1997 RISK MANAGEMENT HONOR ROLL: THREE DEPARTMENTS WORK TO KEEP SRP HIGH ON SAFETY, LOW ON COSTS

Three of Salt River Project's risk management units use creative ways to keep workers safe and injury free and reduce the utility's workers compensation costs.

The three-Security Services, Safety Services and Workers

Compensation Services-are among the six units that report to William R.

Powell's risk management department.

The 15-person security unit is responsible for everything from employment screening and fraud investigations to property and employee protection.

SRP patrol officers and investigators handle problems common to many employers and municipal police departments, explained Joe N. Smith Jr., manager of SRP's Security Services Division. SRP also contracts with a security service that provides another 150 patrol officers and personnel.

For employees traveling to foreign countries on company business, the security division provides them with U.S. State Department briefings and other information on crime and safety in the region. The unit will even do the same for employees planning personal vacations, said Mr. Smith.

The security unit also screens employees participating in projects outside of work.

For example, some of SRP's 4,500 employees participate in a company-sponsored mentor program at a local school for homeless children. SRP's security personnel screen the participants to eliminate anyone who might present a threat to children.

The mentor program screening is in addition to a background check that everyone under consideration for employment at SRP must undergo, Mr. Smith said. Additionally, employees in 200 sensitive positions are screened every five years. They include workers who sign contracts or handle cash at customer payment offices.

The bulk of workers comp claim prevention at SRP falls on the Safety Division.

Four safety and heath specialists maintain offices in the company's field hubs, giving them an intimate understanding of the potential hazards company employees face, said Donald J. Breiland, manager of Safety Services.

"We have a pulse on what goes on in the company because we are field-oriented," he explained. "We are a corporate resource and yet we are not isolated as a corporate resource."

The division's successes speak for themselves. In 1986, SRP employees filed 386 workers compensation claims. That number was reduced to 125 by 1996.

"It's not only the frequency of claims that is significant, but also the cost," said Mr. Powell. Workers comp costs per employee have dropped to about $60 in 1996 from nearly $350 in 1991.

There are a number of factors contributing to this success.

One is a monthly video newsletter, "Eye On Safety," that is sent to various units throughout the company. The eight-minute videos feature field employees discussing safety tips for work and home.

SRP also has a creative incentive pay plan that rewards employees for their safety record as well as other factors such as customer satisfaction.

SRP establishes a target rate of return it hopes to receive after expenses for each kilowatt hour of electricity it produces. Earnings above the target rate are then split equally between the company and employees. The amount individual employees receive is based on their base pay.

But employees risk losing part of their share if they do not meet safety goals for lost time accidents, OSHA recordable accidents and preventable automobile accidents. Each of the three components is worth 10% of the potential incentive pay.

SRP also controls the cost of claims that do occur.

Arizona law allows self-insured employers to direct the health care of injured workers. In 1991, when Mr. Powell became risk manager, he led the company's drive to take advantage of the law.

"That was a big factor in terms of cost containment when we finally exercised that right," Mr. Powell said.

SRP employees first see an in-house nurse who can refer them to primary care providers who contract directly with the company.

"They understand our return to work philosophy and they understand our modified duty program," said Gayle F. Siewert, SRP's workers comp administrator.

Under a modified duty program, supervisors who employ recovering workers are not charged for their pay. Once they are at 100% recovery, they return to their original departments.

Claims administration is handled by Alexsis Inc., which refers workers who need additional or special care to specialist doctors familiar with workers compensation. Alexsis also contracts for nurse case management.

The focus is on aggressive claims management and early intervention, Ms. Siewert said. All injuries are immediately reported to a risk management hot line, and then the information is quickly passed on to Alexsis and others within SRP who need to respond.

In addition to those tried and proven claims management practices, the workers comp services unit has embarked on a pilot program in cooperation with the Industrial Commission of Arizona. The program is helping a former meter reader with a back injury find a new career, while eliminating the company's potential exposure to $308,000 in wage loss benefits for the remainder of the employee's work years.

The worker attended drafting classes paid under SRP's tuition reimbursement program after a vocational rehabilitation counselor determined he had the aptitude and the physical ability for drafting and the employee expressed a strong interest in drafting.

A supervisor in SRP's drafting and mapping department was eager to provide additional training and hire the worker for a year while he develops the new skills, Ms. Siewert said. Meanwhile, the Industrial Commission is paying half the employee's wages for the year.

The worker is exceeding all expectations in his new role.

Ms. Siewert said she would implement a similar program for other workers under similar circumstances.