Printer Friendly

Loss control programs: the 10 most significant flaws.

State workers' compensation benefits continue to escalate at an alarming rate. These direct costs, both medical and indemnity, are but a fraction of the expense of a workplace accident, however. In many industries, the indirect costs such as decreased productivity, retraining of employees, product damage, and administrative and legal expenses can greatly surpass the actual direct costs associated with accidents. The best way to control these workers' compensation costs is to reduce the frequency and severity of the accidents themselves. One of the most effective ways to go about this is through a systematic management program that addresses loss potentials - an effective loss control program.

In most cases, increased awareness of the importance of loss control results in a great deal of activity in the field, literature on the subject, people becoming involved, companies establishing formal programs and interest in getting the maximum possible return on every loss control dollar. In the process of formulating programs over the years, however, certain recurrent loss control program weaknesses have appeared. The following details experiences with actual loss control programs and identifies the most common and damaging problems that have a negative impact on program effectiveness.

Lack of


Com mitment

This may be seen in an almost infinite variety of symptoms, all of which spell trouble for effective loss control. If managers seldom notice hazards or comment on safety during their plant walk-throughs, if safety is brought up infrequently during discussions with supervisors, if management's priorities do not clearly and consistently include safety, if a written policy and the assignment of responsibility represent the sum total of top management's investment in safety - all signal a lack of real management commitment. Other problems underlying the lack of commitment include a feeling that safety is not really an integral part of company operations; that loss control is an extra, separate concern; that safety will come with good intentions and "being careful"; and that being genuinely interested means the same thing as commitment. Additionally, some companies erroneously believe that an investment of time, money and effort is justified only in economically good times or because of excessive outside pressure. A management that is committed to loss control has rid itself of these erroneous attitudes.

Failure to Assign Responsibilities

When this situation prevails, the various elements of a loss control program falter and stagnate. This stagnation manifests itself in accident investigations that are done poorly, late or not at all; safety meetings conducted in a haphazard or inconsistent manner; safety rules that, if they exist at all, are inconsistently enforced; and physical hazards inspections that may be spotty, superficial or nonexistent. In short, very little is accomplished, and the effort that is expended is frequently ineffective.

Management must take full responsibility for this type of situation. A top management that understands the direct connection between loss control program results and overall bottom line results assigns responsibility for loss control performance to its line management. To back up that assignment of responsibility, loss control achievement is one of the items upon which a manager's overall performance should be evaluated.

Higher level managers, superintendents and department heads are held accountable for the achievement of results, such as a reduction in incidence rates or dollar losses. At lower levels, supervisors share in accountability for results but are responsible mostly for the performance of certain activities, such as hazards recognition surveys or safety training.

When successful executives wish to achieve a certain production or cost reduction level, they set objectives, assign responsibilities, establish accountabilities and carefully monitor the effort. In effect, they say: "This is what needs to be done, this is who is going to do it, this is when it will be done and this is how we'll measure performance. Success is expected; failure will not be tolerated."

This is far more than mere management support, it is the essence of management

itself. A loss control program that hasn't had program responsibilities and accountabilities defined and assigned in this way does not have the kind of management support that is most effective.

Failure to Establish Program Objectives

Loss control programs sometimes look very good on paper, but still fail to achieve significant results. All the standard program elements are there, a significant expenditure of time and money is being made and yet somehow the programs fall short. Frequently, this is the result of failing to establish program objectives, and failing to measure performance against those pre-established targets. Management should establish objectives both for the overall program and for specific activities. The former provide overall program direction, while the latter represent the means by which the ultimate objective may be reached.

An example of failure to establish specific objectives would be the creation of a safety committee without any clear idea of what that committee is supposed to accomplish. In the absence of definite objectives, the committee's impact on the loss control program would be minimal. Another example would be the completion of extensive and thorough hazards recognition surveys at all locations in the absence of any evidence that significant losses occur as a result of unrecognized physical hazards. Program objectives should be based on careful measurement and analysis of loss experience to show where investments of time and money in loss control activities will provide the greatest return.

