The Effect of Teams on the Economic Welfare of Injured Workers Karen Roberts MSU SLIR

Using a merged dataset from two employee surveys, one employer survey, and state agency earnings data, this study examines the effect of autonomous, nonautonomous and traditional work organization on lost earnings, the likelihood of not missing work after the injury, and the ability to return to work conditional on missing work. The results show that both types of team-based work reduce injured worker ability to stay on the job or to return to work. Possible mediation effects of product market conditions and supporting HR polices are examined and results support for product market and selected HR policy mediation effects. Welfare of Injured Workers 3 The Effect of Teams on the Economic Welfare of Injured Workers Karen Roberts, Kyoko Kato, Karen S. Markel Every year, one out of twenty workers in the U.S. labor force experiences a workrelated injury, approximately one-third of which involve time away from work (Occupational Safety and Health Administration, 2004). The costs of these injuries are high for both employers and employees. According to the National Academy of Social Science, employers spent $72 billion on workers’ compensation insurance in 2002, while the value of lost production due to work-related injury is approximately $156.2 billion (Williams, Reno, & Burton, 2004; National Safety Council, 2004). One way to reduce these costs is to accommodate injured workers on the job in order to help them miss as little work as possible (Williams, Reno, & Burton, 2004). A fundamental premise of workplace disability management is that disability cannot be adequately understood in terms of physical or mental limitations that reside within the individual. Rather, a full understanding requires examination of the work environment and the intersection of the demands of the job and the abilities of the individual. Consequently, how work is organized is one of the necessary pieces to determining whether an injured worker can return to work or remain on the job after injury (Shaw & Feuerstein, 2004). The purpose of this article is to examine the effect of team-based work organization on outcomes for employees who become injured at work. The research on the effect of team organization on workers is somewhat less well studied and, as the discussion below suggests, provides conflicting results (Godard, 2001). There are several explanations for why the effects of teams on worker welfare may be ambiguous. One is that teams can differ in their orientation and how they are managed and these differences are likely to have implications for employee welfare (Godard & Delaney, 2000; Appelbaum & Batt, 1994). Another explanation is that how employees experience teams depends on what HR policies and practices are implemented in support of team functioning in the workplace (Hunter, Macduffie, & Doucet, 2002). A priori, the effect of team-based work organization on injured workers is ambiguous. Arguably, a team-based structure can be beneficial for injured workers as control over work is thought to be pushed down to the worker level, so that working in a team could give injured workers the opportunity to modify their work environment as necessary (Kochan, Katz, & McKersie, 1986). Alternatively, teams imply tighter 4 The Effect of Teams on the Economic integration with other workers than is the case with traditional work structures and thus put a greater onus on injured workers to conform to a specific structure of work, which might prevent injured workers from being able to perform their jobs (Appelbaum, Bailey, Berg, and Kalleberg, 2000). Additionally, if teams are implemented along with a just-in-time strategy, it is also possible that the pace of work may prevent injured workers from staying on the job or returning to work (Godard, 2001). In this paper, we examine three outcomes as indicators of injured employee welfare: whether the individual missed work as a result of the injury, lost earnings due to the injury, and, conditioning on having missed work, whether or not the individual eventually was able to return to work. The analysis is of manufacturing workers who have been identified by health care providers as having experienced a work-related repetitive injury to the back, hand/wrist or shoulder. Using a dataset that includes data from a two-wave survey of injured worker, merged with data from a single-wave survey of their employers and individual earnings records from the state employment security agency, we examine the effect of three types of work organization: traditional, autonomous teams, and non-autonomous teams. The analysis includes an examination of other factors that are likely to affect the success of teams, including the use of HR policies and practices in support of teams, the nature of the product market, and individual job characteristics. The next sections of the paper discusses the previous research and lays out the analytical framework. This is followed by a description of the data used in the analysis. The research methods and results are in the following section. The paper concludes with a discussion of the implications of this research. Literature Review and Conceptual Framework Over the past decade, considerable attention has been given to what has been called the transformation of work, particularly within manufacturing (Appelbaum, et al, 2000). The thrust of this transformation has been away from assembly-line systems associated with mass production toward a variety of work systems designed to accommodate to changing product market conditions. These work systems are based on a variety of models of work organization initially developed outside of the United States, but which have been adapted to suit U.S. culture and practices (Appelbaum & Batt, 1994; Doeringer, Evans-Klock & Terkla, 1998). Godard and Delaney (2000) refer to the class of new work systems as a new industrial relations paradigm and note that it encompasses a wide range of HR practices and work structures.