bodies from the eye using only irrigation or a cotton swab. Removing splinters or foreign material from areas other than the eye by irrigation, tweezers, cotton swabs, or other simple means. Using ﬁnger guards. Using massages (physical therapy or chiropractic treatment are considered medical treatment for record-keeping purposes). Drinking ﬂuids for relief of heat stress. See Figure 7.4 for the decision tree of when to record an injury or illness that occurred at the workplace. Electronic Reporting In 2017, a new rule took effect requiring some employers to submit their injury data electronically. OSHA will analyze this information for use in trend identiﬁca tion and prevention efforts. The information may also be posted on the OSHA website to “encourage employers to improve workplace safety and provide WEBC07 04/03/2017 10:33:43 Page 333 Risk Management 333 Figure 7.4 When to Record an Injury valuable information to workers, job seekers, customers, researchers and the general public.” See Figure 7.5 for the compliance schedule. Compensation Insurance Employers have a responsibility to return injured workers to their preinjured state, or to compensate injured workers if they cannot be rehabilitated. This is an absolute right of all employees, and employers are therefore required to carry workers’ compensation insurance (paid for by the employer) as part of an overall safety management program. Things you should know about workers’ compensation insurance include: WEBC07 04/03/2017 334 10:33:43 Page 334 A Guide to the Human Resource Body of Knowledge Figure 7.5 OSHA Electronic Reporting Schedule Source: Occupational Safety and Health Administration (OSHA). Compensation plans are state run. Requirements will vary state by state. Insurance coverage often provides categories of care. Continuing medical treatment and rehabilitation are well-known beneﬁts of workers’ compensation insurance. Wage replacement income owing to lost time is also covered, as is future earnings replacement in the event of a permanent disability. In the case of a fatal injury, survivors beneﬁts are paid to the worker’s family. Workers’ compensation is experience rated (the rating is often referred to as the experience modiﬁer or “ex mod”). Similar to auto insurance, the premium amounts are correlated to use: the more claims administered, the higher the premium. Workers’ compensation insurance premiums have a baseline that is based on industry trends. For example, a service-oriented company that employs only ofﬁce workers will have a lower ex mod than a mining company with conﬁned-space workers. The higher the ex mod, the higher the premium. Crisis Management Plans Business travelers and expatriates have unique needs for an employer’s health and safety programs. Employers have a global duty of care to keep international assignees safe. A crisis management plan takes into account factors such as language barriers, access to medical services, availability of emergency response, and infrastructure components that will drive the ability of an employer to respond to an international threat or industrial accident. International HR practitioners should know and communicate to assignees the proper agencies to contact, such as the Bureau of Consular Affairs of the U.S. Embassy, and who the employee should contact internally in the event of an emergency. WEBC07 04/03/2017 10:33:44 Page 335 Risk Management 335 Kidnap and ransom insurance is another practical tool employers may use to assure international assignees that the employer takes the risk of hazardous assign ments seriously. Brokers who provide this type of policy are available to help organizations create a crisis management plan, and partner with resources abroad to provide communication, negotiation, medical, and emergency travel service when needed. Kidnap and Ransom Insurance Protection for employees in high-risk areas Policies that reimburse employees’ losses due to kidnapping or extortion in highrisk areas of the world Return to Work Programs A return to work (RTW) program is the effort by the employer to help injured or ill employees get back to work in a transitional capacity until they are able to return to full-duty work. RTW is not only for those with a work-related injury. These programs can be built to respond to the many types of disabilities that may keep some people from getting back to work at all. RTW programs beneﬁt both the employer and the employee. For example: Employer Wage replacement is often paid for through the company’s workers’ compensation insurance carrier. This adds to the overall cost of the injury, and thus affects the employer’s experience modiﬁer on which annual premiums are calcu lated. An RTW program ﬁnds tasks, duties, and responsibilities that accommodate an employee’s limitations, and the employee is thus paid through regular payroll rather than collecting an insurance payment while on lost time. For non-work related injuries, bringing people back to work in a restricted capacity has been shown to lower the overall lost time, keeping work ﬂow, customer, and morale disruptions to a minimum. Employee For the employee, workers’ compensation and disability insurance law has built in maximum payment amounts. In New York, for example, the maximum amount injured workers may earn while off work is two-thirds