Establishment of program goals and objectives leads to the organization of activities directed toward achievement of results. Subsequent measurement of results against objectives indicates whether or not the correct activities were performed, and if they were performed properly. There is really no subshtute for an individual manager knowing specifically the results that are expected and knowing that failure to achieve these objectives will reflect adversely on that allimportant performance rating.

Misunderstanding the Safety Staff


A clear indication that management does not understand the proper relationship between safety personnel and line management is when loss control is considered solely the responsibility of the safety staff and virtually no one else in the organization invests any significant energy in the effort. In these cases, failures in the safety program are blamed all too easily on the safety staff

Effective loss control includes activities involving every segment of an organization. Hiring practices, orientation and training, production engineering, benefits administration, labor/management relations, purchasing - all functions must be involved. Once this fact is appreciated, the idea of a loss control program carried on exclusively by a staff function becomes unthinkable. It is line managers who are responsible for the cost-effective use of materials, equipment and people. Minimizing the possibilities for accidents and injuries is as much a part of that responsibility as production planning or quality control. Safety is, and must be, a line management responsibility.

The implementation of a loss control program at the plant level is the responsibility of the plant manager and all other line managers down the chain of command. The function of the safety staff, whether at corporate, division or plant level - as with any other staff position is to guide, assist, train and consult with line managers in achieving the organization's goals.

Lack of Supervisory involvement

When supervisors are not actively utilized, very few loss control program activities are carried out effectively. Accident investigations, inspections, employee safety training, safety meetings - all should involve supervisors' active participation in order to be effective.

When managers fail to adequately utilize supervisors in the loss control program, they fail to take advantage of the fact that the supervisor has the most influence and control over the employees' attitudes and work habits. The supervisor is also the one most familiar with the day-to-day operations, conditions and work environment in his or her department and is, therefore, in the best position to prevent accidents.

This is where the real challenge of loss control program management lies - top management involving all supervisors in such a way that their participation stems from their own commitment to the program and to its goals and objectives. Securing this kind of supervisory involvement, supported by adequate training, almost assures program success. Without it, even the most elaborately designed activities may not prove effective.

Failure to invoive All Empfoyees

When all employees are not thoroughly involved, the best that can be expected is apathy - no suggestions in suggestion boxes, failure to warn one another of hazards or a general feeling that the safety program is ineffective. In some situations, this apathy can degenerate rapidly into outright hostility exhibited in resistance to suggested changes, complaints to the Occupational Safety and Health Administration, and increased labor grievances. This results from management failing to involve all employees beyond requiring obedience to established safety rules and admonishing them to "Be careful."

The company that does not solicit more active participation by the employees in the safety program is leaving a tremendous safety resource untapped. Employees often are the first to recognize hazards on their jobs or in their departments and frequently have excellent ideas on how to correct an unsafe condition or change a job procedure to reduce the probability of an accident.

Capitalizing on this resource, however, requires the same kind of involvement and commitment already mentioned. Workers who have had a program imposed on them from upper management may not be committed and involved in that program. Additionally, employees who are expected to obey rules and regulations that they don't understand may actually become hostile. Employees who perceive the safety program as just one more complication in their lives are not likely even to listen to the admonition to "Be careful."

Non-Existent or inadequate


Lack of training in the various loss control program elements can show up at any level in the organizahon. At the top management level, if the need and justification for an investment of time and dollars in loss control is not well understood, then the all-important management commitment will be lacking and the entire program will suffer.

Line managers who are not well versed in basic loss control theory and practice may institute program activities not well matched to existing needs, or implement activihes ineffectively. Likewise, supervisors who have not been trained in the basic elements of on-thejob safety, or who are not skilled in communicating that information, will obviously be unable to assume their key role in the program. At the most basic level, employees without proper training will continue to be unaware of physical hazards, will continue to use hazardous work practices and will simply not know how to "Be careful."

The question of where to begin with loss control program training is frequently asked. People who will be asked to assume loss control program management or coordinahon responsibilities in addition to their regular jobs are priority candidates for t raining . Throwing the student into deep water may have been effective for the old-time swimming teacher, but in business situations it's almost always a waste of time, money and the person's talents. Adequate training is a far more cost-effective alternative.

