The SESCO Report – September 2014

Preventing Questionable Workers' Compensation Claims

One of the most stressful issues that management experiences is receiving a notification letter from an employee or an attorney that an employee is filing a Workers' Compensation Claim — particularly when the claim was not reported or made aware to the employer. It becomes even more frustrating when you have the gut feeling or suspicion that the claim is questionable.

Although these types of situations are extremely difficult to avoid due to the vicious triangle of pro-workers' comp attorneys and physicians concerned with liability and the fact that most workers' comp providers do not actively support their client. More and more carriers are simply paying and allowing the client, the employer to reside in this vicious triangle, attorney — physician — workers' comp costs.

Employers must be more than ever proactive in preventing claims. The following are SESCO's staff recommendations on how to avoid frivolous workers' compensation claims. While there isn't any single best way to protect yourself against these types of claims, there are SESCO best practices that you can implement to make it much more difficult for someone to file a questionable claim.

1. Conduct documented exit interviews that include a question on whether the exiting employee sustained any work-related injuries while working for your organization.

2. After a job offer has been made and before the employee begins work, have the individual complete a workers' compensation claim history that will be filed in the employee's medical file for potential future reference.

3. Implement a clear and concise written policy that allows for immediate termination for filing fraudulent workers' compensation claims.

4. Implement a written policy that requires employees to immediately report all work-related injuries no matter how minor. Include this written policy in your new hire packet as well as in your employee handbook. Include in the policy that workers' compensation may be denied for not reporting a claim immediately.

5. Provide employees with information and/or access to short-term disability benefits for disabling injuries that happen away from work. Many employees get hurt at home or away from the job and do not have any other coverage and thus turn it into a workers' compensation claim.

6. Require the employee that has sustained a work-related injury to prepare a statement of when, where and how they were injured. This is in addition to an investigation. Have the employee sign and date the statement. Additionally, require management to complete an Accident Investigation Report that also states how, when and where the employee was injured. Note any discrepancies or conflicting statements.

7. Interview, reduce to writing and have witnesses sign and date what they witnessed. Again, note any discrepancies or conflicting documentation.

8. Place fraud awareness posters on bulletin boards throughout the organization. These fraud awareness posters clearly state what fraud is and what the consequences are for filing fraudulent claims.

9. Check references on applicants you are considering to hire. Most employers do not check references because they do not think they will receive any information. Always check references — references include previous supervisors or managers that the employee worked for. Simply ask if the employee is eligible for rehire. Verify through an effective outside background check firm gaps in employment.

10. When possible, bring back an employee on workers' compensation to modified or light duty. This confuses most employers but if we can get the employee back, particularly within the minimum time frame for claim initiation, the organization will:

Save significant money.
Avoid FMLA and ADA challenges.
More than likely resolve the issue. Either the employee will quit or will know that the employer is serious.

11. Hold your workers' compensation carrier accountable. This is one of the most expensive insurances that an employer is required to have and employers should demand immediate and effective support in case management.
In providing support to our clients throughout the country, one of the most common questions that we receive and one of the most frustrating employee problems that we have to manage is that of fraudulent workers' compensation claims. SESCO has developed a number of systems and practices to include onsite audits that will help employers avoid questionable workers' compensation claims.

In providing support to our clients throughout the country, one of the most common questions that we receive and one of the most frustrating employee problems that we have to manage is that of fraudulent workers' compensation claims. SESCO has developed a number of systems and practices to include onsite audits that will help employers avoid questionable workers' compensation claims.


Typical Performance Review Mistakes

When SESCO audits clients, one of the primary focuses of the process includes reviewing personnel files including performance evaluations and related coaching and disciplinary documentation. The following are five (5) typical mistakes that many managers make which can create not only employment liability such as an EEOC charge, but also reflects upon the manager's lack of understanding or inability to manage the organization's largest controllable cost — purchased behavior (compensation). Managers need to avoid the following:

1. Employees are surprised by the performance review and thus do not agree and do not sign the performance review. Performance appraisals never should be a surprise. They are only a summary of conversations employees have already heard throughout the previous evaluation period. Unpleasant surprises indicate that managers are not being candid or coaching and counseling employees effectively. Thus, mediocre behavior is allowed to hang around and is simply at an extra cost the employer cannot absorb and also creates morale issues with other high performing employees.

2. Performance reviews are not consistent from one department to the next. Although it is inappropriate to apply a "Bell Curve" to an employee's performance, it is also inappropriate to rate employees at the same level. Many supervisors avoid potential conflict and thus rate all of their employees the same. It is an indication that managers need training when conducting performance reviews when there are significant discrepancies/rating styles between departments. Again, these discrepancies and inconsistencies create employment law liability as well as create additional labor costs and morale issues.

3. Employees don't receive great ratings. Some managers feel as if employees don't deserve higher ratings. Managers feel that the employees are simply performing the job duties as assigned. Good or great employees should be rewarded and their performance reviews should reflect where they are exceeding. Additionally, these employees need to be rewarded both through psychic compensation (making them feel appreciated) as well as in higher percent increases.

4. Employees who are dismissed have recently received excellent appraisals. This is a very common issue that our audit process uncovers. Managers avoid truthful performance reviews for whatever reason and then within the next weeks or months, the employee is terminated. This is a significant EEO issue in that performance reviews will be a matter of a position statement in responding to an EEOC charge. If the performance rating is as expected or higher or does not address the performance issue that the employee was terminated, then the employer will have an up hill battle in defending the termination.