of their average weekly wage. This may cause ﬁnancial hardship for the employee. In an RTW situation, an employer may choose to pay the employee’s full wage to incentivize the employee to come back to work so the employer gains the beneﬁt of a reduced total claim amount. In some cases, however, the employer may be able to lower the injured worker’s wages to account for the lighter duty. This is a strategic consideration for discussion when planning an RTW procedure. WEBC07 04/03/2017 336 10:33:44 Page 336 A Guide to the Human Resource Body of Knowledge An important member of a return to work program is the licensed physician. The doctor diagnosing and treating the injured worker must have access to an objective summary of the employee’s regular tasks, duties, and responsibilities on the job in order to accurately determine restrictions. This allows the physician to provide clear instructions to both the employer and the employee on what work may be done in a modiﬁed capacity, or not at all. For this reason, HR should be prepared to send over a current, accurate job description describing the essential functions, physical requirements, and mental abilities that are part of regular job duties. In some cases, there is a discrepancy between what employees think they are able to do and what the doctor says they are able to do. In these cases, an independent medical exam (IME) may be necessary. Performed by a neutral third-party physician, the IME is used to provide an objective view of the employee’s condition. Reasonable accommodation is the process of the employer working within the restrictions conveyed by the doctor. It has legal implications under the Americans with Disabilities Act, in which employers are obligated to engage in an interactive dialogue to determine if the employee is qualiﬁed to work. A Focus on Prevention Despite all the different ways employees can be injured at work, employers can take very effective steps to reduce exposures. These steps begin with planning. The most valuable output from the planning process is not always the written plan. The process of assessing risk, talking with employees, and reaching out to the experts serves to create depth in organizational behaviors for managing risk. For this reason, HR should not be locked in the back ofﬁce ﬁlling in the blanks on a template in response to a consultant’s urging. HR must advocate for thoughtful, engaged action to produce effective programs that have management and employee support. Detailed plans, policies, and procedures allow employers to demonstrate compliance with various labor laws, communicate expected standards of behavior to employees, and develop prevention and intervention procedures where appropriate. Disaster Preparation and Continuity Planning Natural and man-made disasters occur in all parts of the world, and present very real threats to employee well-being and business survival. Acts of terrorism, acts of workplace violence, and natural disasters such as hurricanes have prompted companies to expand the role of human resources to prepare for disasters. WEBC07 04/03/2017 10:33:44 Page 337 Risk Management 337 Ready.gov is a website developed by the Department of Homeland Security (DHS) that has several excellent examples of plans and actions employers may take to be ready in a crisis. The threat assessment in this planning competency relates to identifying business impact. As described by the DHS, HR must consider and analyze the tangible and intangible impact of: Physical damage to a building or buildings Damage to or breakdown of machinery, systems, or equipment Restricted access to a site or building Interruption of the supply chain, including failure of a supplier or disruption of transportation of goods from the supplier Utility outage (e.g., electrical power outage) Damage to, loss of, or corruption of information technology, including voice and data communications, servers, computers, operating systems, applica tions, and data Absenteeism of essential employees Figure 7.6 shows the four main steps described by the DHS to take to prepare a business continuity plan: 1. Conduct a business impact analysis. Every employer has unique conditions affecting the needs of continuity. Factors such as geographic location, availability of response resources, industry, and specialized needs of customers will all drive plan components. 2. Create recovery strategies. Working with internal and external experts, HR will drive the brainstorming sessions to identify strategies in response to the business impact measures identiﬁed in step 1. 3. Develop the plan. More than a written plan, this step involves the coordination of all resources and tools to use should a disaster event occur. 