Safety KPIs can be divided into the lagging ones that help to quantify something that has already happened (incidents and injuries) and leading metrics that work proactively and help to prevent future safety events.
Most likely, you already have a long list of lagging metrics like:
- Reported Accidents/Incidents
- Lost Time Injury Frequency Rate
I suggest spending most of the time talking about preventive/leading KPIs for safety.
Leading Indicators for Safety
Looking at leading factors of safety, we can define several areas of interest.
Basic training in safety is a leading factor of a safer environment:
- % of Management Trained in Safety
- % of Employees Trained in Safety
There is a training scorecard that can be used to track safety training initiatives on four different levels.
Passing safety training doesn’t mean that the actual behaviour became safer; we need to look at:
- Number and type of unsafe behaviours reported
- Near miss incidents reported (we discussed near miss in detail in Quality scorecard)
High employees morale leads to fewer safety incidents. Look at:
- Average Overtime Hours Per Person
- Employee Satisfaction with Work Environment
- Employee Engagement
Safety issues need to be fixed fast:
- Average Time To Prepare Response Plan
- Average Time To Resolution of Reported Issue
There should always be a budget for safety.
- Safety Prevention Costs
Similar to the cost of low quality, we can use cost of low safety as a decision factor when finding budget for new safety initiatives:
- Cost of Low Safety
- Cost of High safety
Broken equipment doesn’t necessary mean a safety issue, but it could be a leading factor:
- Equipment Breakdowns
- % of Equipment where Preventive Maintenance Was Performed
Safety environment should be formally validated:
- Number of audits or inspections performed
Alcoa Example: Priority of Safety over Financial KPIs
What if someone were to tell you that to improve the overall performance of your company, you need to focus all your efforts on … worker’s safety? Your current safety indicators are in the green zone, and their values are even better than the ones all over the industry. What a surprise when a new CEO is talking to the investors and shareholders, not about ROI, investments, and financial efficiency, but about … safety.
Focus on Safety Metrics
That’s what Paul O’Neill did when he came to Alcoa in 1987 as chairman and CEO. Alcoa deals with molten aluminum, and their injury rate per 100 worker per year was 1.86 (quite good compared to the national rate in the U.S. that was 5 incidents per 100 workers). The new CEO established a goal – “achieve zero injuries level” at the organization where people handle molten metals.
Did the company achieve this goal? Today, Alcoa publishes their safety data in real time [1. Zero Is Possible, Alcoa Worldwide website.]. When I was writing this article, the rate was at 0.120. In other words, on average, workers at Alcoa take less risk in getting injured than employees of a software company or a legal office.
Alcoa´s Action Plan
How did this company do this?
- They became “obsessed” with safety!
Any safety incident was reported within 24 hours to the management. The reports contained an analysis of the situation and the prevention plan for the future. They were really serious about it, and one top manager was even fired for not reporting a safety incident. Safety was not just a part of the bureaucratic reports; it was in the focus.
- There was always a budget for improving safety – from installing new sensors and proactive maintenance to training people about safety; they even implemented an email system to … report about safety problems more efficiently.
Side Effect of Focus on Safety
There was a “side effect” of this focus. People started sharing other ideas, and some of them lead to some significant process improvements. And more importantly, the financial results of the company were improving as well.
To learn the full story, you can start with this article by Pulitzer Prize–winning business reporter Charles Duhigg. If you liked the story, I do recommend reading a book , where Charles Duhigg explores the nature of habits (or their business analog – routines) by giving some great examples of how to improve organizational performance.