Connecting business unit manager bonuses to safety performance can reduce injuries and eliminate comp costs, but a grocery chain's settlement with prosecutors shows how attempts to reduce claims can go too far.
Several risk managers speaking at the Risk and Insurance Management Society Inc.'s annual conference last week discussed implementing a safety culture and reducing comp costs.
They spoke about tying manager bonuses to comp losses as one among several efforts they employ to maintain a safety culture. A couple of the risk managers briefly mentioned that the bonus practices can have drawbacks, but they didn't elaborate.
But here is one potential problem.
This week several California district attorneys announced a settlement involving Raley's grocery stores. The grocer will pay $550,000 to settle charges for alleged illegal claims handling.
According to a press release available here, store managers tried to dissuade injured employees from filing comp claims.
The prosecutors didn't say whether manager bonuses were at stake.
But the investigation “revealed a fairly widespread practice by Raley's managers of attempting to dissuade injured employees from filing claims, suggesting that injured employees use their own health insurance for work related injuries, instead of reporting accidents/injuries to the agencies required under the Workers Compensation law,” the press release states.
The charges serve as an example that manager training should accompany bonus programs and other efforts that depend on supervisors to help reduce losses.
While manager participation is often crucial, there are limits.
Part of Raley's settlement agreement requires the company to train its managers.
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