Chapter 14: Risk Management and Worker Protection
Chapter 14
Risk Management and Worker Protection
Learning Objectives
After students have read this chapter, they should be able to:
• Understand risk management and identify its components.
• Discuss three legal areas affecting safety and health.
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
Chapter 14: Risk Management and Worker Protection
training and communication; participation on 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, smoking at work, and
Chapter Outline
HR Headline: Watch Out for Disgruntled Saboteurs
Human resource professionals should be aware that employees sometimes feel it
necessary to retaliate against layoffs, terminations, and other cost-minimizing measures
implemented by companies to improve the bottom line. Sabotage and other retaliatory
behaviors may be used as ex-employees try to find ways to harm their employers in
response to unpopular HR decisions.
HR managers can be proactive in developing policies that adequately prepare companies
for possible negative consequences of terminations and layoffs. Implementing a
professional and considerate approach for handling these sensitive issues, and then
training managers to follow proper procedures, may deter employee revenge.
Chapter 14: Risk Management and Worker Protection
Even though risk management often is a distinct business function, there are specific and
separate risks associated with the supervision of employees. In the United States and other
developed nations, HR departments are included in the prevention, minimization, and
elimination of workplace risks.
A prominent part of HR-based risk management in most organizations involves health,
safety, and security (Figure 14-1). 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 somewhat more nebulous term is health, which refers to
a general state of physical, mental, and emotional well-being. A healthy person is free from
illness, injury, or mental and emotional problems that impair normal human activity.
Health management practices in organizations strive to maintain that overall well-being.
I. Current State of Health, Safety, and Security
Accidents can be costly for organization because there are direct, indirect, and
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A. Snapshot of Health, Safety, and Security
Specific rates vary depending on the industry, type of job, and other factors. For
instance, illnesses and injuries in the private industry were down, but the agriculture,
forestry, and fishing and hunting industry and the accommodation and food services
B. Domestic Trends in Health, Safety, and Security
There are many trends in occupational health, safety, and security related to specific
demographic and occupational issues that are occurring in the United States. For
instance, many Hispanic workers work in low-wage jobs with higher risk factors. In
addition, poor English communication skills, lack of training, and other factors
contribute to this situation, which runs counter to the trends for other groups.
C. Global Trends in Health, Safety, and Security
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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
International Emergency Health Services
With more and more expatriates working internationally, especially in some less-
developed countries, significant health and safety issues exist. One consideration is
International Security and Terrorism
As more U.S. firms operate internationally, the threat of terrorist actions against
those firms and their employees increases. The extent to which employees are likely
to experience security problems and violence depends on the country. The employer
must regularly check the security conditions in countries where expatriates are
traveling and working.
Kidnapping
Not all violence occurs at work. Kidnapping, murder, home invasion, robberies, and
carjackings happen relatively frequently in some cities. To counter such threats,
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II. Legal Requirements for Safety and Health
Employers must comply with a variety of federal and state laws when developing and
maintaining healthy, safe, and secure working environments. Three major legal concerns
are workers’ compensation legislation, the Americans with Disabilities Act, and child labor
laws.
A. Workers’ Compensation
Under workers’ compensation laws, employers contribute to an insurance fund to
compensate employees for injuries received while on the job. Premiums paid reflect the
accident rates of the employers, with employers that have higher incident rates being
Controlling Workers’ Compensation Costs
Workers’ compensation costs have become a major issue for many employers, and
can represent from 2% to 10% of payroll for most employers. One key to reducing
these expenses has been return-to-work plans. These plans monitor employees who
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B. Americans with Disabilities Act and Safety Issues
Employers sometimes try to return injured workers to light-duty work in order 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 undercut what are really essential job functions.
C. Child Labor Laws
Safety concerns have resulted in restrictions affecting younger workers, especially those
under the age of 18. Child labor laws, found in section XII of the Fair Labor Standards
Act (FLSA), set the minimum age for most employment at 16 years. Individuals who
are 14 or 15 years old may work no more than three hours a day and a total of 18 hours
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• Understand the laws associated with employing minors
• Take the proper steps needed to reduce workplace safety concerns
• Properly manage and train younger employees so that workplace hazards are
recognized and prevented
• Encourage feedback from minors about their safety concerns
III. Occupational Safety and Health Act
The Occupational Safety and Health Act of 1970 was passed to ensure that the health and
safety of individuals employed in organizations 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.
A. OSHA Enforcement Standards
To implement OSHA regulations, specific standards were established to regulate
equipment and working environments. National standards developed by engineering
and quality control groups are often used. OSHA rules and standards are frequently
complicated and technical. Two provisions have been recognized as key to employers’
Hazard Communication
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OSHA has established process safety management (PSM) standards that focus on
hazardous chemicals. As part of PSM, hazard communication standards require
manufacturers, importers, distributors, and users of hazardous chemicals to evaluate,
The Internet has made it much quicker and easier for companies to meet OSHA’s
hazard communication requirements because:
• Employers can access safety information produced by vendors and suppliers on
hazardous materials and chemicals
Bloodborne Pathogens
OSHA has issued a standard regarding exposure to the hepatitis B virus (HBV), the
Personal Protective Equipment
One goal of OSHA has been to develop standards for personal protective equipment
Pandemic Guidelines
In addition to regulations, OSHA issues guidelines that can help to protect people at
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safety equipment.
