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  • Writer's pictureLeverage Safety

The Balanced Scorecard Approach: A Holistic View of Safety Performance

Updated: Jul 19

When it comes to measuring safety performance, many organizations rely on traditional lagging indicators such as recordable rates, severity rates, and the cost of accidents. While these metrics are crucial for accountability, they may not provide the insights needed to drive continuous improvement. Just as businesses have realized the limitations of managing solely with financial data, safety professionals also need a more comprehensive approach to measure and enhance safety performance. In this article, we will explore the concept of the balanced scorecard and how it can be adapted to create a holistic view of safety.

The Limitations of Lagging Indicators

The use of lagging indicators in safety management parallels the approach taken in financial performance measurement. While lagging indicators are effective for evaluating past performance, they fall short in guiding future improvement strategies. These metrics were initially developed during the industrial revolution to measure capital utilization and return on investment, primarily for accountability purposes. However, they do not necessarily provide insights into the best strategies for safety improvement.

Exploring Alternative Metrics

To truly drive safety improvement, we need to consider a range of metrics beyond lagging indicators. Near-miss reporting, behavior-based safety (BBS) measurements, physical audits, and perception surveys can offer valuable perspectives. Near-miss reporting encourages employees to proactively address risks, while BBS focuses on identifying and modifying unsafe behaviors. Physical audits assess workplace conditions, and perception surveys gauge employees' thoughts and attitudes toward safety. While each metric provides valuable insights, none of them individually captures the complete picture of safety performance.

Adapting the Balanced Scorecard to Safety

The balanced scorecard methodology, originally developed for strategic management, offers a framework for integrating various metrics and perspectives. The approach was created to go beyond financial measures and provide a comprehensive management system. By adapting this methodology to safety, we can develop a balanced view of performance and identify areas for improvement.

The Four Perspectives of Safety Performance

  1. The Financial Perspective: Traditional financial measures, such as the cost of accidents, can provide insights into safety performance. This perspective should be balanced with other categories of information to gain a holistic understanding of safety outcomes.

  2. The Customer Perspective: Safety professionals should measure customer satisfaction by understanding how workers perceive safety efforts and how well they align with organizational goals. Regular perception surveys and customer classification can help gauge satisfaction levels.

  3. The Process Perspective: Safety processes, such as job safety analysis, risk assessments, audits, and compliance enforcement, need to be assessed for their effectiveness. Training metrics, including participant ratings, knowledge retention, transfer of learning, and return on investment, can also be included in this perspective.

  4. The Learning and Growth Perspective: This perspective measures the adaptability and learning capabilities of employees. It includes evaluating safety culture, employee attitudes, onboarding effectiveness, and behavioral observations focused on safety performance improvement.

Unlocking the Potential of the Balanced Scorecard

Adopting a balanced scorecard approach in safety management can provide a more comprehensive understanding of performance and drive improvement strategies. By analyzing the connection between leading indicators and lagging indicators, we can predict and measure the impact of interventions, align safety processes with organizational goals, and transform safety culture.

Traditional lagging indicators alone do not provide the full picture of safety performance and improvement opportunities. By incorporating multiple perspectives through the balanced scorecard methodology, safety professionals can gain valuable insights into the effectiveness of safety efforts. This comprehensive approach allows for better alignment with organizational strategies, identification of improvement targets, and continuous enhancement of safety processes. Let's embrace the balanced scorecard as a tool to truly understand and improve safety performance in our organizations.

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