III. HUMAN RESOURCES AND INTERNATIONAL SECTIONS
REFEREED PAPERS

Injured Workers and Lost Time:
Do High-Performance Workplace Practices Make a Difference?

KAREN S. MARKEL
Oakland University

KAREN ROBERTS
Michigan State University

Abstract

      This paper examines the effect of high-performance workplace practices on the likelihood to lose time from work or file a lost time workers compensation claim due to a workplace injury. Data have been collected from both a random sample of injured workers (over two time periods) and their employers. Sample size is approximately 1,058 workers. High-performance workplace practices include the presence of workplace committees, recruitment practices, employee control over their work, the presence of teams and several types of incentive pay systems. Results reveal that several high-performance workplace practices do predict the likelihood that injured workers will lose time from work.

 

Innovative work practices are receiving a great deal of attention both in the workplace and by researchers. These workplace practices, often referred to as high-performance or high-involvement, are characterized to both encourage worker participation in the organization as well as increase their autonomy over their own work and productivity. Often these practices include the design of work into a team-based organization or one with various committees, increased training, and/or recruiting a workforce open to new ideas and interested in taking responsibility for their own and/or their team's work.

      New types of incentive pay systems are also on the increase in these types of organizations. For example, as more and more work activities are carried out in teams, it becomes harder to monitor the effort of individual workers. By making the compensation system contingent on the contributions or effectiveness of individual workers or work teams, employees will be more likely to engage in improving the work system and overall firm productivity (Pil and MacDuffie 1996). These pay systems are often characterized by their ability to reward workers both for their own or their team's contribution to productivity. These systems seek to reward employees in relation to overall firm productivity in order to increase employee involvement and commitment to the organization. Examples of these types of incentive programs include team-based, knowledge-based or merit-based pay that typically allocate a percentage of the pay in relation to a measure of team productivity, knowledge of the job, or effort, respectively.

      These new workplace practices are designed to elicit the discretionary effort often untapped in traditional organizations (Appelbaum, Bailey, Berg, and Kalleberg 2000). Many studies have shown that high-performance workplaces are performing at greater capacity than traditional organizations (e.g., Appelbaum et al. 2000; Ichniowski, Shaw, and Prennushi 1997). One plausible outcome of the typically increased work pace and production "uptime" associated with high-performance work practices is higher injury rates. There has been some evidence that these high-involvement workplace practices and incentive systems are associated with higher rates of cumulative trauma disorders (CTDs) in manufacturing organizations (e.g., Adler, Goldoftas, and Levine 1997; Brenner, Fairris, and Ruser 2000; Fairris and Brenner 2001). Cumulative trauma disorders are conditions such as carpal tunnel syndrome, which originate in repeated pressures, vibration, or motion. The case study research in this area, most often conducted at automobile manufacturing plants, has established a link between increased rates of CTDs at high-performance workplaces, most often attributed to the increased work pace at these organizations (e.g., Adler et al. 1997). As Rinehart (1999) surmises, these high involvement workplace practices are implemented at the discretionary cost to the worker: "The true buffers in this system are workers." To date, the research on the relationship between high-involvement workplace practices and worker injury has concentrated on injury rates. The research reported here examines the relation between high-involvement workplace practices and the likelihood that a worker loses work time due to his or her workplace injury.

      The expectation is that the likelihood of increased work time is greater in high-performance workplaces. The high-involvement work organization is designed to create a cooperative work environment with strong employee commitment to both their peers and the organization. Once an injured worker cannot be fully productive, absenteeism is more likely because the worker cannot unleash the discretionary extra effort expected under a high-performance work regime. Further, if the production process is team-based, other team members are likely to discourage the return of a less than fully productive team member. The following hypothesis will test this relationship: High-performance work practices will be positively related to the likelihood of losing time from work.

      Incentive pay systems may have the opposite relation to the likelihood to lose time from the workplace due to relation to overall compensation. These rewards may create competitiveness among employees (Randall 1999), and injured employees may be more likely to remain at work in order to reap these monetary rewards. The following hypothesis will test this relationship: incentive pay systems will be negatively related to the likelihood of losing time.

Data and Methods

      The data used in this paper is from a study of work-related illness and injury in the state of Michigan. The purpose of the study was to investigate the determinants of the decision to file a workers' compensation claim and the social, economic, and work-related consequences of filing. The data were collected from individuals with work-related injuries or illnesses and their employers. Michigan statute requires health care providers to report work-related injuries or illnesses to the state Department of Consumer and Industry Services.

