4. Questions
• If you have questions
during the presentation,
please submit them using
the “Questions” feature
• Questions will be
answered at the end of the
webinar
5. 5
Agenda
• Can you define “Safety Culture”?
• Changes in Workers Compensation
• Safety Program in 7 Steps
• Safety Incentive Programs
7. Safety Culture
Wikipedia
Safety culture is a term used to describe the
way in which safety is managed in the
workplace, and often reflects "the attitudes,
beliefs, perceptions and values that
employees share in relation to safety" (Cox
and Cox, 1991).
8. Safety Culture
Safety Culture is…”the product of the individual
and group values, attitudes, competencies
and patterns of behavior that determine the
commitment to, and the style and proficiency
of, an organization's health and safety
programs.”
Safety Culture: A Review of the Literature (UK)
9. Safety Culture
• EHS Today-America’s Safest Companies“Our culture is to expect
100% engagement from all
associates in our safety
programs, which includes not
only participation but also
leadership.”
“Our culture of safety
innovation and continual
improvement has fostered
countless, positive safety
changes with profound impact
on our safety performance.”
“How many companies
can say that their CEO
has reviewed every
single recordable injury
AND serious near miss?
We can!”
“Our 76% improvement in
recordable injuries and external
recognitions are a result of our
strong safety culture, and they
demonstrate how ingrained safety
is in why and how we do
business.”
“Safety, or EHS, is
who we are…It’s a
core value that is
integrated into all
business processes
and functions.”
13. • Rates are pre-determined
• Common set of class codes
• Ensure accuracy with job descriptions• 6 Point Dealer Group
• 100 Employees at each location
• Annual Payroll of $5 million per dealership
600 Total Employees with $30 million in payroll
• 8330 (Tech) $9,000,000 = $90,000 x $5.00 = $450,000
$100
• 8748 (Sales) $9,000,000 = $90,000 x $2.00 = $180,000
$100
• 8810 (Admin) $12,000,000 = $120,000 x $1.00 = $120,000
$100
Total manual premium: $750,000
8380
8748
8810 9410
7380
Safety Culture
Class
code
Employee Type % of
Payroll $ Payroll
Premium
$100 payroll
8380 Technicians/
Detailers/ Drivers 30% $9 mil $5
8748 Sales 30% $9 mil $2
8810 Administrative 40% $12 mil $1
Payroll For Aacme Motors
14. Safety Culture
2004 2005 2006 2008
2005 2006 2007 2009
2006 2007 2008 2010
2007 2008 2009 2011
2008 2009 2010 2012
“E-mod”
“X-mod”
“Mod Factor”
“Experience Rating”
“Merit Rating”
• Calculated by the National Council on Compensation Insurance
(NCCI) or a state agency
• 3 consecutive years are used to calculate a rating
• Excludes current and prior year
• Frequency of claims is weighted higher than severity
• Used to compare businesses in the same industry
• Industry Average is set to “1”
$750,000 Manual Premium
Aacme Motors ABC Motors
Experience Mod .80 (-20%) 1.2 (+20%)
$600,0000 $900,000
A difference of $300,000!
15. Ratings are based on business characteristics the insurance company
thinks can make a difference in reducing future losses.
• Regular safety committee meetings
• Positive incentive programs
• Written safety programs
• Hazard inspections
• Ongoing safety training
• Timely reporting
• Claims Management
Safety Culture
Aacme Motors ABC Motors
Tier Rating 1.17 (preferred plus) 1.67 (residual)
Experience Mod -20% (.80 mod) +20% (1.2 mod)
Deductible -3.9% ($500 ded.) 0%
Provider Discount -2.5% 0%
Association Disc. -4% 0%
Cost Containment Cert. -5% 0%
Schedule Rating -10% +10%
Premium Disc. -8.6% -8.6%
$390,795 $1,189,804
$750,000 Manual Premium
A Difference of: $799,008!!!
