Simplifying X-Mod

A company’s X-Mod is the insurance industry’s way to adjust the premium to fit the risk. When two companies in the same business, with roughly the same payroll, have different safety records, the X-Mod (experience modifier) allows the safer company to pay less, while the company with more injuries pays more.

A company’s basic premium is simply the payroll multiplied by the rate assigned to the job classification. In California there are approximately 500 different rate classifications, and the historical risk determines the rate. For example, clerical workers have far fewer injuries than machine shop workers, so the rate for machine shops is about ten times higher. The important thing to remember is this: you can’t do anything about it. Your business determines your classification, and your payroll is what it is.

Now comes the part you can control. Your basic premium is now multiplied by your X-Mod. Depending on your safety record, the mod is adjusted up or down. If your injury record is higher than the average for your industry, your X-Mod is greater than 1.0; conversely, a better than average safety record adjusts your X-Mod lower than 1.0. So Company A, with 12 injuries/year, sees their X-Mod adjusted up to 1.50, while Company B, with 4 injuries/year, has their mod adjusted down to .75. The result is that Company A’s workers’ comp premium is double Company B’s.

What Can You Do?

Every recordable claim increases your X-Mod for three full years. If you don’t want to be the company paying twice as much as your competitor, you must minimize your injuries. Make sure all the basics are in place: safe workplace, OSHA compliance, good training. Then focus on behavior and attitude, because 90% of injuries are the result of behavior.

What Can We Do for You?

Our Safety Achievement Program changes the way workers view safety. We customize a program and lead monthly safety meetings that provide recognition, motivation and appreciation. They encourage teamwork and personal responsibility, and most importantly, they get results. For more than 10 years we have been helping companies lower their X-Mod and save money, while becoming better and safer companies. Contact us for a no charge evaluation of your current safety program, including our estimate of the potential for X-Mod reduction.


Lack of Engaged Workers in Your Safety Program Can be Costly

Last week I had the pleasure of delivering the keynote address at the annual EHS Summit of the Manufacturers Association for Plastics Processor in Jackson, TN. The theme was Safety Culture, with an emphasis on BBS (behavior based safety).

With workers’ comp rates rising everywhere, there is a renewed thirst for solutions to the costly problem of worker injuries. The bad news is that every injury adds points to the X-Mod that must be carried and paid for, for three full years. The good news is that in the vast majority of cases, injuries are completely avoidable and can be eliminated.

Let’s start there. Eliminating injuries is as simple as changing the behavior of the workforce, because 90% of injuries are the result of decisions that workers make – unsafe, careless, or fraudulent. Only about 10% of injuries are the result of an unsafe workplace. So the goal of any company should be to influence the people who work for it in a positive way; to take safety more seriously, and to make it a higher priority. In order to do that, workers must be engaged and involved in the company’s safety program. They must see the benefit to doing their job the right way and never taking shortcuts.

Behavior that gets rewarded gets repeated. Safety meetings that offer rewards for doing the right thing, whether in the form of recognition and appreciation, or monetary, have an impact on behavior. Sometimes a simple handshake and “Thank You” from the boss is all it takes to improve an attitude. People want to be acknowledged and recognized for doing the right thing, and there is no more important “right thing” than being safe. To reduce injuries and claims of all types, get your workers engaged by providing recognition and rewards. Fewer injuries mean everyone wins.

To learn more, visit us at

Real Cost of Injuries

I have been recently engaged in on-line discussions about the cost of injuries. I continue to be surprised at the number of people who think the cost is determined by what the clinic charges, so that a minor injury may appear to cost the employer less than $1000.

Stop it! That is completely wrong. Unless the company has a form of self insurance, the actual clinic charge is irrelevant. The insurance company pays that. The only calculation that matters is the number of points that the injury adds to the employer’s X-Mod.

Every injury adds points, and every point adjusts the base premium higher-for 3 full years! For manufacturing companies in California, the average injury ultimately costs more than $15,000 in higher premium. Add to that number the so-called “soft costs” related to replacement, loss of productivity, overtime, etc, and that total cost likely doubles.

