A study in risk management policy: A comparison between public and private organizations

The workers' compensation system was designed to be a no-fault, administrative system. However, for many years, our nation has experienced the problem of increasing costs within the system. Many employers, who are diligent in controlling their overhead in other areas overlook opportunities to control workers' compensation costs. The result diminishes the business' profit potential, reduces productivity, and ignores the company's most valuable resource---its employees. The purpose of the study was to identify successful risk management policies and programs and their cost effectiveness.; The literature review analyzed the history and recent reforms in the workers' compensation system. It examined the various theories of accident causation and loss prevention techniques. The study also identified the function of a risk manager and the essential components of an effective safety program.; This study analyzed organizations in California who demonstrated exemplary loss control programs within their respective groups based on the data and the input of industry experts. The organizations chosen for the study were a selected, purposeful sample based upon these factors.; Overall, workers' compensation programs for private entities in study were more effective. The results showed that an increase in accountability and management support of organizational efforts to reduce costs in the workers' compensation program will facilitate and ease the process of implementing the programs necessary to generate these savings. Private and public entities both scored well in the area of management support suggesting that these organizations may have a much easier time in implementing the policies necessary to reduce costs.; The results of the survey report the elements that have the greatest impact on costs. If school districts learn to manage risk better, they would then be able to focus on putting more money into the classroom. Private industry savings result in profits, while school district savings result in more money allocated to the classroom and for kids. However, it is important to understand that the money must be spent properly and that effective leaders, and not just additional positions, are needed. The end result in all of these efforts is to provide more money for kids.