16. Safety Culture
1. Senior Management Leadership
2. Safety Coordinator
3. Employee Involvement
– Recognition
– Communication
4. Timely Notification of Claims
5. Return to Work Practices (Medical Treatment)
6. Written Programs & Processes
– New Hire Orientation
– Safe Work Practices
– Safety and Health Policy
7. Recordkeeping & Analysis
21. Safety Culture
Injury
Report
Injury
• Employee reaches
maximum improvement
and returns to work in
original position
• Employee has not reached
maximum improvement
and returns to work in
transitional work
assignment
• Employee reaches
maximum medical
improvement but has
received disability rating
and is assigned to
modified job or different
position
Send for
Medical
Treatment
24. Safety Culture
Incentive Programs
• Open lines of communication
• Give ability to make suggestions
• Allow for group discussions
• Praise
– Positive GossipThank the employee by nameState what the employee did to earn praiseExplain how you felt about the behaviorState how the behavior added value to the companyThank the person again by name
25. 1.Targeted behaviors
• Positive and tangible
2.Program Rules
• Must be clear to all employees
3.The Reward
• Appropriate for the effort
• Meaningful and memorable
Safety Culture
Before an incentive program is considered
Basic needs must be met
The targeted behaviors of an incentive program
should be positive and tangible
• Focus on “what to do”
• Give measurable actions
26. Safety Culture
Safety Bingo
Best Safety Suggestion
Good Housekeeping
Accident Free Days
Safety Bucks
There is no single definition of “a safety culture”. The term first arose after the investigation of the Chernobyl nuclear disaster in 1986 which led to safety culture being defined as “an organizational atmosphere where safety and health is understood to be, and is accepted as, the number one priority”.
COX, S. & COX, T. (1991) The structure of employee attitudes to safety - a European example Work and Stress, 5, 93 - 106
EHS Today is a magazine dedicated to the management of risk in the workplace and environment. Every year they award companies that provide a safe working environment for thousands of employees and serve as a point of reference for companies hoping to achieve world-class safety status.
The National Council on Compensation Insurance (NCCI) develops your experience MOD annually andinsurance carriers use it as a tool to compare your claims experience to that of your industry. The NCCI annually produces a MOD Worksheet that outlines the calculation and the data that was used to develop your MOD factor. As you can see by the map the NCCI is not designated as the licensed rating and statistical organization for every state in the US. Currently 37 states rely on the NCCI. Others utilize an independent state bureau or have a monopolistic structure.
In layman’s terms, your MOD is simply the amount of your actual work comp losses divided by yourexpected losses based on your industry. For the past twenty years, the first $5,000 of a claim has beenconsidered the “primary” portion and any amount above $5,000 has been considered the “excess”portion of the claim. This magic $5,000 line is known as the “split point” of claim. In the formula theNCCI uses to calculate your MOD factor, there is a big difference between the “primary” and “excess”parts of a claim. The formula counts the entire $5,000 “primary” portion of a claim against your MODbut only counts a small portion (typically 5% - 15%) of the “excess” portion of the claim against yourMOD. Using a $10,000 lost time claim for a company whose MOD formula only uses 10% of the “excess”portion of the claim, just $5,500 of the $10,000 claim would count against your MOD calculation i.e. thefirst $5,000 “primary” portion is fully counted but only 10% of the rest of the claim ($5,000 x 10% =$500) is used in the MOD calculation.The major change that the NCCI is proposing is they will be raising the “split point” of claims from$5,000 to $15,000 over the course of three years. Starting 1/1/2013 the “split point” will be increasedfrom $5,000 to $10,000, and then will be increased to $13,500 in the second year and finally to $15,000(plus two years of inflation adjustment) in the third year. Looking back at the above example, starting in2013, that $10,000 lost time claim will have the full $10,000 “primary” portion of the claim fully countagainst your MOD factor calculation.employers “with bad experience are going to see a higher apportionment of debits” added to their pricing, while those with a good loss history will see more creditsSo it really underscores the need for employers to invest in loss control, invest in safety, invest in their people and have a very strong return-to-work program
There are many positive incentive games out there, unfortunately many of these games focus on the wrong objectives. Take the traditional rules of safety bingo; a number is drawn daily, and a prize is given for the employee that gets “Bingo”. The prize is increased with each subsequent game, so there is more incentive to not have an accident. The game is cancelled and the prize returned to the lowest level whenever an accident occurs. I hope you’re seeing the pitfall here, if you do a web search on “safety bingo” you’ll find hundreds of pages describing the multitude of problems that can take place as a result of this game. Unfortunately the game forces a lot of peer pressure among the employees to not report accidents and hide injuries. Some game rules talk about punishing employees for trying to hide injuries to prevent this sort of thing from happening. None of this sounds very “positive” to me and gives mixed message to the employees. Why not change the rules a little and take the emphasis off of failure and accident reporting? For instance, why not only draw a number if one or more of the positive behaviors from the last slide occurs? So if a safety suggestion is made, or a hazard gets fixed a number is drawn, otherwise, no number for the day. A little change in the rules, changes the focus of the game.
Well that’s all folks. Now time for some Q & A. Eliana, do we have any questions I can answer?