Workers Compensation Issues and Risk Management

Compensation issues have been a burdensome concern of various businesses across different industries. However, through efficient and effective risk management, companies are able to find innovative solution to ensure that they maintain the edge in their fields of industry through finding a system that works for them in addressing such concerns (Beighley, 2007). Particularly, giant companies such as Target, Disney, and ServiceMaster have employed a strategic system that allowed them to address workers compensation issues while minimizing its negative impact on the over-all performance of the company while finding the opportunity to ensure that workers remain productive and dedicated in their work.

Target Corp. like any other retail store is burdened with issues of claims, particularly in the area of workers’ compensation claims. However, they were able to employ a well-organized system that works for them that has effectively managed claims for worker’s compensations. For one, Target ensures that 100 percent of all incidents are reported through its custom-designed electronic form that facilitates speedy reporting process. After which, a nurse in line, is available 24/7 to assist retail stores on how to administer treatment. The nurse could even provide care instructions through email or fax directly to the store. Through this system, it is easy to identify incidents that could be handled by the claims department and which cases should be turned over to Sedgwick Claims Management Services, their third-party administrator. But to also maintain speedy resolution that Target expects, Sedgwick only handles at most 125 claims. Another strategy that Target employs is the Return to Work Program. The goal of the program is to make sure that employees get back to work at the soonest possible time to ensure not just the worker’s productivity, but also that of the retail store by providing employees with like-duty assignments. In cases where the store is unsure of what position to give, they could call claims management to help them find a suitable duty. So far, the program was able to accommodate 100 percent of its employees and have been an effective solution to minimize the time employees missed work (Gentry, 2008).

ServiceMaster offers a variety of services that ranges from household services such as lawn care, landscaping, furniture repair, pest control, cleaning, and restoration to disaster recovery and property restoration. As such, most workers are exposed to various types of work-related injuries because their job involves them to be on the road, do manual labor, and utilization of heavy equipments and machinery. The first step that the company did was to do a risk audit to identify areas of safety concerns. After which, a comprehensive plan was initiated to implement the recommendations. This prompted an overhaul in the system and caused significant changes in the organization. But the most important was that it changed the organization’s culture, particularly in its perception of safety. The company believed that to be truly the best, it must be able to take care of its employees’ safety—their most valuable assets. Thus, they adopted a “Captain of the Ship” philosophy wherein managers are responsible for the safety of their people. They must be able to go home to their family in the same condition that they have reported for work. If a worker finds that the site is unsafe, he has the right to claim that the site is unworkable due to safety issues. Secondly, the company has established various compensation programs in recognition of outstanding performance in terms of keeping the team safe. Moreover, the company does regular audit on areas of safety that could still be improved as well as regular reports regarding performance reporting, alternative risk management among others, to promote not only productivity but safety among its employees as well (McDonald, 2008).

Disney’s approach to risk management is through grassroots efforts—with a prestigious reputation, the company finds its mandate on ensuring workers’ safety and care for injured employees. The organization’s lost control and safety program through a business-unit level approach. Risk management support starts from top to bottom. Top executive levels ensure that there is enough awareness regarding risk management through effective communication. All managers are expected to report all incidents and to effectively address the concern to prevent future incidents of the same kind, through its “Safety Management Program.” Another measure being undertaken by the company is developing technologies that would prevent or minimize injuries such as the “Shoes for Crews” program wherein the company is trying to develop its own line of shoes that would reduce slip-and-fall among its food crews and the “Bedwedge” that minimize motion strains in changing linens among its housekeeping team (Gusman, 2008).

Beighley, D. (2007, November). Cos. Bracing for Workers' Comp Hike; Outsourcing Alternative? Orange County Business Journal, 30(45), 48. Retrieved May 23, 2010, from ABI/INFORM Dateline database.

Gentry, C. R. (2008, September). Target Hits the Mark on Claims Management. Chain Store Age, 84(9), 42. Retrieved May 23, 2010, from ABI/INFORM Global database.

McDonald, C. (2008, August). Risk Management Overhaul Helps ServiceMaster 'Hit the Trifecta' On WC. National Underwriter. P & C, 112(31), 12-13, 15, 30. Retrieved May 23, 2010, from ABI/INFORM Global database.

Gusman, P. (2008, August). Walt Disney Delivers Big WC Savings By Involving Entire 'Cast' In RM Roles. National Underwriter. P & C, 112(31), 16, 20, 28. Retrieved May 23, 2010, from ABI/INFORM Global database.