B. Ergonomics and OSHA
Ergonomics is the study and design of the work environment to address physical
demands placed on individuals. In a work setting, ergonomic studies look at such
factors as fatigue, lighting, tools, equipment layout, and placement of controls.
OSHA has approached ergonomics concerns by adopting voluntary guidelines for
specific problem industries and jobs, identifying industries with serious ergonomic
problems, and giving employers tools for identifying and controlling ergonomics
hazards. Among the industries receiving guidelines are nursing homes, poultry
processors, and retail grocery stores.
Successful Ergonomics Programs
A successful ergonomics program has several components. First, management must
C. Work Assignments and OSHA
The rights of employees regarding work assignments have been addressed as part of
OSHA regulations. Two prominent areas where work assignments and concerns about
safety and health meet are reproductive health and unsafe work.
Work Assignments and Reproductive Health
Assigning employees to work in areas where their ability to have children may be
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On the basis of standards specified in the Civil Rights Act and Pregnancy
Discrimination Act, employers should not prevent women (or men) from working in
Refusing Unsafe Work
Both union and nonunion workers have refused to work when they considered the
work unsafe. The conditions for refusing work because of safety concerns include
the following:
D. 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. OSHA guidelines state that facilities whose accident
records are below the national average rarely need inspecting.
Reporting Injuries and Illnesses
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 actions
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E. 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.,
Dealing with an Inspection
When an OSHA compliance officer arrives, managers should ask to see the
inspector’s credentials. Next, the HR representative for the employer should insist on
Citations and Violations
Although OSHA inspectors can issue citations for violations of the provisions of the
act, whether or not a citation is issued depends on the severity and extent of the
problems, and on the employer’s knowledge of them. In addition, depending on the
nature and number of violations, monetary penalties can be assessed against
employers.
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violation citation.
• Other than serious—violations that could impact employees’ health or safety
but probably would not cause death or serious harm are called “other than
serious.”
F. 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 employers pay little attention to OSHA enforcement efforts for this reason.
Labor unions and others have criticized OSHA and Congress for not providing enough
inspectors.
IV. Safety Management
Well-designed and effectively-managed safety programs can result in reduced accidents
and associated costs. Further, a variety of safety concerns often decline as a result of
management efforts that emphasize a safe work environment. Both the HR unit and
operating managers must be involved in coordinating health, safety, and security efforts
(Figure 14-6).
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A. Organizational Commitment and a Safety Culture
At the heart of safety management is an organizational commitment to a comprehensive
safety effort that should be coordinated at the top level of management and include all
members of the organization. It should also be reflected in managerial actions.
B. Safety Policies, Discipline, and Recordkeeping
Designing safety policies and rules and disciplining violators are important components
of safety efforts. Frequently reinforcing the need for safe behavior and frequently
supplying feedback on positive safety practices are also effective ways of improving
worker safety.
C. Safety Training and Communication
Safety training can be done in various ways to effectively reduce accidents. Regular
sessions with supervisors, managers, and employees are often coordinated by HR staff
members. Communication of safety procedures, reasons why accidents occurred, and
D. Participation on 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 meets at regularly scheduled times, has specific responsibilities for conducting
safety reviews, and makes recommendations for changes necessary to avoid future
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E. Inspection, Investigation, and Evaluation
It is not necessary to wait for an OSHA inspector to check the work area for safety
hazards. Inspections may be done by a safety committee or by a company safety
coordinator regularly. Problem areas should be addressed immediately in order to keep
work productivity at the highest possible levels.
F. Approaches for Effective Safety Management
Three approaches are typically used by employers in managing safety. Figure 14-8
shows some of the organizational, engineering, and individual approaches and their
components.
Organizational Approach
Safety and Engineering
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Employers can prevent some accidents by designing machines, equipment, and work
areas so that workers who perform potentially dangerous jobs cannot injure
Individual Approach
Engineers approach safety from the perspective of redesigning the machinery or the
work area. Industrial psychologists and human factors experts see safety differently.
They address the proper match of individuals to jobs and emphasize employee
training in safety methods, fatigue reduction, and health awareness.
G. Measuring Safety Efforts
Organizations should monitor and evaluate their safety efforts. Just as organizational
accounting records are audited, a firm’s safety efforts should be audited periodically as
well. Accident and injury statistics should be compared with previous accident patterns
to identify any significant changes.
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V. Employee Health
Employee health problems are varied—and somewhat inevitable. They can range from
minor illnesses such as colds to serious illnesses related to the jobs performed. Employers
face a variety of workplace health issues. Some of the concerns associated with employee
health are cumulative trauma injuries, exposure to hazardous chemicals substance abuse,
emotional/mental health, older workers, smoking, and obesity.
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
A company should also consider relying on employee assistance programs (EAPs) for
support and counseling related to substance abuse, as well as craft a zero tolerance
policies that cover employees’ use of alcohol and drugs. Unfortunately, many
employers turn a blind eye to these issues because of reasons such as the threat of bad
publicity, increase costs, and fears concerning discrimination lawsuits. This is why HR
professionals must get involved in substance abuse cases by:
• Preparing supervisory personnel to implement a progressive penalty scale that
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operators. The U.S. Department of Health and Human Services suggests that companies
follow some guidelines when managing drug testing in the workplace:
• Always
o Be aware of current laws and talk to union leaders and appropriate
Types of Drug Tests
There are several different types of tests for drug use—urinalysis, radioimmunoassay
of hair, surface swiping, and fitness-for-duty testing. The innovative fitness-for-duty