Here is the good news: every injury that is prevented saves $30,000. A stronger safety culture is the key to safer behavior and fewer injuries.

Injuries Can Have Positive Consequences

Not all consequences are bad, even when we are talking about injuries.

Yes, it is true that every injury in a manufacturing environment adds a whopping $15,000 to the premium, on average, and it is also true that every injury has the potential to explode into a nightmare of litigation. However, every injury also provides an opportunity to prosper.

Since the vast majority of injuries are avoidable, we know that the decisions workers make determine the company’s injury record. The way employers choose to influence those decisions is a key to their safety culture. One of the most important ways to influence behavior is to show the consequences of unsafe or careless behavior.

Our advice is to discuss every injury; bring them out in the open.

By discussing every injury in front of the entire workforce, the employer accomplishes several things:

  1. He lets everyone know that unsafe behavior won’t happen in a vacuum.
  2. By discussing, and in some cases recreating how the injury occurred, the employer turns it into a teaching lesson. The reality that an injury occurred makes that discussion more meaningful than a “what if” scenario.
  3. By soliciting answers to the question “How could this have been prevented”, the employer creates the opportunity for discussion and engagement. Engagement is one of the most important  components to a strong safety culture.
  4. By not ever mentioning the name of the injured worker, the employer demonstrates integrity.

In our safety achievement programs, we add an extra level of consequence. Only members of injury-free teams are eligible for awards and recognition, creating a positive peer pressure to perform each job safely. That kind of internal encouragement is a powerful tool in establishing a stronger safety culture.


About the author: Joe Stevens founded Bridge Safety Consultants in 2003 to provide companies and organizations with a resource to help them focus on their safety culture. The company conducts a safety culture audit, then designs and manages safety recognition and rewards program, with bilingual monthly safety meetings. Mr. Stevens can be contacted at:, and followed on Twitter @safety_experts.

To see a typical meeting in action, visit their website:

Make Safety Personal

Are you more likely to return to a restaurant where the owner recognizes you, always says hello and occasionally sends over a dessert or glass of wine, or one where your only interaction is with the waiter?

How does that scenario relate to safety? Are you more likely to take safety more personally if you receive recognition, appreciation and occasional rewards, and you are shown appreciation- or one where safety meetings are routine?

The more personal a company can make safety to every employee, the better chance that employee will take greater personal responsibility for his behavior. That’s a key component to a strong safety culture.

How To Make It More Personal

To make your safety meetings more personal, keep your focus on engagement, and think of ways to create interaction and participation. Awards and recognition for achievement to both teams and individuals are the centerpiece, but there are also opportunities to simply verbally recognize contributions on a variety of safety related matters. Shout-Outs and handshakes go a long way towards promoting a positive attitude.

The value of making safety more personal is felt in both the financial area as well as in the morale of the workforce. Nothing is more basic to the attitude that employees have about the company they work for, than their perception of how much the company cares about their personal safety.

Safety Doesn’t Have to Be Boring

If you were forced to watch the same movie over and over again, would you find that stimulating, or tedious and boring? Imagine workers having to listen to the same safety training, year after year after year. And we wonder why they are tuned out from the minute the training begins?

It’s time to rethink your approach to safety.

Start with your goals, which should be to impart information that your workers will take on board so that they will perform their jobs correctly and safely. Safety information which leads to injury prevention is too important to be delivered in the same boring way, year after year.

I have three basic rules for safety training:

  1. It must have participation. Attendees pay attention when they know they may be called on to demonstrate, answer questions, or be otherwise involved.
  2. The training must have a bilingual speaker, not a translator. The trainer must be able to go back and forth for a workforce that is often not fluent in English. Delivering training in English is a guaranteed way to assure a high tune out ratio.
  3. Keep it short. Attention span on a serious subject is short, so get the main points in and don’t be redundant.