4. Practice the plan. This step involves training trainers and conducting drills to evaluate both what worked and what still needs to be perfected. See Table 7.3 to review OSHA’s requirements for emergency response and ﬁre prevention plans. The FBI describes some disaster events as “media-intense.” For example, the highly visible post ofﬁce shootings in the 1980s and 1990s prompted the pejorative phrase going postal to reference a disgruntled employee. The terrorist attack on September 11, 2001, was the largest incident of workplace disaster in American history. In the event of a disaster, a response plan should explore how any media inquiries will be addressed. The post ofﬁce and 9/11 references are both examples of disasters classiﬁed as workplace violence. These are covered next. WEBC07 04/03/2017 338 10:33:44 Page 338 A Guide to the Human Resource Body of Knowledge Figure 7.6 Business Continuity WEBC07 04/03/2017 10:33:45 Page 339 Risk Management 339 Table 7.3 OSHA Response Plan Requirements All of OSHA’s safety standards have emergency action plan requirements. Following are examples from the General Industry Standards for emergency action plans and ﬁre prevention plans: Emergency Response Plan 1910.38 (a) through (f) Emergency action plans: Fire Prevention Plan a. Application. An employer must have a ﬁre prevention plan when an OSHA standard in this part requires one. The a. Application. An employer must have an requirements in this section apply to emergency action plan whenever an each such ﬁre prevention plan. OSHA standard in this part requires one. The requirements in this section apply to b. Written and oral ﬁre prevention plans. A ﬁre prevention plan must be in each such emergency action plan. writing, be kept in the workplace, and b. Written and oral emergency action be made available to employees for plans. An emergency action plan must review. However, an employer with 10 be in writing, kept in the workplace, and or fewer employees may communicate available to employees for review. How the plan orally to employees. ever, an employer with 10 or fewer c. Minimum elements of a ﬁre preven employees may communicate the plan tion plan. A ﬁre prevention plan must orally to employees. include: c. Minimum elements of an emergency 1. A list of all major ﬁre hazards, proper action plan. An emergency action plan handling and storage procedures for must include at a minimum: hazardous materials, potential igni 1. Procedures for reporting a ﬁre or other tion sources and their control, and emergency; the type of ﬁre protection equip 2. Procedures for emergency evacuation, ment necessary to control each including type of evacuation and exit major hazard; route assignments; 2. Procedures to control accumulations 3. Procedures to be followed by employ of ﬂammable and combustible waste ees who remain to operate critical materials; plant operations before they evacuate; 3. Procedures for regular maintenance 4. Procedures to account for all employ of safeguards installed on heat-pro ees after evacuation; ducing equipment to prevent the accidental ignition of combustible 5. Procedures to be followed by employ materials; ees performing rescue or medical dut ies; and 4. The name or job title of employees responsible for maintaining equip 6. The name or job title of every ment to prevent or control sources employee who may be contacted by of ignition or ﬁres; and employees who need more informa tion about the plan or an explanation 5. The name or job title of employees of their duties under the plan. responsible for the control of fuel source hazards. (continued ) WEBC07 04/03/2017 340 10:33:45 Page 340 A Guide to the Human Resource Body of Knowledge Table 7.3 OSHA Response Plan Requirements (continued ) Emergency Response Plan Fire Prevention Plan d. Employee alarm system. An employer d. Employee information. An employer must have and maintain an employee must inform employees upon initial alarm system. The employee alarm sys assignment to a job of the ﬁre tem must use a distinctive signal for each hazards to which they are exposed. purpose and comply with the require An employer must also review with ments in §1910.165. each employee those parts of the ﬁre prevention plan necessary for e. Training. An employer must designate self-protection. and train employees to assist in a safe and orderly evacuation of other employees. f. Review of emergency action plan. An employer must review the emergency action plan with each employee covered by the plan: 1. When the plan is developed or the employee is assigned initially to a job; 2. When the employee’s responsibilities under the plan change; and 3. When the plan is changed Source: Occupational Safety and Health Administration (OSHA). Workplace Violence Workplace incivility can very quickly lead to harassing and bullying behaviors. Rude coworkers and lack of courtesy contribute to an overall environment of tension and strain. In a climate where incivility and disrespect are the norm, negative interactions and conﬂict can quickly escalate into hostile, bullying, or violent behaviors. Workplace violence plans and programs should be primarily focused on taking proactive steps to minimize the likelihood of a violent incident on the job, and plan for a coordinated response should an event take place. The ﬁrst step is to create and encourage a company culture where professionalism and courtesy rule all interactions, and managers are trained in conﬂict deescalation when necessary. In order to be effective and taken seriously, top management must support prevention efforts. In some cases this means taking serious steps to drive culture changes in a toxic environment. A lack of trust within a company may also require top-level intervention to avoid workplace violence. Organizational cultural issues such as abusive managers will act as barriers to any practical efforts of HR to address and, most important, prevent workplace