Metrics are a powerful tool for the achievement of excellence in safety and health management. The combination of leading and lagging indicators can provide an evaluation of current system operations and also a prediction of future performance.

This paper will discuss the use of metrics to help your organization reach a higher level of safety and health performance that includes:

  1. Developing measures based on validated hypotheses,

  2. Using a "Loss - Cost" sequence that provides a relationship between measurement and return on investment and

  3. Using the insight gained from these actions to establish a foundation for risk assessment at your organization.

It is interesting that most safety performance conversations end up being a discussion about frequency rates, severity rates and possibly disability rates. The problem with this perspective on safety performance is that these types of measures are lagging in nature. They talk more about what happened yesterday and may not be entirely consistent with what is happening today and what you can predict about tomorrow. The combination of these leading and lagging measures will provide a better prediction of future outcomes in that they balance what has occurred with the present and what is changing over time.

Loss-Cost Sequence

In the past, it has been common to focus more on Claims and their costs instead of identifying System Variance that poses Risk. Figure 1 shows the relationship between different elements that range from System Variance to Cost. Whether you call them discrepancies, differences or even deficiencies, all systems have some variance and it is that variance that creates risk.

Risk creates the opportunity for process failures or deviations from what would have been done under ideal circumstances. It is these deviations that result in incidents and incidents cause harm, claims and incurred costs.

From a safety perspective, the further upstream the intervention strategy, the greater the return on investment. Although it is more difficult to measure, the more productive the measurement will be.

Conversely, the further downstream the strategy, the more easily the effects can be measured; however, the less effective the intervention will be at resolving the source of the issue. One example involves providing first aid after an injury occurs compared to performing risk assessments to identify and reduce risk upstream. Bottom line, systems are the key to understanding the potential for loss and therefore the prediction of loss.

Figure 1. Loss-Cost Sequence (available in full paper).

In order to be better able to identify and measure system variance and risk, a predictive and prescriptive approach was developed. The following discusses this process:

  • It begins with hypothetical relationships between what can be done and what might be achieved

  • Requires development of diagnostic tools to assess situations and gather data

  • Draws on identifying trends in the data gathered to test the hypotheses

  • Depends on prescriptive actions that affect situations

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