Consider Humor

The unique element that we add to every training is humor. If this sounds paradoxical to the serious subject of safety, consider this: The most effective ads are built on humor, regardless of the seriousness of the subject. Why? Because people are more likely to notice the ad, to listen to the ad’s message, and to remember the product. It’s no different with safety training. If you can inject humor your audience is more likely to be engaged and that’s the key. We had one training on hand safety where our trainer invited a comedian known as “Balloon Boy”. He inflated a glove and put himself inside it! The act was hilarious, and you can be sure that every day when the workers put on their gloves, they thought of that training.

Every training we do follows those basic rules, and adds humor. If your training tends to be boring, give us a chance to show you how to change that. A short video on our website will give you an example.

Arbonne Chatsworth

Why OSHA is Wrong About Safety Incentive Programs

Recently, OSHA sent a bulletin out that cautioned employers about the use of safety incentive programs, based on the concern that injuries may go unreported, either due to peer pressure, or the overriding desire of a worker to win an award.

OSHA is wrong to take that position without any caveats, because the positive effects of a comprehensive safety incentive program far outweigh the negatives.

The first mistake OSHA makes is in suggesting that rewarding teams for safe performance is “discriminatory” against teams or departments with injuries. Since when is it discriminatory to reward good performance? Should all salesmen earn the same commission because it is discriminatory against those who sell less? Should successful managers be denied raises or promotions because it discriminates against those managers that did not perform as well?

The second fallacy in OSHA’s position is that workers are easily dissuaded from reporting legitimate injuries. They give little credit to the intelligence, common sense or credibility of workers. In our experience of running safety incentive programs for almost ten years, an injured worker wants treatment for an injury, and that is by far his primary concern.

Compare OSHA’s attempts to discourage the use of incentive programs with the benefits. The purpose of a good plan is to raise awareness of safe behavior, provide encouragement and motivation to exercise caution and perform the jobs safely, and convey the message of how important the worker’s individual safety is to the company. When an organization shows that they care about safety, workers take it more seriously. The attitude that workers have about safety is often a direct reflection of the attitude they think the company has about safety. Our interactive monthly safety awards meetings are always attended by managers who congratulate and thank winning teams and individuals for being safe. That kind of recognition, appreciation and reward strongly reinforces the importance of safety. The awards and recognition are both important components, because they are earned.

Maybe OSHA is only thinking about simplistic programs like “bingo”, but if so, they need to investigate the wonderful, positive results that are being achieved by robust, interactive programs before they taint all safety incentive programs with their broad brush of negativity.

Finally, OSHA completely ignores the benefits of injuries that do not ever happen, thanks to motivational incentive programs. If their premise were true, and an occasional minor injury did go unreported, but ten injuries never occurred thanks to greater awareness, would that justify their position? The goal of our program is to strengthen the whole safety culture by demonstrating how important safety is. Preventing injuries from ever happening is the best possible outcome, and strong, comprehensive safety incentive / achievement programs help companies and organizations achieve that outcome.

Appreciation and Safety– They’re Connected

Do you know the most common reason that people quit their jobs and go to work for another company? It’s not money, it’s not the commute, and it’s not because they don’t like the work. It’s because they don’t feel appreciated.

Feeling appreciated for who we are and the contributions that we make are central to our well being. Think about how you feel when you make an extra effort for someone- especially if it’s an inconvenience for you- but you receive no acknowledgement. It minimizes our contributions and our expertise when there is a lack of appreciation.

In an office environment, recognizing people for their efforts is an easy part of managing people, and can be done on a one on one basis, but how can you show appreciation in an industrial setting where dozens, or even hundreds of people are diligently going about their jobs, performing tasks as required every day? Often they have to make decisions on the spot that affect both quality and timeliness. Every day they have to make decisions regarding safety.  As a manager, how do you get the message across to large groups of people that you appreciate them, that you appreciate the work that they are doing for the company, and that you appreciate that they are performing their jobs safely?

