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Downsizing Breeds Increased Claims

Sunday, January 20, 2002 | 417 | 0 | min read

If your company is downsizing because of a cooling economy, it wouldn't be unusual for you to see a temporary increase in workers' compensation (WC) claims. There are different reasons for increasing WC claims during downsizing. We'll look at some of the reasons claims increase, and what you can do about it.

Two things happen when workers fear they might lose their jobs according to a recent study published in the Journal of Occupational Health Psychology: 1) They tend to exhibit a lower level of knowledge about appropriate safety behaviors; 2) They demonstrate less motivation to comply with organizational safety policies. (See ' Workplace safety tied to job security," published by the American Psychological Association).

The study by Tahira Probst, PhD, an industrial/organizational psychologist at Washington State University Vancouver, assesses the effect that job insecurity has on variables that are known to relate to workplace accidents and injuries. The conclusions are twofold: layoffs send the message that safety is being sacrificed for production; and workers' minds aren't on safety or their jobs, they are distracted about an insecure future. "Job insecurity can have potentially dangerous implications for employee safety attitudes and behaviors," according to the report.

In general, the downsizing company needs to spend more time on training and safety awareness with motivational activities. Senior management must be educated on the impact layoffs might have on worker safety before layoffs begin.

Proper downsize planning will include the following safety improvement steps:

* Safety reward programs should be maintained or even expanded to increase the incentive for safe behavior.
* The number of safety "messages" employees receive should be increased, such as "Safety First" reminders as paycheck inserts.
* Remaining employees typically inherit new job duties - make sure that safety training accompanies job changes.
* Do not disregard safety monitoring, ensuring that safety compliance, maintaining or increasing safety knowledge, and keeping workers "safety-motivated" continues.
* Continuously evaluate whether the drain on institutional knowledge is affecting safety and take steps to ensure that the remaining work force inherits that knowledge.

The next article in this series will examine dishonest claim reporting.

This article sponsored by HealthCareProducers.com, where one stop health and workers' compensation insurance is just a click away.

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