Definition - What does Risk Management mean?
Risk management is a systematic approach to manage workplace hazards. It is a key component in any organizational management that identifies, evaluates and determines the means of reducing risks to an acceptable level to protect employees, visitors, third party contractors, casual laborers, people who remain physically present at workplace and the environment. Risk management also protects assets and considers how to avoid losses.
Safeopedia explains Risk Management
Risk means the likelihood of potential harms from a known and identified source of hazard. It is measured in terms of the chance of being exposed to those hazards. Organizational management has procedures to systematically identify and evaluate the hazards and to avoid encountering them. Organizations formally establish processes to identify hazards, assess the risks involved in all aspects, manage until the risks are eliminated, reduced or controlled up to a level being acceptable.
The risk management process has four stages:
- Identification - proactive identification, Incident reporting, safety inspections, risk audits, safe design and purchasing, consultation.
- Assessment - likelihood of the hazard and risk, degree of harm, frequency and duration of exposure, severity of the hazard or risk.
- Control of hazards and risks - good knowledge about hazard, risk, cost associated and available options determine which would be desirable. The process beginning with the most preferable to the least preferable includes:
- Elimination through design
- Substitution by replacing materials, equipment or processes
- Engineering by controls, mechanical aids, barriers, ventilation or insulation
- Administrative control through job rotation, changing work tasks, procedures and training
- Personal protective equipment (PPE) to reduce potential exposure.
- Monitoring and controls - hazards may change and that risk control measures need to be reviewed continuously to determine their effectiveness.