A safety incentive program that is built on monthly meetings that engage your workers is the answer. Done right, a safety incentive program gives management an opportunity to express their appreciation, provide recognition, and reward performance. There is nothing as important as the safety of the people performing the most physically challenging jobs, but because every company makes statements like that, words do little to distinguish the employers who really care. Instead, holding dynamic, interactive meetings where safe performance is acknowledged and applauded demonstrates that you recognize their efforts, and that you appreciate their results. Giving awards and recognition to individuals and departments for making safety their priority encourages everyone to make safety a higher priority. Safety Cultures develop when workers feel appreciated, and holding monthly safety incentive meetings provides the perfect opportunity to do so. When workers feel appreciated, the results are fewer injuries, better morale, and greater productivity. That’s a Win-Win-Win.

Peer Pressure: Turning a Negative into a Positive

We all tend to think of peer pressure in negative terms. We have seen how the influence of a few disgruntled workers with bad attitudes can poison a whole workforce and jeopardize a company’s best efforts to maintain an injury-free environment. If the situation isn’t turned around quickly, the whole safety culture suffers, and careless and unsafe behavior are seen as acceptable.

It doesn’t have to be that way. With a little effort in the right direction, companies and organizations can establish a different culture, one that encourages responsibility, discourages risky behavior, and engenders pride in performance.

Every company has loyal employees who perform their jobs the right way and observe all the safety requirements. They come to work every day expecting to be safe, and knowing that they must observe all the safety rules in order to do so. But every company must also acknowledge that they have workers who are less dedicated, and are more likely to be careless. If those fellow workers routinely take shortcuts or take chances that put them at risk, they are leading by example, in the wrong direction. Call it negative peer pressure.

So the question becomes how to turn that around?

The first step is to neutralize the influence of the slackers; the second step is to put the peer pressure in the hands of the first group, those loyal employees who understand and value safety. It’s easier than you think, because most employees want to be safe, and know that taking unnecessary risks put them in danger. The key is to empower the majority, and give them some clout. Call it positive peer pressure.

We all value teamwork, and the results that it produces, but did you realize that the central component of teamwork is actually peer pressure? The positive influence that group members exert on each other to do the job the right way is the very essence of positive peer pressure. Encouragement, suggestions, assistance and advice are all forms of positive peer pressure. How can you empower this group? Start by creating an accountability system that recognizes workers for the performance of their team or department. When you reward individuals for their contribution to the whole team, either through recognition or awards, or both, you also tell them that they are part of something bigger, and thus have a responsibility to more than themselves. Careless or unsafe behavior puts the whole group at risk. Conversely, safe behavior has a payoff, so encouragement and assistance to a fellow worker is legitimized.

Consider incentive programs that recognize teams and departments for staying safe. Giving gift cards or money shows that there is a tangible reward for doing the right thing. Just as important is giving recognition. Newsletter articles, congratulations from upper management in front of all employees, and pictures that are prominently displayed all reinforce the value of safety, and encourage safe behavior.

Turning peer pressure into a positive can turn your safety culture into a strength of the company, reducing injuries and saving a great deal on workers’ comp costs.


Workers’ Comp Craziness

Every now and then a decision comes down that makes you scratch your head and wonder if the workers’ comp system is set up to protect workers and employers, or for amusement purposes. Two such cases have recently been adjudicated.

In the first, a woman, travelling on business, was injured when an overhead light fell on her, causing a bump on her head, and a slight laceration. It’s how it happened that is interesting. The light was knocked askew and off its anchor during sex in the woman’s hotel room. The judge ruled that sex is a normal course of behavior when travelling on business, just as ordering a meal or working at a computer would be. Under that definition, the injury was compensable. The company plans to appeal.

The second case has wider ramifications. In Illinois, State employees whose jobs require them to walk and climb stairs can claim “repetitive walking” as an injury. A March 20 decision by the Illinois Workers’ Compensation Commission, an appeals panel, upheld a Menard Correctional Center guard’s claim that walking prison tiers several miles per day for more than a decade injured his Achilles tendon. The guard is seeking a disability settlement after undergoing foot surgery that cost taxpayers $62,062. He has also been paid $11,146 for time off to recover.

Want more? The  maximum security prison was the source of at least 230 repetitive trauma claims resulting in more than $10 million in disability settlements, mostly to guards, who claimed they injured their hands and elbows by turning keys and operating locking systems.

It kind of leaves you speechless, doesn’t it?