The following seven steps will help health and safety professionals adopt a system for measuring the performance of health and safety functions in the context of their value to an organization, and for communicating results to business and financial executives.
STEP 1: Identify the organization’s value drivers. “Value drivers” are the specific values that steer an organization’s overall business strategy and decision-making processes. For example, providing public safety services without interruption is a primary value driver for local governments.
STEP 2: Identify injury and illness costs. Once the values that drive your organization are identified, the next step is to conduct a form of financial “hazard analysis” or an inventory of health and safety-related losses or costs that devalue the organization. Injuries and illnesses are clearly losses to an organization. OSHA’s Safety and Health Management Systems eTool can help estimate the annual cost of accidents at the workplace.
STEP 3: Identify investments in health and safety activities. In this step, the goal is to view health and safety activities as investments instead of costs. An accident with injury is a cost. Accident prevention is an investment with benefits in cost control, compliance, risk and reputation.
STEP 4: Link health and safety functions to the value drivers. This step helps identify the links between specific health and safety functions and the core business values of the organization. The connections will vary depending on a particular organization’s health and safety activities and core business values.
STEP 5: Measure Business Value Performance. Once the connections between health and safety functions and the organization’s business values are made, the health and safety professional can choose the means to measure health and safety performance in the context of business values, and evaluate and enhance health and safety performance (e.g., streamline, innovate, improve processes) in such a context.
STEP 6: Communicate results with your employees. Explain what you are doing to control costs, comply with regulations, support business initiatives, and protect and enhance your jurisdiction’s reputation.
STEP 7: Follow up. Following up is like maintenance activities — vitally important to the health of the company, but often ignored. Follow up is the key to getting upper management to accept the business case for health and safety in the long term.
The benefits of an organization’s health and safety functions and performance are often undervalued due to communication barriers between health and safety professionals and executive management, and a lack of standard metrics for evaluating all aspects of health and safety performance. However, this situation is improving with the advent of health and safety business value metrics and well-organized strategies for using them.
Resources: GEMI. Clear Advantage: Building Shareholder Value. Washington, DC, February 2004; pp. 10, 26-32.