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Chapter 9
Risk Management, Worker Protection, and
Employee Relations
Chapter Overview
The focus of HR management on risk management and worker protection has grown
significantly in the past several years. Previously, most HR efforts focused on work
environments that are safe, healthy, and secure. Risk Management includes workplace safety and
health, employee health/wellness promotion, workplace and worker security, and disaster
preparation and recovery planning. This chapter starts with a discussion about the current state of
health, safety, and security including trends and global health/safety/security issues such as
international emergency health services, international security and terrorism, and kidnapping.
Then the legal requirements set forth in laws that relate to safety and health are detailed. An
overview is given of state workers’ compensation laws, the Americans with Disabilities Act, and
child labor laws. Extensive coverage is given to the Occupational Safety and Health Act of 1970
with attention given to enforcement standards, recordkeeping requirements, inspections, and a
critique of OSHA.
Effective HR management undertakes programs of safety management to help avoid violations
as well as designing a safer working environment. Safety topics covered are organizational
commitment to safety; safety policies, discipline, and recordkeeping; safety training and
communication; effective safety committees; safety inspection, investigation, and evaluation;
approaches for effective safety management; and measuring safety efforts.
Next, the chapter discusses several employee health issues, including substance abuse,
emotional/mental health concerns, health and older employees, and health promotion programs,
wellness programs, and employee assistance programs (EAPs). The chapter then covers security
concerns at work. Workplace violence has become an increasing concern and is one reason that
security has become much more important for organizations than in the past. Dealing with
workplace violence is covered. Other topics related to security management include security
audits, controlling access, employee screening and selection, and security personnel. Next, there
is a section on disaster preparation and recovery planning.
The chapter then presents three related and important issues in the management of human
resources:
Employee rights
HR policies
Employee discipline
The chapter presents a review of employee rights and responsibilities. Employees’ statutory and
contractual rights are presented along with a discussion on implied contracts.
The chapter next reviews rights affecting the employment relationship with attention given to
employment-at-will, just cause, and due process. The common-law doctrine of employment-at-
will (EAW) states that employers have the right to hire, fire, demote, or promote whomever they
choose, unless there is a law or contract to the contrary.
It is becoming increasingly important for organizations to base discipline and discharge on just
cause and to guarantee due process to their employees.
The use of alternative dispute resolution (ADR) methods such as arbitration, peer review panels,
and ombuds has grown because of the dissatisfaction with the expenses and delays that are
common in the court system when lawsuits are filed. Each of these methods is described. Then
the chapter discusses several individual employee rights issues such as privacy rights related to
employee records, employees’ free speech rights, technology and employee rights, and employee
rights and personal behavior issues. Next, balancing employer security and employee rights are
examined. The issues of workplace monitoring, employer investigations, and substance abuse
and drug testing are discussed.
HR policies, procedures, and rules are described. Policies are general guidelines that regulate
organizational actions while rules are more specific, regulating and restricting the behavior of
individuals. Procedures are customary methods of handling activities. How these policies,
procedures and rules are communicated to employees is crucial.
The chapter ends with a discussion on employee discipline. Discipline is explained as being a
form of training to enforce organizational rules. Positive discipline and progressive discipline
approaches are described. The final disciplinary step, discharge, is also examined.
Chapter Outline
I. Risk Management, Health, Safety, and Security
Organizations can take steps to anticipate a multitude of problems occurring in the normal
functioning of business. Risk management involves this responsibility to protect both
A major part of HR-based risk management in most organizations involves health, safety, and
security. The terms health, safety, and security are closely related and can often be considered
together when policies are created because they affect each other in practice. The broader and
Typically, safety refers to a condition in which the physical well-being of people is protected.
The main purpose of effective safety programs in organizations is to prevent work-related
II. Current State of Health, Safety, and Security
Accidents can be costly for firms, and illnesses can generate financial and operational setbacks.
A. Snapshot of Health, Safety, and Security
Specific accident and illness rates vary depending on the industry, type of job, and other
factors. Recently, rates of illnesses and injuries in the private industry have gone down, but in
B. Domestic Trends in Health, Safety, and Security
There are several trends in occupational health, safety, and security related to specific
demographic and occupational issues that are occurring in the United States. For instance,
deaths from accidents among Hispanic workers are on the rise. Many work in low-wage jobs
C. Global Trends in Health, Safety, and Security
Safety and health laws and regulations vary from country to country, ranging from virtually
nonexistent to more stringent than those in the United States. The importance placed on
III. Legal Requirements for Safety and Health
Employers must comply with a variety of federal and state laws when developing and
A. Workers’ Compensation
Under workers’ compensation laws, employers contribute to an insurance fund that
compensates employees for injuries received while on the job. Premiums paid are experience-
rated to reflect the accident rates of the employers, with employers that have higher incident
Workers’ compensation coverage has been expanded in many states to include emotional
impairment that may have resulted from physical injury, as well as job-related strain, stress,
anxiety, and pressure. Some cases of suicide have also been ruled to be job-related in some
Controlling Workers’ Compensation Costs
Workers’ compensation costs have become a major issue, and can represent from 2% to
10% of payroll for employers. Workers’ compensation fraud is an expensive problem.
The Family and Medical Leave Act (FMLA) affects workers’ compensation as well.
