Experience Modification Rating: Understanding the Value & Limitations
- Russell M. Clayton (Sunroc Corp.)
- Document ID
- American Society of Safety Engineers
- Professional Safety
- Publication Date
- November 2016
- Document Type
- Journal Paper
- 40 - 43
- 2016. American Society of Safety Engineers
- 0 in the last 30 days
- 14 since 2007
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- By better understanding the experience modification rating, OSH professionals can advocate for meaningful metrics that provide vision to an organization.
- Performance metrics add value to a safety program when a proper balance is maintained between lagging and leading indicators.
- Watching the right metrics not only directs a company’s focus, but also provides real-time perspective on the overall quality of a company’s safety culture.
Measuring performance is an essential function of safety management. When used correctly, safety metrics can provide great vision to a company’s safety program. Some metrics may indicate a need for improved employee training and development. Others may necessitate the creation of an emphasis program or standard operating procedure. A proper assessment of performance indicators can help OSH professionals identify negative trends or areas in the company with declining safety performance.
The variations of data that can be collected are seemingly endless. In any case, OSH professionals should seek to maintain the right balance between lagging and leading indicators. This means that equal consideration should be allocated to past experiences and current preventive activities. By doing so, management can ensure that efforts are properly distributed to the most value-adding aspects of the business.
A common metric used to measure safety performance is the experience modification rating (EMR). EMR is a workers’ compensation calculation insurance companies use to predict a company’s potential for future losses. EMR is ultimately calculated by dividing actual losses by expected losses. The rate produced is used to determine insurance premiums. For example, if the average rate in a given industry is 1.0, then a company with an EMR of 0.78 would be given a credit modification, which equates to a reduced insurance premium. In contrast, a company with an EMR greater than 1.0 would be given a debit modification resulting in an increased premium cost.
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