Safety Practices, Firm Culture, and Workplace Injuries

Safety Practices, Firm Culture, and Workplace Injuries

Safety Practices, Firm Culture, and Workplace Injuries

Safety Practices, Firm Culture, and Workplace Injuries

Synopsis

Workers' Compensation insurance, which covers all medical expenses and part of the lost wages associated with injuries, cost employers $63.9 billion in 2001 (National Academy of Social Insurance, 2004). The indirect costs of accidents lost wages, damage to equipment, training and rehabilitation expenses are several times this amount. On the job injury costs are an important component of the firm's operating expenses. Human resource management can change workers' incentives to take more care on the job (accident prevention), improve workers' incentives to return to work following an accident (loss reduction), and improve workplace efficiency by appropriately involving workers in the firm's decision making.

Excerpt

More U.S. workers die each year on the job than were killed in the U.S. military cumulatively from 1998 through November 2004, even after including self-inflicted and accidental military deaths (DIOR 2005). In 2001, there were 8,786 job-related fatal injuries (5,900 not counting the fatalities caused by the terrorist attacks of September 11), or about 3.7 fatal injuries per 100,000 workers. Workers made 2.1 million trips to the emergency room for injuries sustained from accidents at work (Centers for Disease Control and Prevention 2004). Workers’ compensation insurance, which covers all medical expenses and part of lost wages associated with injuries, cost employers $63.9 billion in 2001 (Williams, Reno, and Burton 2003). The indirect costs of accidents—lost wages, damage to equipment, and training and rehabilitation expenses—were several times this amount.

Human resource management (HRM) is usually viewed as an auxiliary function in a firm, contributing nothing to that firm’s output—a cost tolerated because payroll, benefits, and certain types of human resource activity must be organized before the real job of production can be undertaken. But HRM practices can affect accident costs in three ways. Two of the three pertain to the real or intrinsic risk in the workplace. “Real” risk is the level of physical danger of accidental injury or occupational disease that comes from workers producing output. As men interact with machines, both men and machines cause accidents. Accidents can be reduced by modifying either part of the interaction: 1) by increasing workers’ incentives to be careful, or 2) by modifying the workplace environment to employ processes, procedures, equipment, and ergonomics that reduce on-the-job injuries. In addition, HRM policy can reduce accident costs by lessening workers’ incentives to file false or inflated accident claims for any given level of real risk.

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