Workers Compensation

Workers compensation can be defined as the ultimate form of insurance or program that is tailored for workers as a way of compensating them whenever they injured while on employed to prevent them from taking legal action against their employer for tort negligence. In reference to Shafer (2006) it has been argued in the past that companies across the globe and in the United States cannot be able to control workers compensation costs (p.12). However, this is not the case. On the contrary, there are important steps that can be taken to contain workers compensation costs by reducing these costs (p.12). In consistent with this, this essay paper will compare and contrast the ways in which Disney, Target and ServiceMaster have dealt with workers compensation through risk management.

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To begin with, Disney, ServiceMaster and Target have formulated a culture of valuing its employees as the most important part of the company, without which the success of these companies is jeopardized. According to Gentry (2008), at Target, employees are part of the team and thus they are not perceived as commodities (p.42). As a result, this company has developed goals to ensure that whenever its employee falls sick or is injured, he or she should be back to work as soon as possible since this is the right thing that can be done to a team member (p.42). This is the same case with Disney. In reference to Gusman (2008), this company has developed a corporate culture that values reputation under which disregarding safety of its employees and care for the injured workers is perceived as a great contradiction that cannot be tolerated (p.16). In line with this, such attitude towards employees has made its easier for Disney to deal with workers compensation claims.

Similarly, ServiceMaster has developed a corporate culture that promotes the safety of its employees while on work. McDonald (2008) reiterates that this company has developed a policy that guarantees that each and every day employees should leave the branch in the same condition as when they arrived (p.p.13). In other words, the safety of its employees remain as one of the most guarded factor in as much as the company is inclined towards making profit on a daily basis. As a result of this, it is very difficult for this company to ignore the safety of its employees, not only at the end of the financial year but on a daily basis.

According to Snashall (2005), there are different policy reforms that have been implemented in the recent past to minimize cases of compensation claims that have been perceived as a stumbling block to the overall growth of the economy (p.S-5). However, the greatest responsibility lies with the company that has employed these workers. In this regard, these companies are mandated with the task of developing long lasting programs that would limit the workers compensation costs rather than developing quick-fix programs. An effective workers compensation cost containment program is a systematic and thorough approach to cost reduction –not a quick-fix (Shafer, 2006, p.12). Similarly, keeping a workplace safer also plays a significant role in reducing WC costs (Beighley, 2007, p.48). As it can be noted, these companies namely; Target, Disney and ServiceMaster have developed safety standards that are adhered to guarantee employees’ safety.

In addition to these programs, insurance plays an important part in managing these costs. For instance, California requires employers to obtain insurance to cover potential workers' compensation claims and sets up a fund for claims that employers have illegally failed to insure against (The Legal Information Institute, 2008). With this in mind, another similar action that has been taken by the three companies, i.e. Disney, Target and ServiceMaster is to take an insurance cover that target to foot the costs of workers compensation costs. According to Gusman (2008), while insurance is the highest expense at each branch of Disney, it has reduced retained risk cost by 60 to 80 percent (p.28). In regard to ServiceMaster, better performing branches are rewarded with a lower percent of the company’s insurance costs, while poor-performing branches are penalized with higher percentage (McDonald, 2008, p.15).

On the other hand, there are strategies that are employed by these companies that display a lot of contrast from each other in their approach to safety. To begin with, Target has devised ways of accelerating the reporting of incidences. Gentry (2008) asserts that this company has custom-designed electronic forms to accelerate reporting of incidences (p.42). On the contrary, ServiceMaster use performance reporting to track the performance of its different branches, and reward those branches that perform better especially in attaining specified improvement targets at year end (McDonald, 2008, p.15). On the other hand, Disney uses safety scorecards at the theme parts and resort segment to report –by area and line of business –the OSHA frequency rate for both medical only-only and lost-time claims (Gusman, 2008, p.20). In addition to this, whereas this company has a report system just like Target and ServiceMaster, its reporting system is designed in such a way that reporting is done electronically and requires leaders to address the means for future prevention using an online application (p.20).

In summation, it can be said that Workers Compensation costs are among the costs that companies across the globe continue to incur on a daily basis. However, these companies have the responsibility of ensuring that they have developed appropriate programs to meet and address costs that arise from employee sickness and injury while on work. Companies that have adopted these measures before have been able to reduce these costs substantially. For instance, companies such as Target, Disney and ServiceMaster have managed to reduce these costs by a substantive margin.

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