Risk Management
TCHRA
2013
Larry Morgan, SPHR, GPHR, MAIR
Orion HR Group, LLC
©Orion HR Group, LLC
PHR / SPHR Exam
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8% of exam for PHR
7% of exam for SPHR
Questions tend to be easier in this
module
We’ll cover items most likely to be
on exam
What areas are covered in this
module?
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Six sections
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Organizational Risk
Key Legislation
Safety
Health
Security
Privacy
What is Risk Management?
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It is the chance that something will
happen, positively or negatively,
that will affect business goals and
objectives.
It is the use of insurance and other
strategies in an effort to prevent or
minimize an organization’s
exposure to liability in the event a
loss or injury occurs.
Risk management techniques
Assess Risk
Evaluate / modify
systems
Monitor
Efforts
Develop
Systems
Implement
Programs
Operational Risk includes:
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Personnel risk
Physical assets
Technology
Relationships
External/regulatory
Types of situations
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Worker injury and safety
Violence
Fraud
Theft
Lawsuits
Natural disaster / business continuity
Pandemic
PC Virus
Addressing Risk Analysis
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Conduct audit to assess security
risk factors (vulnerabilities)
Four categories
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Virtually certain
Highly probable
Moderately probable
Improbable
Risk analysis, continued
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Assess against impact or cost
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Cost to permanently replace lost or damaged assets
Cost to temporarily replace lost or damaged assets
Cost of related losses caused by the inability to
carry on normal activities
Cost of loss of investment income from short term
expenses incurred to meet these costs
Severity of impact placed in four levels
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Level
Level
Level
Level
1
2
3
4
–
–
–
–
Fatal to the organization
Very serious
Moderately serious
Not serious or negligible
Why should HR Care?
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Examine HR policies / procedures to
determine organization risks
Provide a safe work environment
Understand and minimize / eliminate risk
Collaborate with other functional areas
Monitor compliance with laws and
regulations
Communicate policies and procedures
Provide risk mgmt training programs
Evaluate the effectiveness of programs
HR role
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Handling “people” risks
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Staffing
Personnel policies
Insurance polices (workers comp,
unemployment comp, disability, health care)
Access issues to facilities and technology
Training
Compliance and regulatory
Safety
Risk assessment
Disaster recovery
HR and Staffing
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Cannot ask potential employees about workers
comp claims, accidents, etc.
Questions regarding criminal activities must be
job related and based on convictions, not arrests
ADA issues
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Job description and essential functions
Identify physical requirements
Due diligence regarding negligent hiring and
negligent retention
Contingent offer must be made before medical
testing (drug, physical exam, blood pressure, etc)
Testing must be job related and validated
After contingent offer, you may ask about
workers comp, disabilities, etc.
OSHA Background
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Following several major industrialized
accidents including fire and mine
explosion
No state standards
OSHA created in 1970 to standardize
reporting and create federal agency to
regulate safety
Mission is to enact and enforce federal
safety regulations
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Uses “carrot and stick” approach
Able to inspect and issue citations and fines
Track data
Key legislation in Risk Management
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Mine Safety and Health Act
Drug free workplace act
USA Patriot Act
Homeland Security Act
Americans with Disabilities Act
Fair Labor Standards Act
OSHA
Electronic Communications Privacy Act
Genetic Information Nondiscrimination
Act (GINA)
Cause of Accidents
 20%
of injuries are caused
by unsafe conditions
 80%
of injuries are caused
by unsafe acts
OSHA General Duty Clause
Organizations have “a general duty to
provide a workplace that is free from
‘recognized hazards’ that are likely
to cause death or severe physical
harm”.
OSHA Rights
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The right to demand safety and health on
the job
The right to demand inspections
The right to have an authorized employee
representative accompany an inspection
The right to file a complaint
The right to be informed of workplace
hazards
The right to receive training
Key OSHA standards
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OSHA has six volumes of standards in the
Code of Federal Regulations (CFR)
Four major categories
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General industry
Maritime
Construction
Agriculture
Mining industry covered under Mine
Safety and Health Act
OSHA Standards
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Emergency exit standards
Occupational noise exposure
Machine guarding
Personal protective equipment
Process safety management
Hazard communication
Control of hazardous energy
Confined space entry
Bloodborne pathogens
Hazard Communication Standard
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Employees must be informed if
working with hazardous materials
Must be trained at time they are
assigned
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Audiovisual, classroom, interactive
Material Safety Data Sheets
Additional training may be required
What is “lockout/tagout”?
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Equipment that is being serviced or
not functioning properly should be:
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“deenergized”
Isolated from energy sources
Locked or tagged
If “lockable”, it is locked out and
unusable
A “tagout” is a “do not use” or “out
of service” label on the machine
What is meant by confined space?
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Areas with unique physical hazards
Includes manholes, sewers, tunnels
Hazards include:
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Excessive heat
Insufficient oxygen or too much oxygen
Toxic or flammable gasses
Danger of being trapped
Special OSHA regulations apply
What is meant by Sick Building
Syndrome?
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Employees get acute illness for no
apparent reason
Possible causes:
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Stress
Inadequate ventilation
Chemical contaminants from internal causes
Chemical contaminants from external causes
Biological causes
Investigate cause
Air sampling
Bloodborne pathogens
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Needlestick Safety and Prevention Act of 2000
Microorganisms found in human blood that can
cause disease such as HIV, AIDS, Hepatitis B
If at least one employee may be exposed to
potentially infectious materials in the course of
duties, there must be:
 Written exposure control plan
 Employee protection
 Employee training
 Offer occupationally exposed employees the
hepatitis B vaccine
Use safer devices
Tracking log of all needlesticks, not just those that
actually lead to disease
Maintain privacy of employee who suffer
needlesticks
OSHA record keeping requirements
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Employers with more than 10
employees must report all employee
occupational injury and illness data
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Occupational injury
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Occupational illness
Recording criteria
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Employers are required to record work
related illness and injury if they result in:
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Death
Days away from work
Restricted work or transfer to another job
Loss of consciousness
Diagnosis of a significant injury/illness by a
physician or other licensed health care
professional
Medical treatment beyond first aid
OSHA Forms
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Form 300: Log of work-related
injuries and illnesses
Form 300A: Summary of work
related injuries and illnesses
Form 301: Injury and illness
incident report
For information, go to:
www.osha.gov/recordkeeping/new-osha300form1-1-04.pdf
OSHA Form 300
OSHA Form 300A
OSHA Form 301
Incidence rates
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Recordable incident rate
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Example
DART (Days away/restricted or
transfer rate)
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Example
Recordable Incident Calculation
Axeman Company Example
Number of OSHA Recordable Cases (15) x 200,000
Number of Employee Labor Hours Worked (400,000)
=
Incidence rate of 7.5
Days Away / Restricted or Transfer (DART)
Rate Calculation
Slippery Fred’s Company Example
Number of DART incidents (10) x 200,000
Number of Employee Hours Worked (400,000)
=
DART rate of 5
OSHA Inspections and priorities
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First priority- imminent danger
Second priority – Catastrophes and
fatal accidents
Third priority – Employee complaints
Fourth priority – Referrals
Fifth priority - Follow-ups
Sixth priority – Planned
Investigations and high hazard
industries
Question
An employee calls OSHA complaining
of a problem with scaffolding on a
multi story worksite in which workers
could fall and seriously injure
themselves. What priority would this
have:
a) First
b) Second
c) Third
d) None, the employer must call
Inspection procedures
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Opening conference
Physical inspection
Closing conference
Question
OSHA representatives show up and
demand an inspection. The employer
demands a search warrant before
allowing them on premises. How is this
handled?
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The employer has no right to request a
search warrant
If OSHA has police present, there is no need
for a warrant
OSHA and leave and return with a warrant
OSHA will levy additional fines for the delay
Violations and penalties
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Five levels
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Willful
Serious
Other than serious
Repeat
De minimus
Citations
Other safety issues
Safety programs
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Definitions
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Incident
Safety hazard
Priorities
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First priority – eliminate hazard completely
Second priority – use safeguards
Third priority – use warning signs
Fourth priority – train and instruct
Fifth priority – Provide personal protection
Safety committees
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Clear purpose
Focus is on prevention and
awareness
Electromation case
Group recognition with tangible
rewards
Educate on safe work habits
Plant safety scorecards
Accident scene priorities
1.
2.
3.
4.
5.
Arrive safely and take charge, evaluate the
situation, care for the injured, protect others
from injury
Protect the mishap site, keep management
informed, contact appropriate state and federal
officials
Control crowds and traffic, take photos or make
sketches, hold witnesses together, erect barriers
Gather samples of evidence, label samples, take
measurements, identify photos and sketches,
identify witnesses by name and contact info
Interview in a quiet, neutral setting; tell
witnesses the purpose of the interview; let
witnesses tell their story; take notes; avoid
leading questions, be neutral
Accident investigation
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An accident is an undesired event that
results in physical harm to a person or
damage to property
Learn why the accident occurred
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Investigate the scene of the accident
Interview the injured employee, supervisor and
witnesses
Complete the accident investigation report
Make changes that will prevent future
accidents
Communicate with the employee
Ergonomics
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Proper design of work environment to address the
physical demands experienced by employees
Assess physiological factors and psychological
factors
Methods
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Ergonomic team
Work site analysis
Redesign of job
Workplace surveys
Training
Onsite exercise programs
Monitor
Ergonomic issues
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Musculoskeletal Disorders (MSD)
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Repetitive motion injuries such as
Carpal Tunnel Syndrome
Tendonitis
Bursitis
Video Display Terminals
Lower back strains
Sick building syndrome
Modified duty programs
Ergonomic problems
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The method used or required to do the
job
The effort or strength required to do the
job
The location or position of parts,
equipment, or tools
The speed or frequency of the work
The duration or repetition of the tasks
The design of the parts, equipment or
tools
Ergonomic issues
Administrative or Engineering?
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Administrative
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Lack of recovery time between shifts
Excessive overtime
Insufficient breaks
Stressful work organizations
Increase in production demands
Inadequate training
Engineering
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Outmoded equipment design
Inadequate seating or positioning
Improper alignment or setup
Physical risk factors
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Repetitive motion
Rapid hand and wrist movement
Awkward posture or seating
Heavy lifting
Hand arm vibration
VDT- improper alignment of computer
screens
Employee self modification of work space
Question
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The VP of HR for a software
company is concerned over the
incidence of carpal tunnel syndrome
and has asked for your help in
addressing the issue.
What are possible courses of action?
Health issues
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Infectious diseases
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HIV
AIDS
Hepatitis B and C
Tuberculosis
Pandemics
Environmental health
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Physical (heat, noise, vibration, air
conditioning, radiation, ventilation,
smoking, sanitary conditions,
drinking water, workplace design)
Chemical (dust, fumes, gases, toxic
materials, toxic chemicals,
carcinogens, smoke)
Biological (bacteria, fungi, insects)
Employee assistance programs
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In house or outside contractors
Services are generally 24/7
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Alcohol and drug abuse counseling
Emotional counseling
Family and marital counseling
Legal counseling
Financial counseling
Career counseling
Workplace violence counseling
Referrals
Management support
Employee wellness and fitness programs
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Flu shots
First aid and CPR training
Health risk assessments
Health fairs
Wellness / exercise / physical fitness
Nutrition education
High blood pressure control
Weight control
Stress reduction
Smoking cessation
Drug testing
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Drug free workplace act
Department of transportation
When do you test?
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Pre-employment
Random
Post accident
Post treatment
Annual or periodic
Reasonable suspicion and for cause
Types of drug testing
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Blood
Urine
Saliva
Hair
Breath alcohol
Intervention strategies
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Constructive confrontation
Counseling
Referral
ADA and drug use
Workplace Security
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Fire
Industrial sabotage
Trespassing
Employee theft
Executive kidnapping
Theft/sabotage of classified information
Violence
Terrorism
Security measures
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Guards
Identification and control systems
Structural barriers
Security hardware
Surveillance and monitoring
Question
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An organization is conducting
layoffs with several staff. What
steps may be taken to reduce risk
of violence or litigation?
Theft and fraud
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Inventory counts
Fraud hotlines
Sound auditing procedures
Video surveillance
Dollar limit authority
Checks and balances
Internal financial procedures
Controls for audit and access
Use of polygraph and other mechanical/
electrical devices
Emergency response plan
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Natural disaster
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Flood
Fire
Tornado
Earthquake
Volcanic eruption
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Human disaster
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Civil disaster
Labor disturbance
Chemical/gas leak
Explosion
Blackout
Brownout
Workplace violence
Pandemic
Mandated vs. Voluntary plans
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OSHA mandates employers who store,
manufacture, or use highly toxic
chemicals, toxins or reactive materials to
have emergency response plans and
training to employees
FEMA has sample emergency plans on
their website
American Red Cross
Purchase or develop plans
Key steps in plan
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Must be customized
Involve senior management
Create a team
Identify coordinators
Have plans offsite
Clear priorities
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Protect life
Eliminate risk of injury
Save assets
Minimize loss
Resume normal operations as quickly as possible
Identify resources
Communicate the plan
Test the plan
Keep the plan current
Workplace violence
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Causes
Warning signs
HR response
Workplace privacy
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Protection of proprietary information and
trade secrets
Technology security risk
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Identify theft and Red Flag rules
HITECH regulations
Monitoring employees
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Workstation / Network
Database / Software
Hackers / virus
Electronic Communications Privacy Act
European Union Data Privacy
Provide training to employees
Whistleblowing
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Now required for SOX companies
Identify clear process and policy
Allow anonymous reporting
Develop investigative process
Communicate to employees
Take prompt action
Provide appeals process
No reprisals
Liability Insurance
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Employment Practices Liability
Insurance (EPLI)
Professional liability
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Professional liability insurance
E&O
D&O
Fiduciary status of HR
Corporate governance
Question
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What type of insurance would
mitigate claims of negligence in
performance of professional
services by managers?
Workers compensation
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Covered in other areas of course
State program, not federal
Covers job related injury and illness
Medical expenses and lost wages
May be self insured or fully insured
Rates based on occupation, employee
demographics and experience
Genetic Information
Nondiscrimination Act (GINA)
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Prohibits employment action based
on genetic factors
Caution
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Pre-employment physicals and
questionnaires
Wellness programs
Personnel file contents
HIPAA and PHI / ePHI information
Key terms- know these!
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Acquired immune deficiency
syndrome (AIDS)
Bloodborne pathogen
Building related illness
Business continuity planning
Computer vision syndrome
Confined space entry
Cumulative trauma disorders
(CTD)
De minimis violation
D&O coverage
Disaster recovery plan
Drug free workplace act
Early return to work program
Emergency exit procedures
(means of egress standard)
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Employee Assistance Program
Employment practices liability
insurance
Enterprise risk management
(ERM)
Ergonomics
Errors and Omissions (E&O)
insurance
Fetal protection policies
General duty clause
GINA
Hazard
Hazard communication
standard (employee right to
know)
Homeland Security Act
Human Immunodeficiency
Virus (HIV)
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Incident
Job burnout
Lockout
Machine guarding standard
Material Safety Data Sheets
(MSDS)
Mine Safety and Health Act
Modified duty program
Musculoskeletal disorder
(MSD)
National Institute for
Occupational Safety and
Health (NIOSH)
Needlestick Safety and
Prevention Act
Occupational illness
Occupational injury
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Occupational Noise
Exposure (hearing
conservation) standard
Occupational Safety
and Health Act (OSHA)
Occupational Safety
and Health
Administration (OSHA)
Occupational Safety
and Health Review
Commission (OSHRC)
OSHA Form 300
OSHA Form 300A
OSHA Form 301
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Other than serious
violation
Pandemic
Personal Protective
Equipment Standard
Process Safety
Management Standard
Professional liability
insurance
Proprietary
information
Repeat violation
Risk management
Risk management
scorecard
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Safety committee
Serious violation
Sick building
syndrome (SBS)
Tagout
Unsafe acts
Unsafe conditions
USA Patriot Act
Voluntary protection
program
Vulnerabilities
Wellness program
Willful violation
Sample Quiz questions
Question 1

An employee does not use hearing
protection required for the job.
This is an example of:
a)
b)
c)
d)
An unsafe condition
An unsafe act
A willful violation
The Darwin effect
Question 2

Communication to employees
about toxic substances they may
be exposed to is required by:
a)
b)
c)
d)
ADA
GINA
Hazard communication standard
Workers compensation carrier
Question 3

Return to work programs require
injured employees:
a)
b)
c)
d)
Return to work with less strenuous
jobs on a permanent basis
Refrain from FMLA until they are
medically clear to return to work
To stay away until fully clearly to
perform all duties
Perform jobs that accommodate
current limitations
Question 4

The top OSHA priority for
investigations is:
a)
b)
c)
d)
Employee death
Employee complaints
High risk industries
Hazardous situations
Question 5

Which OSHA form must be posted
by February 1 of each year:
a)
b)
c)
d)
OSHA
OSHA
OSHA
OSHA
Form
Form
Form
Form
EEO-1
300
300A
301
Question 6

Which role should a safety
committee play at work:
a)
b)
c)
d)
Train employees
Investigate accidents
Record annual accident rates
All of the above
Question 7

Reducing the chance of infection in
the workplace can be accomplished
through all of the following
EXCEPT:
a)
b)
c)
d)
Education including frequent
handwashing
Strong disciplinary action
Effective absence management
programs to encourage staying home
when ill
Protective clothing
Question 8

A two year employee with no history of
problems or discipline becomes moody
and has absence and quality problems. In
meeting with the employee, the
supervisor learns that the employee is
having financial problems. The employer
should:
a) Ignore the work behavior
b) Drug test the employee
c) Refer the employee to employee
assistance program
d) Discipline the employee
Question 9

A major component of a security
risk analysis is to:
a)
b)
c)
d)
Identify potential problem employees
Determine the cost ratio of loss to
expense
Determine the risk factors
Determine the cost of lost or damaged
goods
Question 10

A primary cause of employee
violence is:
a)
b)
c)
d)
Poorly handled terminations
Working in high crime areas
Working with the general public
Guarding expensive or valuable
property
Your questions?
Larry Morgan
952-210-0742
larry.morgan@orionhr.com
www.orionhr.com