Experts Advise More Focus for Ergo Efforts

An ergonomics plan focused on worker well-being as well as performance is good for workers and good for the bottom line.

By: Nancy Grover | September 14, 2015

Companies that limit their ergonomics efforts to promoting employee safety are missing an opportunity, say experts. In fact, employees in these situations may feel stressed to use a new system that may result in lower production levels.

Instead, ergonomics environments should equally promote worker well-being and improvements to organizational productivity. The result is a synergy that maximizes both outcomes.

“Implementing ergonomic principles in an occupational environment can directly benefit the worker and the organization by reducing physical and mental strain, lowering the risk of occupational-related injuries and illnesses, and improving work performance,” stated a new report.

“By embracing the principles of ergonomics, and establishing a positive ergonomics climate, organizations can enhance both operational performance and employee well-being.”

The findings are included in a study from researchers at Colorado State University and were published in the journal Applied Ergonomics.

The Study

While previous research has focused on the relationship between an organization’s value for employee well-being and workers’ self-reported pain, the authors said few, if any, studies have compared how the values for performance in addition to well-being can work together to predict work-related outcomes.

Researchers from Colorado State University conducted two rounds of questioning at a large manufacturing facility. After an initial pilot test, the authors asked questions of more than 1,000 workers. One year later, they returned to see what, if any, changes had occurred. More than 700 workers participated in the second round of questioning.

Questions reflected the ergonomics concept of designing and modifying work to improve the focus of interest, performance or well-being.

Performance-focused ergonomic climate, or PE, included things such as maximizing productivity and efficiency, quality of product or service, sustainability as a company, maintaining a competitive edge in the market, and completing the tasks necessary for the organization to succeed.

Well-being focused ergonomic climate, or WE, referred to a focus on ensuring the employees were healthy and happy, including reducing their injury and illness risks, addressing quality of work and life issues, improving job satisfaction and supporting work-life balance.

“Employees may resist a new tool or process that reduces injury if they think it will cause them to work more slowly and miss production targets.”

“Through a series of steps we developed the ergonomics climate assessment,” they wrote, “then piloted, refined and obtained preliminary validation evidence for this new assessment.”

Four common factors identified as central to organizational climates that involve ergonomics were management commitment, employee involvement, job hazard analysis, and training and knowledge.

The questions consisted of an equal number targeted to PE and WE, placed side by side. The workers were also asked if they had experienced work-related pain within the prior 12 months. The researchers hypothesized:

Both WE and PE facets of an ergonomics climate assessment will be negatively related to work-related pain.
If both WE and PE facets were rated low, self-reported pain would be higher, and vice versa. They looked at situations in which each was higher than the other.
When employees perceive a discrepancy between the facets, those who said PE was promoted more would report more pain than if the situation were reversed.

The Findings

“Good ergo practice involves understanding that the whole is usually greater (more useful, powerful, functional) than the sum of the parts,” the authors wrote. “This understanding is consistent with our findings that PE and WE facets of ergonomics climate were conceptually distinct but interrelated so much so that incongruence between the two resulted in poor outcomes.”

The perception that either well-being or performance was favored can result in work-related stress and create symptoms of work-related pain, according to the study. For example, a company that emphasizes facets of performance sends a message to workers that production is more important than their own well-being. Emphasizing well-being over performance can be equally as stressful.

“This may cause stress if an improvement is seen as a threat to productivity,” the study said. “For example, employees may resist a new tool or process that reduces injury if they think it will cause them to work more slowly and miss production targets.”

Advice

Companies should employ ergonomics improvements that look equally at a worker’s performance and his overall well-being, the authors advised. This systems approach to occupational ergonomics designs and implements productivity gains concurrently with worker well-being goals.

As an example, they said that manually attaching hydraulic hosts to a subassembly with a hand wrench can be performed faster by increasing the expected yield of the worker, which would likely lead to greater hand fatigue, work stress, and poorer quality.

By using a systems approach to ergonomics, a redesign may include the use of a power driven wrench that results in greater output, less physically demanding hand motions, and less worker stress.

Creating and implementing such a system can help companies identify areas for improvement. In the case of the manufacturing facility used for the study, the first round of questions revealed a poor ergonomics climate assessment score in one production department. The company undertook an intervention of engineering and administrative changes to correct the problem.

Personnel involved included a team of production operators, maintenance and engineering staff and management.

The results of the second round of questioning indicated “a significant increase in both PE and WE facets of ergonomics climate for that production department,” the authors wrote.

“Thus the ergonomics climate assessment may be a practical and useful tool for organizations looking to understand and improve their ergonomics climate. This tool can be used as a baseline to assess the effectiveness of organizational efforts focused on improving ergonomics as well as a measure to assist in the prioritization of ergonomics interventions during periods of limited resources.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected].

How a Carrier Partner Can Help Navigate a Challenging Management and Professional Liability Market

A combination of a choppy economy with increased claims frequency and severity could lead to rate increases in the Management & Professional Liability market.

By: Risk & Insurance | April 3, 2024

Rates in the management & professional liability (M&PL) markets were on the rise from 2020 to early 2023 and are now falling rapidly.

M&PL divisions manage a number of different insurance products including management liability (D&O), professional liability (E&O), employment practices liability (EPL), fiduciary liability policies, cyber, etc. In 2023 and into 2024, a big influence on the marketplace has been the extremely aggressive and softening public company D&O market.

Though these rates have been softening for management liability, that may change over the next few years as companies continue to adjust their business models motivated by economic uncertainty. Layoffs were up nearly 200% last year, Forbes reported, even as other recession indicators, like the inflation rate, improved. A recession could lead to an increased claim activity and force carriers to raise rates.

“Whenever there is a meaningful downturn in the economy, we tend to see claim frequency pop up,” said George Schalick, Jr., senior vice president of the Management and Professional Liability Division at Philadelphia Insurance Companies (PHLY).

With continued fiscal uncertainty, businesses potentially already burdened with pandemic-related claims should seek a carrier with a long history in M&PL products. They will provide much-needed risk management guidance and be better positioned to support their insureds during market fluctuations.

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Philadelphia Insurance Companies. The editorial staff of Risk & Insurance had no role in its preparation.

Ergonomics