violence issues. WEBC07 04/03/2017 10:33:45 Page 341 Risk Management 341 An example of the practical efforts of an HR professional to address workplace violence threats is to help select and develop a program. A threat assessment is one tool that may be used to accomplish this effort. In addition, working with local law enforcement agencies or professional threat assessors will educate HR on the needs of the organization. These professional resources are able to offer advice on how best to deal with escalated events characterized by weapons, hostage situations, or terrorist threats. Gathering legal advice and concerns regarding potential loss and liability will also be an important step in developing the company prevention and response plans. Legal resources that will be charged with defending any policy or program should also be part of the planning or review process. Preventive steps include written policies, employee training, and response planning to minimize the effect of an incident. A written policy should be in place that deﬁnes the behavioral expectations for all employees. This includes a list of prohibited conduct, such as: Threatening physical or aggressive contact Threatening an individual or his or her family and friends Harassing verbal or written communications Stalking Veiled threats or intimidation Domestic Violence Domestic violence is another area that should be addressed in a policy. The Centers for Disease Control (CDC) refers to intimate partner violence (IPV) as physical, sexual, or psychological harm by a current or former partner or spouse. The CDC estimates that victims of severe IPV lose thousands of days of paid work each year as the result of violent episodes. An employer may choose to address the threat of workplace violence through a statement of zero tolerance in its handbook. The policy may establish how the employer will respond if an employee is convicted of a crime of violence, reserving the right to discipline/discharge workers under certain conditions. An effective policy will deﬁne the reporting procedure for employees who believe they have been victims of workplace violence, the investigation procedure, the rights and responsibilities of affected employees, and a description of how the employer will deal with issues of conﬁdentiality and privacy. Employee Training Training offers many opportunities to employers who wish to have a comprehensive workplace antiviolence program. Training teaches employees about acceptable WEBC07 04/03/2017 342 10:33:45 Page 342 A Guide to the Human Resource Body of Knowledge and unacceptable workplace behaviors. A training session should review warning signals that often precede violence, and teach the employees how to report their concerns. Supervisor training is an important component of an employer’s violence prevention efforts. Teaching supervisors how to manage and deescalate conﬂict may reduce the likelihood of a situation getting out of control. Educating supervisors on the legal liability issues associated with workplace violence— including personal liability should they become a harasser—can help communi cate why they are critical to an organization’s prevention efforts. Helping supervisors recognize warning signs of violence gives them the ability to intervene early, while giving them a clear, supportive procedure to guide their efforts. All training should encourage employees to report suspicious behavior, or behavior of their coworkers that seems out of character or escalating in frequency or force. The employees need to know when to report and what to report, and be assured that the company takes their concerns seriously. Finally, employee training should make clear that employees who report concerns will not be retaliated against. Often, a combination of the employer’s own policy and code of safe practices along with an external resource such as a professional training program is effective for communicating the workplace antiviolence program elements. Signs of Violence Despite an organization’s best attempts, workplace violence incidents unfortunately still occur. An employer must be prepared to respond to a crisis, whether it is related to domestic issues, an escalated workplace conﬂict, disgruntled former employees, or terrorism. For this reason, taking the lead in response planning is a critical function of human resources. In 2015, an active shooter/attempted bombing situation took place in San Bernardino, California. The shooter was an employee who targeted his coworkers at an ofﬁce holiday party, killing 14 and seriously injuring another 22. This and other tragedies leave many wondering whether these situations can be predicted. The surprising answer is that sometimes they can indeed be foreseen. There are consistent behavioral signals that may indicate a problem is escalating; OSHA notes that it is often more likely that a pattern or multiple indicators will be present. These may include: Attendance problems Excessive sick leave, excessive tardiness, leaving work early, improbable excuses for absences WEBC07 04/03/2017 10:33:45 Page 343 Risk Management 343 Adverse impact on supervisor’s time Supervisor having to spend an inordinate amount of time coaching and/or counseling employee about personal problems, redoing the employee’s work, dealing with coworker