5. Productivity generally goes down during appraisal time. The purpose of performance reviews is to increase productivity and ensure that you are receiving an equitable return on this expense. Any process that is not contributing to that goal should not be continued. If your system is not ensuring that your labor costs are in line with productivity, then it is time to change or revise the system. More likely than not, it is an issue where managers do not understand their primary responsibility of managing labor expense/cost to productivity. Training managers and supervisors on the importance of managing purchased behavior (compensation) and then subsequently how to conduct effective performance reviews is critical to any organization's success.

Manager's Assessment:

How Well Do I Conduct Performance Reviews?

1. I address performance problems openly, without window dressing. Yes __ No __

2. I illustrate problems with specific examples. Yes__ No__

3. I focus the discussion on results desired from the employee's efforts. Yes__ No__

4. I give employees an opportunity to respond to problems addressed. Yes__No__

5. I present and discuss an improvement plan for each problem identified. Yes__No__

6. I help the employee set specific, realistic improvement goals, according to a reasonable timetable. Yes__ No__

7. I help provide the employee with resources necessary to improve. Yes__No__

8. I communicate, through words and action, my faith in the employee's ability to improve. Yes__No__

9. I commit to assisting the employee in any way necessary to improve. Yes__ No__

10. I reduce to writing verbal correction and coaching conversations. Yes__No__

11. I properly document behavioral and performance issues to the employee's personnel file. Yes__No__

12. I follow-up with employees following a coaching or counseling session. Yes__No__

13. My performance reviews are consistent and accurate with the previous review period. Yes__ No__


Avoid Phrases That Can Sabotage Job-Review Meetings

When you talk with employees about their performance reviews, beware of using common phrases that can unintentionally communicate the wrong message, or come across as too negative or personal.

Certain phrases can kill employee morale, weaken productivity or open up the organization to a discrimination lawsuit.

Your goal is to deliver reviews that help shape employees' performance without becoming sidetracked by anger, emotion or fear of conflict. To do so, avoid the following phrases:

"You're wrong."
If an employee tries to explain why his or her job rating should have been higher, don't slap back with, "You're wrong." That will only trigger anger and more confrontation. Instead, turn back to your documented facts of the employee's performance and say, "I know you disagree, but I believe this evaluation accurately reflects your performance."

"What was your problem?" Don't use the question as a way to ask why an employee had difficulty completing a project or task. Employees will bristle at such a statement. Instead, say, "What were the conditions from your perspective that made if difficult for you to complete the task?"

"You really did a great job but..." Whatever comes after the "but" negates the preceding compliment. Don't directly connect praise with constructive criticism. Instead, say, "On the other hand, you can do even better by making these improvements." Then cite them specifically.

"I understand." This phrase can excuse unacceptable performance or behavior by conveying empathy. Avoid it when possible.

"Your position here is solid so long as you keep up the good work." You may intend such statements to encourage good performance, but they're legally dangerous because they imply an employment contract that a court could find binding. That limits the organization's ability ever to fire the person.

SESCO's performance management training system addresses these don'ts as well as a how to conduct an effective performance review.


SESCO Client Feedback

"Bill provided very professional and prompt service. SESCO is an excellent company to work with and their training is first rate." ~ A. Brian McCoy — Ramey Chevrolet

"Jamie is always very thorough with everything she presents. We love Jamie and consider her part of our staff. SESCO is a great organization." ~ Larry Arnaudet, Executive Director — Exhibition Services and Contractors Association

"Jamie got to the point and minimized effort on our part which freed us to concentrate on other matters. SESCO is an excellent firm to do business with. I would recommend them to anyone." ~ Glenda McMurtrie, Human Resources — Southeastern Virginia Health System

Special Thanks to New SESCO Clients!

Cornerstone Detention Center
Madison, AL

Blue Sky Hospitality
Jonesborough, TN

Misiuk Funeral Home
Chesaning, MI

Toyota of Bristol
Bristol, TN

Patriot Mechanical Corp
Ashland, VA

Southern Hospitality Automotive Group
Chesapeake, VA


SESCO Client Inquiry — Staff Response

Question: What actions can an employer take to stop employees from gossiping?

Answer: Casual gossip is inherent in the culture of many companies and, for as long as people work together, employers will have to deal with gossip. But at its worst, gossip involves vicious rumors that create animosity among co-workers and disruptions in the workforce. Realistically speaking, an employer never can put a complete stop to workplace gossip. But what employees discuss on company time has a direct impact on what they produce and how they produce it. Therefore, employers can attempt to combat the problem by taking measures such as the following:

Educate your employees. If they understand how damaging gossip can be and what it costs them and the company, employees may be less inclined to spend time spreading gossip. If the gossip mill can produce juicy tidbits about someone else, it can just as easily target them next time.

Challenge employees through meaningful work. Individuals challenged by their jobs will have less time to participate in idle gossip.

Inform employees that malicious personal gossip will not be tolerated. Employees should be informed of how damaging it is to partake in such gossip.

Confront repeat offenders and take action. Managers should address problems during an offender's performance evaluation or by counseling him or her at the time the problem occurs or persists.


SESCO's Fall Seminar Series 2014

Bristol, VA

October 8-9, 2014
Human Resources -
The Basic Course
Courtyard by Marriott

November 6, 2014
Human Resources -
The Advanced Course
Courtyard by Marriott

Richmond, VA

October 8-9, 2014
Human Resources -
The Basic Course
Virginia Community Healthcare Association

November 13, 2014
Human Resources -
The Advanced Course
Virginia Community Healthcare Association

(SESCO has partnered with one of our valued clients, Virginia Community Healthcare Association, to host our Richmond Seminar Series.)

Visit our website at www.sescomgt.com

State and National Business and Trade Associations, Chambers of Commerce and Human Resource Associations are welcome to contact SESCO to book a professional speaker for annual conventions and seminars. Contact Bill Ford at 423-764-4127 or by email bill@sescomgt.com.