Loss Prevention

This practice has little to do with managing losses or minimizing costs. In fact, the opposite is frequently true. As an organization improves its loss control management, frequency rates will typically rise, due to increased awareness and the removal of negative consequences for reporting incidents. Using OSHA statistics as a safety program goal commonly leads to underreporting of less-severe injuries and eliminates opportunities for early intervention. Organizations with low OSHA incidence rates and high worker’s compensation costs abound. Excellent companies do not broadcast OSHA statistics to employees nor make them part of a communicated safety goal. They are rewarded with rich data used to preempt future incidents and lower worker’s compensation costs.

The single greatest untapped opportunity to improve operating performance and impact the bottom line is to develop excellence in operating reliability and safety -- Yet many organizations today continue to misuse fundamental concepts and suffer the negative consequences.

This common practice is very dangerous, and virtually guarantees underreporting. In the extreme, seriously injured workers have been escorted off company property rather than report the incident. No person wants to be blamed for ruining the 10 million hour record. This practice is costing organizations plenty.

The Warning Signs: (click on red bullets for more information - Javascript must be enabled)

Senior executives are frequently surprised when survey feedback is critical of their commitment to safety. Others will candidly admit that they don’t feel safety programs add value. Employees typically view safety programs as superficial. In spite of over 30 years of Federal regulation and enforcement, lost workday injury rates have only marginally improved. Most organizations adhere to a process that continues to mask the true causes of accidents and losses

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Using OSHA 'recordable' statistics as a measurement of performance or a program goal

Using prizes, incentives, and safety meetings as major components of a prevention program

Trinkets and small prizes are almost never used in other corporate functions, so why are they used in safety? In addition, there is virtually no correlation between the frequency of “safety” meetings and lower worker’s compensation costs. Many studies have found no relationship between the investment in safety programs and lower accident rates. A single program frequently generates completely different results within the same organization. Organizations can achieve safety excellence in the complete absence of a visible safety program. They don’t have safety meetings, safety processes, and safety committees – they have production meetings, manufacturing processes and work committees (integrating safety into the processes of the business).

Displaying posters and banners that count days or hours since a lost-time accident

Pressuring employees for safety results without their buy-in and with little knowledge of the true causes of accidents

Viewing safety as an employee responsibility rather than an organizational problem

Absorbing costs related to losses as corporate overhead rather than allocated directly back to the operating units

There’s no such thing as a safety problem. Poor safety performance is almost always a symptom of other more basic organizational and cultural problems, which focus on management and leadership. Employee behavior doesn’t cause accidents; the “system” causes accidents. It’s not a question of finding the right workers; it’ a question of changing the system.

Companies should hire partners, not employees. A significant portion of compensation should to be tied to the long-term financial health of the organization. Total worker’s compensation costs needs to be accurately measured and allocated back to operating units, to embed safety into operations. When employees become partners in an organization, trust and respect can displace an adversarial climate.