Supervisory training is especially important to a successful loss control program, so supervisors are also high on the priority list for safety training. If management's concern for safety is to be communicated to employees, it will be done largely through the supervisors. In order for employees to learn and understand both the importance of safe work practices and the significance of safety rules, they must have the assistance of their supervisors. A successful loss control program places demands on just about everyone in the organization from top to bottom. To assume that people will be able to deliver the expected performance simply with pre-existing knowledge and skills is wishful thinking at best; in reality, they will need training.

Inconsistent Enforcement of

Safety Rules

If enforcement of safety rules differs from supervisor to supervisor and from department to department, or if hourly employees are expected to obey the rules but management is not, or if the reasons for the rules are not known by those expected to obey them, the result is that people will not take the program seriously, and support for the program will deteriorate. Safety rules that are not consistently enforced serve only to undermine and weaken employees' perception of management commitment.

How do you ach,ieve commitment to the observance of safety rules and consistent enforcement? A partial answer lies in the method for establishing safety rules in the first place. Employees who are actively involved in analyzing their department's need for safety rules and who actually help to write those rules are far less likely to become rule violators. In addition, employees who are involved in establishing disciplinary policies and procedures will help see to it that enforcement is consistent. For programs in which rules are already established, employees can be involved by soliciting their input for periodic review and updating of safety rules.

One more thought on safety rules - constant and repeated violations of safety rules are symptoms of a weak program in which management commitment, safety communications and safety training are nonexistent or seriously deficient.

Poor Follow-Up

With no follow-up program for injuries, some injured workers will take advantage of the system, and even minor injuries will tend to become lost-time cases. The result is higher medical and indemnity costs and an adverse effect on quality and productivity due to absenteeism and turnover. Basic first aid cases may become hospitalized or sent home without medical justification - or legitimate lost-time cases stretched from days into weeks, again without medical justification.

The answer to avoiding abuse lies in a program designed to minimize the time lost due to injury, and thus get the injured worker productive again as quickly as is medically and practically possible. Such a program also shows management's concern for the welfare of the injured worker and may include on-site first aid personnel and facilities, special arrangements with nearby clinics or hospitals, a formal system of regular follow-up calls to both the injured worker and attending physician, and, in some cases, rehabilitation services.

Lack of a Total System

It is not unusual to encounter loss control program efforts aimed at only a few of the key factors. The justification for this approach is that time and/or money is not available to do more. Actually, such halfway measures may ultimately waste more time and money than they save. An incomplete system simply cannot be expected to provide as much consistency and costeffectiveness as one that is an integrated whole.

A loss control program is really a total system of elements, operating within a larger system, the overall organization. Systems theory tells us that all the subsystems depend on one another, just as the whole depends on the parts. Failure in any one subsystem can cause both problems in other subsystems and problems for the whole. It is management's responsibility to see to it that all elements pull together to achieve both loss control program objectives and the objectives of the overall organization.

A loss control program can be built up, step by step, one element at a time like a bridge. But like the bridge under construction, the loss control program in the making must be carefully designed, with special attention to a first-things-first approach, and provided with extra support until such time as the last subsystem is in place and the program is a functional whole. Actually, because of the human element, this is a never-ending process in loss control program management.

As the foregoing discussions indicate, truly effective loss control does not come easily. As with any other endeavor an organization chooses to undertake, loss control results will come only with intelligent, aggressive, persistent program management. The road to real results is strewn with good intentions, wishful thinking and beautifully designed projects that simply didn't produce results.
COPYRIGHT 1993 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Risk Management
Date:Jun 1, 1993
Previous Article:Workplace violence.
Next Article:High-rise risk management.

Related Articles
Controlling losses the Burger King way.
RIMS members meet with Argonaut.
Software uncovers white-collar crime.
An Herbal Remedy That Failed to Meet Its Claims.
ManagedComp succumbs to tough times. (Up Front).
Corrosion costs U.S. transmission pipelines as much as $8.6 billion/year. (NACE Federal Study).
The Fire Brigades Union - Leaked Letter Warns "Unacceptable" Move Towards Regional Emergency Fire Controls Has "Significant Flaws".
Critical security flaw warnings issued by Microsoft.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters