Hidden Work Comp Foundation: Profit vs Purpose

There are elements in your workers’ compensation program that may be creating challenges without you even realizing it. These challenges can stem from incentives, employee motivations, policies, or procedures that deliver unintended consequences. Understanding these hidden factors requires a deeper look at what truly drives human behavior in the workplace.

Drivers of Human Behavior in Workers’ Compensation

The science of human behavior has been studied extensively, and one of the most insightful works on the subject is Drive by Daniel Pink. The book highlights years of research into what motivates employees and how organizations can align their incentives to create a more engaged workforce.

When applied to workers’ compensation, understanding these behavioral drivers can reveal how well-intended policies may be unintentionally encouraging behaviors that increase claims, prolong recovery times, or inflate costs.

Corporate-Level Motivations: Profit vs. Purpose

The first step in identifying hidden challenges in your workers’ compensation program is to examine what fundamentally drives your organization:

• Is the company’s primary focus profit at all costs?
• Or is there a greater purpose to make a meaningful contribution to employees and society?

This distinction plays a crucial role in safety culture. For example:

• If production is prioritized over safety, employees may feel pressured to work through injuries or avoid reporting them.
• If a company values employee well-being, they are more likely to shut down production when unsafe conditions arise.

While slogans and mission statements may claim a commitment to safety, the real driver of corporate culture is found in the everyday actions and priorities of leadership. Employees recognize when safety is treated as a priority—or when it’s merely a box to check.

How Incentives Shape Behavior in Workers’ Comp

Incentives—both financial and non-financial—are at the heart of many workers’ comp challenges. When misaligned, they can produce unexpected consequences, such as:

1. Safety Incentives that Discourage Reporting

   • Many companies use safety programs that reward employees for reaching milestones without reported injuries. While this seems logical, it often results in employees not reporting injuries out of fear they’ll cost their team a bonus.
   • The unintended consequence? Small injuries go unaddressed, leading to more severe claims down the road.

2. Extended Time Off as an Incentive

   • If employees see staying out on workers’ comp as a better financial or lifestyle option than returning to work, they are less likely to participate in transitional duty programs.
   • A well-structured return-to-work program, combined with proactive communication, can help prevent unnecessary lost time.

3. Doctor Selection and Treatment Direction

   • When employees have free rein in selecting medical providers, they may seek treatment from doctors who are known for keeping workers off duty longer.
   • A carefully managed medical provider network ensures injured employees receive appropriate, outcome-focused care, rather than prolonged disability.

The Role of Internal Communication in Workers’ Comp Success

One of the most overlooked factors in claim outcomes is how employees perceive their employer’s response to injuries. An employee who feels cared for and supported will likely have a shorter, more positive recovery. However, if they feel ignored, blamed, or uncertain about their benefits, they may be more likely to:

• Hire an attorney.
• Prolong their recovery.
• View workers’ compensation as an adversarial process.

Regular communication, including weekly check-ins with injured workers, can significantly reduce claims duration and litigation risk. A simple “How are you feeling?” from a supervisor can go a long way in keeping the process human-centered.

Shifting from a Compliance-Based to a People-Based Approach

Traditional workers’ compensation programs often focus on compliance and cost control, but real success comes from a people-first strategy. Companies that recognize the human elements—such as fear of job loss, financial stress, and medical uncertainty—can design programs that support both the employee’s recovery and the company’s bottom line.

By re-evaluating your company’s approach to workers’ compensation through the lens of human behavior, safety culture, and incentives, you can uncover hidden challenges and shift toward a program that reduces costs while improving outcomes.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.com/

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