      Two waves of data were collected from individuals in a telephone survey. The first wave of data collected for individuals resulted in 1,599 respondents (response rate of 70.4 percent). The second data collection occurred 1 year after wave one. The response rate for wave two was 69.9 percent so that the total sample size with two waves of data was 1,118. An employer survey was distributed to organizations that employed an injured worker from wave 1 of our study. Fifty employers responded (response rate of 87 percent). The survey included questions on the organization of work, human resource management practices, disability management practices, and basic workplace characteristics. Each individual respondent was matched with the respective employer characteristics for this research. Sixty observations were removed for individuals who reported working for a different employer at each wave, resulting in a total sample of 1,058 individuals.

      Sample descriptives and measures included in this study are detailed in Table 1. We controlled for the following individual characteristics: sex, age, race, education, and level of injury impairment. Organizational high-performance work practices included: the presence of workplace committees, recruitment practices, worker control over their work, and the presence of teams. Incentive pay systems included: knowledge-based pay, merit-based pay, team-based pay, and stock-based pay. These variables were regressed on two measures of lost time: absence from work and filing a lost time workers' compensation claim. Logistic regression was used to examine the hypothesized relations. For all analyses, the standard errors for each equation were adjusted for clustering on company ID. The standard errors accounted for the shared variance among workers within the same company.

Results and Discussion

      Several models were estimated to test the hypotheses both for experiencing lost-time or filing a lost-time claim. (See Tables 2 and 3, respectively.) The most important covariate included in estimating these models was injury severity, which retained a highly significant and positive relationship to both the likelihood of losing time and filing a lost-time claim.

      Table 2 presents the results for the relations of these workplace practices on the likelihood of losing time. As hypothesized, several of the high-performance workplace practices are significantly and positively related to the likelihood of lost time. The presence of committees, teams and specific knowledge skills and abilities in recruiting were all associated with increased likelihood to lose time.

      Because incentive pay systems are less likely to be implemented together, separate models were estimated to test these relations while controlling for both the covariates and high-performance work practices. Only merit-based pay was significantly related to the likelihood to lose time. Workers in organizations with merit-based pay are less likely to lose time from work due to their injury. However, it is interesting to note that after including measures of incentive pay systems in these models, the presence of committees and, in two cases, recruitment, remained significant.

      Table 3 presents the results for the relations of these workplace practices on the likelihood to file a lost-time workers' compensation claim. Although the results for the high-performance workplace practices are similar to those for the likelihood to lost time, none of the incentive pay systems are significantly related to filing a lost-time workers' compensation claim.

      This research is the first study to examine the relation between high-performance work practices, incentive pay systems and lost time among injured workers. While both previous research and organizations have espoused the productivity gains of these practices, the costs in terms of increased injury or losses due to injury are just beginning to be examined. This research found that organizations with high-performance work practices such as teams, committees and recruiting for specific knowledge, skills and abilities are related to the likelihood of both lost time from the injury as well as the filing of a lost- time workers' compensation claim. This lost time is costly to the organization and its overall productivity, and the experiences of injured workers should be considered in light of any efficiency gains.

      The lack of findings between the presence of incentive pay systems and both types of lost time should be tested in future research. Injured workers or those losing time from a workplace injury may alter their eligibility to receive these types of incentive pay, and studies which capture that information may provide insight into why these practices might not be related to the likelihood of losing time, especially after accounting for the presence of high-involvement work practices.

Acknowledgments

      This work was supported by the National Institute for Occupational Safety and Health. The authors would like to thank the other researchers funded by this grant as well as participants at the Workers' Compensation Research Group meeting, where a previous draft of this paper was presented.

References

Appelbaum, Eileen, Peter Berg, Thomas Bailey, and Arne L. Kalleberg. 2000. Manufacturing Advantage: Why High-Performance Work Systems Pay Off. Ithaca, NY: Cornell University.

Adler, Paul S., Barbara Goldoftas, and David L. Levine. 1997. "Ergonomics, Employee Involvement, and the Toyota Production System: A Case Study of Nummi's 1993 Model Introduction." Industrial and Labor Relations Review, Vol. 50, no. 3, pp. 416-37.

Brenner, Mark D., David Fairris, and John Ruser. 2000. "'Flexible' Work Practices and Occupational Safety and Health: Exploring the Relationship between Cumulative Trauma Disorders and Workplace Transformation." Unpublished paper.

Fairris, David, and Mark Brenner. 2001. "Workplace Transformation and the Rise of Cumulative Trauma Disorders: Is There a Connection?" Journal of Labor Research, Vol. 22, no. 2, pp. 15-28.

Ichniowski, Casey, Kathryn Shaw, and Giovanna Prennushi. 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines." American Economic Review, Vol. 87, no. 3, pp. 291-313.

Pil, Frits K., and John Paul MacDuffie. 1996. "The Adoption of High-Involvement Work Practices." Industrial Relations, Vol. 35, no. 3, pp. 423-55.

Rinehart, James. 1999. "The International Motor Vehicle Program's Lean Production Benchmark: A Critique." Monthly Review (January), pp. 19-27.