concerns, and so on. Decreased productivity Making excessive mistakes, poor judgment, missed dead lines, wasting work time and materials Inconsistent work patterns Alternating periods of high and low productivity and quality of work, inappropriate reactions, overreaction to criticism, and mood swings Concentration problems Easily distracted and often has trouble recalling instruc tions, project details, and deadline requirements Safety issues More accident prone, disregard for personal safety as well as equip ment and machinery safety, needless risks Poor health and hygiene Marked changes in personal grooming habits Unusual/changed behavior Inappropriate comments, threats, throwing objects Evidence of possible drug or alcohol use/abuse Evidence of serious stress in the employee’s personal life Crying, excessive phone calls, recent separation Continual excuses/blame Inability to accept responsibility for even the most inconsequential errors Unshakable depression Low energy, little enthusiasm, despair The presence of one or more of the indicators does not necessarily mean a violent act will occur. An employee may be suffering from a physical or mental illness or other personal problems. However, knowing the signs allows human resources to design intervention services. Examples include employee assist ance programs, staff nurses trained as mental health advisers, a referral agency, or even just the ear of a sympathetic supervisor—these may all serve to defuse an act before it occurs, and offer the employee help at a time when it is clearly needed. Some of the more notable acts of workplace violence seem to be around workplace homicide. But a far greater percentage of violent incidents take the form of damage to company property, verbal abuse or aggression, and concealing or brandishing a weapon. WEBC07 04/03/2017 344 10:33:45 Page 344 A Guide to the Human Resource Body of Knowledge Again, these examples are a matter of degree, and should be framed in the context of other behaviors. However, direct threats should always be taken seriously. Other Preventive Efforts Taking preventive steps within the scope of other functional areas may also serve HR’s priority on prevention. Consider background checks to screen out any potentially violent new hires, a function of Workforce Planning and Employment. Or conduct employee surveys as part of an employee labor relations strategy to identify any unknown threats. Management coaching using techniques deﬁned in the Human Resource Development chapter may be appropriate. And ﬁnally, workplace violence incidents are more likely to be caused by workers under the inﬂuence of drugs or alcohol. This means that an employer’s protective efforts must include a substance abuse program. Substance Abuse Another plan HR must prepare is a substance abuse plan. There are many reasons why an employer should have plans and policies in place to address substance abuse in the workplace. The U.S. government has found that more than 70 percent of substance abusers have jobs, making this relevant across industries and states. Substance abusers tend to have lower productivity, increased absenteeism, more accidents, and higher health care costs. Many employers start with a policy that addresses the use of both legal and illegal substances that affect work performance. Considerations include notify ing the employee that the employer reserves the right to search employee belongings if an employee is suspected of possessing alcohol, controlled substances, or illegal drugs. It is also necessary to address the accommodation of an employee who is seeking treatment or rehabilitation for an addiction. A plan may deﬁne what steps an organization will take, including discipline expectations, referral to an employee assistance program, or time off from work to seek treatment. Supervisors and managers should be trained to identify the signs of an employee who may be under the inﬂuence. In some cases training is required, such as the reasonable suspicion training under the Department of Transportation rules governing commercial drivers. Speciﬁcally, the Federal Motor Carrier Safety Administration requires:... supervisors of commercial motor vehicle drivers who operate vehicles that require a commercial driver license to take 60 minutes of training on the symptoms WEBC07 04/03/2017 10:33:45 Page 345 Risk Management 345 of alcohol abuse and another 60 minutes of training on the symptoms of controlled substances use (120 minutes in total). The purpose of this training is to teach supervisors to identify circumstances and indicators that may create reasonable suspicion that a driver is using or under the inﬂuence of alcohol or drugs, supporting referral of an employee for testing. —49 CFR 382.603 Signs and symptoms covered in training include: Physical symptoms Slurred speech, ﬂushed face, staggering, fatigue, rolling or red eyes Behavioral symptoms Poor job performance, irritability, aggressiveness, missed work or tardiness Psychological symptoms Depression, emotional instability, anxiety Employer drug and alcohol testing policies include language related to postoffer, postinjury, and reasonable suspicion, sometimes called ﬁt-for-duty testing. Substance Abuse Excessive use of drugs, alcohol, or other addictions Use of habit-forming drugs or substances that impair behavior