Because the FMLA allows eligible employees to take up to 12 weeks of leave for their
B. Americans with Disabilities Act and Safety Issues
Employers sometimes try to return injured workers to light-duty work to reduce workers’
compensation costs. However, under the Americans with Disabilities Act (ADA), when
making accommodations for injured employees through light-duty work, employers may
C. Child Labor Laws
Risk management includes dealing with safety concerns have resulted in restrictions affecting
In addition to complying with workers’ compensation, ADA, and child labor laws, most
employers must comply with the Occupational Safety and Health Act of 1970. This act has
IV. Occupational Safety and Health Act
The Occupational Safety and Health Act of 1970 was passed to ensure that the health and safety
of employees would be protected. Every employer that is engaged in commerce and has one or
more employees is covered by the act. Farmers having fewer than 10 employees are exempt.
The Occupational Safety and Health Act of 1970 established the Occupational Safety and Health
Administration, known as OSHA, to administer its provisions. By making employers and
A. OSHA Enforcement Standards
To implement OSHA regulations, specific standards were established to regulate equipment
and working environments. Two provisions have been recognized as key to employers’
responsibility to comply with OSHA:
General duty—the act requires that the employer has a general duty to provide safe and
Notification and posters—employers are required to inform their employees of safety
B. OSHA Recordkeeping Requirements
Employers are generally required to maintain a detailed annual record of the various types of
injuries, accidents, and fatalities for inspection by OSHA representatives and for submission
to the agency. Four types of injuries or illnesses are defined by the Occupational Safety and
Health Act. They are as follows:
Injury- or illness-related deaths—fatalities at workplaces or caused by work-related
Lost-time or disability injuries—job-related injuries or disabling occurrences that cause
Medical care injuries—injuries that require treatment by a physician but do not cause an
Minor injuries—injuries that require first aid treatment and do not cause an employee to
C. OSHA Inspections
The Occupational Safety and Health Act provides for on-the-spot inspections by OSHA
representatives, called compliance officers or inspectors. In Marshall v. Barlow’s, Inc., the
Dealing with an Inspection
When an OSHA compliance officer arrives, managers should ask to see the inspector’s
credentials. Next, the company HR representative or safety professional should insist on an
Citations and Violations
Although OSHA inspectors can issue citations for violations of the act, whether or not a
citation is issued depends on the severity and extent of the problems, and on the employer’s
D. Critique of OSHA
OSHA has been criticized on several fronts. Because the agency has so many worksites to
inspect, employers have only a relatively small chance of being inspected. Some suggest that
V. Safety Management
Well-designed and effectively managed safety programs can result in reduced accidents and
A. Organizational Commitment to Safety
At the heart of safety management is a commitment to a comprehensive safety effort that
B. Safety Policies, Discipline, and Recordkeeping
Designing safety policies and rules and disciplining violators are important components of
For policies about safety to be effective, good recordkeeping about accidents, causes, and
other details is necessary. Without records, an employer cannot track its safety performance or
C. Safety Training and Communication
Safety training can be conducted in various ways to effectively reduce accidents. Regular
sessions with supervisors, managers, and employees are often coordinated by HR staff
D. Effective Safety Committees
Employees frequently participate in safety planning through safety committees, often
composed of workers from a variety of levels and departments. A safety committee generally
E. Inspection, Investigation, and Evaluation
It is not necessary to wait for an OSHA inspector to check the work area for safety hazards.
Regular inspections may be done by a safety committee or by a company safety coordinator.
F. Approaches for Effective Safety Management
Three approaches are typically used by employers to manage safety. Figure 9-3 shows some
Organizational Approach
Companies can effectively manage safety by designing safer jobs and by creating policies
that encourage safety. Safety committees can be used to increase awareness of important
Engineering Approach
Employers can prevent some accidents by designing machines, equipment, and work areas
so that workers who perform potentially dangerous jobs cannot injure themselves and
Individual Approach
This approach addresses the proper match of individuals to jobs and emphasizes employee
G. Measuring Safety Efforts
Organizations should monitor and evaluate their safety efforts. Common metrics are workers’
VI. Employee Health
Employee health problems are varied—and somewhat inevitable. They can range from minor
A. Substance Abuse
Use of illicit substances or misuse of controlled substances, alcohol, or other drugs is called
substance abuse. Employers’ concerns about substance abuse stem from the ways it alters
Types of Drug Tests
There are several different types of tests to detect drug use. These tests can identify
Handling Substance Abuse Cases
The ADA affects how management can handle substance abuse cases. Currently, users of
illegal drugs are specifically excluded from the definition of disabled under the act.
To encourage employees to seek help for their substance abuse problems, a firm-choice
option is usually recommended and has been endorsed legally. A supervisor or a manager
B. Emotional/Mental Health
A variety of emotional/mental health issues arise at work that must be addressed by
employers. Specific events, such as death of a spouse, divorce, or medical problems, can
affect individuals who otherwise have been coping successfully with life pressures. Beyond
C. Health and Older Employees
The graying of the workforce has health and safety implications. All signs point to an
D. Health Promotion
Health promotion is a supportive approach of facilitating and encouraging healthy actions
Employee Assistance Programs
Organizations can respond to specific and difficult health issues with an employee-
assistance program (EAP), which provides counseling and other help to employees having
VII. Security Concerns at Work
Traditionally, when employers have addressed worker risk management, they have been
