Organizations employ key performance indicators (KPIs) to measure their progress in reaching company-specific health and safety goals. These KPIs allow safety professionals and company leaders to collect data and communicate trends, which can then be used to identify where further improvements are needed.
This article will serve as a primer on key performance indicators for occupational health and safety and provide advice on which ones you should choose for your organization.
What Are Key Performance Indicators?
A key performance indicator is a metric that is tied to a predetermined target and represents how far it exceeds or falls below that target. KPIs provide the company with objective data about their health and safety situation, ensuring adequate feedback on the effectiveness of safety initiatives and policies.
What Are the Characteristics of a Good KPI?
A good KPI should be:
- Specific – It must be clear what exactly the KPI measures
- Measurable – The KPI has to be measurable according to a defined standard so that the actual value can be compared to normal standard values
- Achievable – Every KPI has to target a realistic and feasible goal (nothing is more discouraging than striving for an outcome that will never be obtained)
- Relevant – The KPI must give insight into the organization's safety performance
- Time phased – A KPI only has a meaning if we know the time dimension in which it realized
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Key Performance Indicators for EHS
The field of EHS deals with a large number of risks that need to be effectively and efficiently managed. If they are going to be a useful tool for EHS management, key performance indicators should provided quantitative (or semi-quantitative) data that reflects the safety and health issues and activities in the organization—such as information on existing and emerging risks, exposures, and hazards. The data should also inform safety leaders about the success or failures of preventative actions aimed at mitigating and controlling workplace hazards.
The two main types of key performance indicators use most frequently are lagging and leading indicators.
1. Lagging Indicators
- Work-related injuries that qualify as lost time injuries (LTIs) (see Calculating Your Company's Lost Time Injury Frequency Rate to learn more)
- Lost production days due to sick leave
- Incidents or near misses (find out What is the difference between a near miss and an incident)
- Complaints about work that is carried out in unsafe or unhealthy conditions (learn How to Refuse Unsafe Work)
- Early retirements
While those common lagging indicators focus on what went wrong with company's safety performance, many safety professionals and company leaders prefer to obtain positive feedback and instead opt to focus on what went well. Example of positive lagging indicators include:
- Percentage of productive planned work days realized
- Number of hours worked (by the total work force) without LTIs
- Number of working days since the last accident
- Employee satisfaction
2. Leading Indicators
Leading indicators are measures of conditions and activities geared to the prevention of accidents. Leading indicators, therefore, have predictive value and can be used to improve safety management systems. And, moreover, they tend to measure the factors that are considered key elements of well-performing management systems.
Important EHS leading indicators include:
- Percentage of managers with adequate EHS training
- Percentage of workers with adequate EHS training
- Number of workplace inspections
- Frequency of (observed) (un)safe behavior
- Number of EHS audits performed
- Percentage of EHS suggestions or complaints for which feedback was provided in a timely manner (for advice on handling feedback, see Implementing a Safety Culture: Speak Up for Safety)
- Prevalence of certain health problems (e.g. as outcomes of health surveillance)
Selecting the Best Key Performance Indicator(s) for Your Organization
Before selecting KPIs to be evaluated, safety professionals and company leaders must first understand the safety risks of their operations, evaluate the systems that are in place to manage these risks, and grasp the organization’s business goals, strategies, and culture.
According to Jan Baldauf, a senior project manager at Environment Resources Management in Ewing, New Jersey, the KPIs that are best suited for a particular organization depends on several factors, such as:
- Where is the organization today with respect to health and safety performance?
- Where does the organization want to be tomorrow?
- Who receives the KPI data and what do they do with it?
- How are KPIs and the conclusions that are drawn from the KPIs communicated to others?
Limitations of Key Performance Indicators
While key performance indicators can provide organizations with objective and valuable information, it may be beneficial to keep in mind a few factors that limit the usefulness of KPIs:
- Underreporting, which is especially frequent where there is a lack of a positive EHS culture
- Positive events are usually not measured and recorded
- An outcome measure (e.g. an incident) does not reflect the causes of that event
- A focus on KPIs may lead managers to neglect important issues that are not measured
The Bottom Line
By providing valuable feedback and helping to motivate company leaders, KPIs are important for keeping an organization's EHS management system in ship shape. Combining lagging and leading indicators is an especially good way of getting an adequate picture of workplace safety, both its current state (lagging indicators) and the measures in place to improve it (leading indicators).
As the saying goes, "What gets measured gets managed." Keeping tabs on KPIs ensures a proactive approach to workplace health and safety.