Physical Asset Protection Security audits will identify the types of physical hazards present at a place of work. Calling upon the expertise of facilities managers and HR, along with third-party experts looking for vulnerabilities, will produce a to-do list of meaningful tasks. Factors such as access, lighting, and trafﬁc patterns are evaluated and assessed against potential risk. Taking this step is important not only for employee protection, but also for company image. Wal-Mart has taken a beating in the media for having multiple layers of security against store theft, but paying lackluster attention to securing the stores’ acres of parking lots. Several attacks on customers have been featured on the news, forcing Wal-Mart to defend its security priorities. HR is usually responsible for collecting requests for proposals (RFPs) for security services to help guard facilities if necessary. Risk to a company’s cash ﬂow can be controlled speciﬁcally through its inventory levels. For example, $100,000 worth of cooling unit compressors lining the WEBC07 04/03/2017 346 10:33:45 Page 346 A Guide to the Human Resource Body of Knowledge warehouse racks represents $100,000 of a noncash asset. For this reason, steps should be taken to help control the variability of purchasing and to moderate cash ﬂow. While not an HR task per se, it may be necessary for HR to work with employees to develop plans and procedures to regulate the process. Cyber Vulnerability and Liability “Password1.” Look familiar? It might, because a 2015 Trustwave Global Security report identiﬁed it as still the most common password in use today. This and other ﬁndings are troubling in the context of data security. Industries such as retail and fast food remain high on the list of targets; speciﬁcally, criminals attempt to gain access to the information stored on the magnetic strip of a credit or debit card used for customer purchases. The Trustwave report found that 50 percent of the victims targeted were in the United States, followed by 24 percent in Australia and 14 percent in the United Kingdom. It’s obvious that in a world of business being conducted more frequently online, employers have to pay attention to cyber liabilities. The ﬁrst step to reducing liability is to have a written policy clearly outlining the terms of acceptable use of all sensitive information. Data classiﬁcation policies direct employees on what information is most sensitive, and allows them to follow proper procedures to protect it. Asking employees to sign conﬁdentiality agreements is a paper defense against stolen trade secrets and other proprietary information. Technical solutions such as tiers of access can be a simple, effective way to reduce the risk of data theft. Educating employees on the importance of password protection can help as well. The Trustwave report shared that it takes one day to break an eightcharacter password compared to 591 days it takes to crack a 10-digit code. More complex ﬁrewalls must be investigated and adopted as recommended by experts, driven by the nature of work that HR is called upon to guard. HR may also research and form a business case to management to purchase cyber liability insurance, which covers employee and customer information should theft occur. Taking action when a breach is discovered is an urgent task for HR. Practices begin by notifying those who may have been affected by the breach. Some employers take the additional precaution of offering credit monitoring protection for 12 to 24 months to help protect victims of data theft from experiencing a tangible loss. Additionally, most employers have a very low tolerance for system emergen cies. Reliance on computers, voice over Internet Protocol (VOIP) lines, and network connectivity disruptions can shut down operations for any length of time. HR may participate in the effort to develop software, hardware, and behavioral strategies for data maintenance and recovery in the event of an emergency. WEBC07 04/03/2017 10:33:45 Page 347 Risk Management 347 Employee Communication and Safety Training In the absence of employee compliance behaviors, a company’s plans, procedures, and programs are mere paper tigers. Employees must know what is expected of them, and HR must take steps to test, audit, and measure the efﬁcacy of the programs. In general, human resources should conduct: New hire on-boarding and orientation presentations. Too often new hires are handed the handbook and asked to sign an acknowledgment form without any interpretation and support. This is not an effective way to communicate safety plans and procedures. Formal training sessions when a plan is changed or to remind workers of the expectations. These sessions don’t have to be classroom based. Asking employ ees to conduct safety walks with you while you point out what you are looking for trains them to be on the lookout for the same or similar issues. Training techniques is discussed more in the Human Resource Development chapter. Compliance training as required by law. Communication and training are so important that many safety standards have built these activities into employer efforts to comply with the law. HR must know what these requirements are and take steps to complete them. Risk Management Techniques There are four techniques an employer may use to manage the risks to the company. 1. Abate/eliminate the risk. Changing a work process to be safer is the ideal response to an identiﬁed hazard. Repositioning a computer server so the cords are shorter to eliminate a trip hazard is one example of hazard elimination. Another method is to substitute a less hazardous material or piece of equipment. For example, employers may switch to a water-based paint rather than a solventbased paint to reduce employee exposure to hazardous chemicals. Physical changes are the most effective way to reduce injuries, particularly when you eliminate the choice. An employee who has access to company bank passwords must be relied upon to choose not to use them for nefarious purposes. Simply limiting who has access to this information reduces the risk of a ﬁnancial loss. 2. Mitigate/reduce the exposure. Adding safety equipment such as machine guards, lockout/tag-out tools, or personal protective equipment is another way to respond to an identiﬁed hazard. So also is conducting employee training on proper use of equipment or tools. Checking for travel warnings prior to international business trips can also help employers make decisions that reduce or eliminate exposure. WEBC07 04/03/2017 348 10:33:45 Page 348 A Guide to the Human Resource Body of Knowledge 3. Transfer the risk. Transferring risk may include outsourcing the work to a subcontractor or vendor. Some employers opt to purchase insurance so that if an incident occurs, they have some protection from liability. Not all risk can be transferred, but it is one technique that can be effective in shrinking the target. Examples include corporate governance insurance, professional liability insur ance, and directors and ofﬁcers liability insurance. 4. Accept the risk. The ﬁnal risk management technique is for employers to accept a risk as a cost of doing business, and not engage in effort above and beyond normal business practices. For example, business bad debt seems to be unavoidable for many companies. Rather than employing a full-time collections agent or pursuing debtors through costly legal proceedings, an employer may identify a percentage of loss that is acceptable. The employer may then use the total as a tax write-off at the end of the year. Metrics Just as with any other HR function, employers must take steps to measure the success or failure of their workplace safety efforts. Conducting trend analysis using injury data from the past is one way to predict future hazards and identify whether current controls are effective. Workers’ compensation costs are a tangible cash asset that can be controlled through careful monitoring and intervention. Department incident data can point HR to areas of threat, targeting resources to minimize exposure. By emphasizing and measuring the efforts of safety and health programs, employers and employees will be better off. Positive outcomes include safer workplaces, lower insurance costs, and increased productivity. Suggested Study or Organizational Audit Activities Conduct an audit of your company’s injury and illness prevention plan. Use the resources available at www.osha.gov by searching for the term “injury and illness prevention programs.” Read through the various white papers, high lighting critical information, particularly those that are part of an overall compliance effort. In what areas does your employer’s plan exceed the federal recommendations? How can your plan be improved? Call your workers’ compensation provider and see if it offers any classes. If not, prepare interview questions ahead of time related to the administration of workers’ compensation insurance. Ask questions related to nondiscriminatory treatment, the criteria for delaying or denying claims, the incidents of fraud, and the areas where it most often occurs. WEBC07 04/03/2017 10:33:45 Page 349 Risk Management 349 Conduct a risk assessment to identify the potential ﬁnancial risks to your employer. Discuss/discover the executive strategy for dealing with these known risks. Does the C-suite prefer to eliminate, mitigate, transfer, or accept these risks? What internal ﬁnancial controls have been established to reduce loss? Find your employer’s OSHA Form 300 log for the past ﬁve years, and calculate the organization’s incidence rate. Now calculate the incident rate for each department. Are there any action steps you can take based on the ﬁndings of this information? Complete a job hazard analysis for the three jobs within your organization that have the highest incidents of injury. Work with supervisors to identify and review them, and take note of their concerns and challenges in incorporating hazard elimination strategies. Are they most concerned with the time required to implement strategies? The cost? The employee buy-in and ownership? Resolve to work with management to ﬁnd ways to reduce hazards to your workers. Log on to WorkersCompensation.com, and ﬁnd its list of “Best Blogs.” Research the links and discover information related to the risk management objectives found in this chapter. Search the blogs for related terms, such as “injury and illness prevention programs,” “return to work programs,” or types of “security risk assessments.” Make note of questions or thoughts; create mind maps to show relationships.

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